Question
a) List the four areas in which standards of ethical conduct exist for management accountants in Australia. For each standard, give an example that demonstrates compliance with that standard.
b) Classify each cost item of Ripon Printers into one of the following business functions of the value chain: (1) R&D, (2) design, (3) production, (4) marketing, (5) distribution or (6) customer service
Cost Items:
a. cost of customer order forms
b. cost of paper used to manufacture of books
c. cost of paper used in packing cartons to ship books
d. cost of paper used in display at national trade show
e. depreciation of trucks used to transport books to college bookstores
f. cost of the wood used to manufacture paper
c) Isabelle Pty Ltd uses a budgeted factory overhead rate to apply overhead to production. The following data are available for the year 2010.
Budgeted Actual
Factory overhead $675,000 $716,000
Direct labour costs $450,000 $432,000
Direct labour-hours 12,500 DLHs 13,325 DLHs
Required:
a. Determine the budgeted factory overhead allocation rate based on direct labour-hours.
b. Compute the amount of under-or-overallocated overheads.
c. Describe the alternative ways to dispose of under-or-overallocated overheads costs.