Provide management accounting information

Pender Bearings PTY LTD Question Based on a single cost driver of 20,000 direct labour hours, Pender Bearings Pty Ltd has analysed its factory overhead costs for the following year as:   Fixed Variable Total lndirect materials 44,000 40,000 84,000 lndirect labour 46,000 40,000 86,000 Fueloil 18,000 20,000 38,000 Repairs and maintenance 10,000 15,000 25,000 Other factory overhead 22,000 5,000 27,000 Total 140,000 120,000 260,000 Required: lf Pender Bearings had estimated an activity level of 22,000 direct labour hours, estimate what the amount of the total variable,total fixed and total factory over head would have been. Pender Bearings estimates are …

Report on Sales Variance

Write a report on the Sales Variance Analysis with revenue analysis , recommendation and conclusion. SAMPLE PAPER : Introduction There are many procedures of doing variance analysis. These methods range from simple and straightforward to the very sophisticated and complex methods.  Variances are divided & sub divided into various categories by the techniques of cost accounting methods. However, a single variance can be also analysed as a group of various other variances with the help of the cost & quality factors associated with them. These variances can be both favorable & unfavorable. The variances are favorable when it results in …

Accounts Assignment II Semester

Multiple Choice Questions (11 to 14) Question 11 On 1 June 2010 Dan Traders, invested R100 000 at the O K Bank at an interest rate of 13% per annum. No interim interest payments were made by the O K Bank regarding this investment up to 31 December 2010, the end of Dan Trader’s financial year. Which one of the following journal entries correctly reflects the adjustment that must be made at 31 December 2010 in the books of Dan Traders in respect of the above? Sno R R 1. 2. 3. 4. Accrued income Interest receivedNarration Interest receivedAccrued incomeNarration …

Accounts Vosrau (Pty) Ltd

Multiple Choice Questions (15 to 16) Question 15 You are the auditor of Vosrau (Pty) Ltd. On comparing the cash book (cash receipts and cash payments journals) with the bank statement at 31 March 2010, you ascertained the following: 1.. Items in the cash receipts and cash payments journals ofMarch 2010 that could not be ticked off on the bank statements:1.1  A deposit on 31 March 2010 3251.2  Cheque number 2001 issued on 28 March 2010 R 325450 2. Items on the bank statement that could not be ticked off in the cash book (cash receipts and cash payments journals) …

Capital Budgeting and Leasing

Qantas is considering the purchase of either a new Boeing B747-400ER or an Airbus A340-600E for use on the Perth-London-Perth route.  The cost of a 747-400ER is $US256m and the cost of an A340-600 is €198m.  Exchange rates are $US1.00 = AUD1.15 and €1.00 = AUD1.45. Both aircraft have an effective life of 25 years.  Qantas uses the straight line method of depreciation and usually disposes of its aircraft at the end of 10 years.  The sale price for Qantas aircraft after 10 years averages 62% of the cost price and it usually takes Qantas a year to sell an …

Truck Leasing Company

Question 2 Truck Leasing Company (TLC) buys trucks for leasing to various delivery companies. On October 1, 2010, TLC leases a truck to Showman Delivery Company. The cost of the truck to TLC was $196,110, which approximated its fair value on the lease date. The lease payments stipulated in the lease are $33,000 per year in advance for the 10-year period of the lease. The payments include executory costs of $3,000 per year. The expected economic life of the equipment is also 10 years. The title to the equipment remains in the hands of TLC at the end of the …

Lease problems

Question 1 Aquarius Incorporated (AI) uses leases as a method of selling its products. In early 2011, AI completed construction of a passenger ferry for use between Manhattan and Staten Island. On April 1, 2011, the ferry was leased to the Manhattan Ferry Line on a contract specifying that ownership of the ferry will transfer to the lessee at the end of the lease period. Annual lease payments do not include executory costs. Other terms of the agreement are as follows: Original Cost of the ferry                               $1,500,000 Fair Value of ferry at the lease date                $2,107,102 Lease Payments (paid in …

Direct and Indirect costs

Q1: The distinction between indirect and direct costs depends on: a. whether a cost differs between alternatives. b. whether a cost is variable or fixed. c. whether a cost is a product or a period cost. d. whether a cost can be easily traced to the cost object under consideration. Q2. Which of the following would usually be found on a job cost sheet under a normal cost system? a) Item A b) Item B c) Item C d) Item D Q3: What source document is used to determine the actual amount of direct materials to record on a job …

Lease problems

Question 3 Jacks Mining and Manufacturing Company (JMMC) leases from Emily Leasing Company three machines under the following operating lease terms: Machine 1: Lease period – 10 years, beginning April 1, 2005; lease peyments-$18,000 per year, payable in advance. Machine 2: Lease period – 10 years, beginning July 1, 2009, lease payments-$30,000 per year, payable in advance. Machine 3: Lease period – 15 years, beginning January 1, 2010, lease payments-$12,500 per year, payable in advance. Required: Prepare the note to the 2011 financial statements that would be required to disclose the lease commitments of JMMC. JMMC’s accounting period is a …

Clerical costs in billing

Q11: Clerical costs in the billing department of Craig Company are a mixture of variable and fixed components. Records indicate that average unit processing costs are $0.50 per account processed at an activity level of 32,000 accounts. When only 22,000 accounts are processed, the total cost of processing is $12,500. Assuming that this activity is within the relevant range, at a budgeted level of 25,000 accounts: A) processing costs are expected to total $8,750. B )fixed processing costs are expected to be $10,400. C) the variable processing costs are expected to be $0.35 per account processed. Q12:The following production and …