Question 1
Jumbo Giant Limited manufactures three products, namely, Milk, Yoghurt and Ice-cream.
The initial joint cost of production is $600,000 for the year. This cost results in an output of 2,000,000 litres. Details relating to the 3 joint products are given below:
Required:
1. Allocate the joint cost between Milk, Yoghurt and Ice Cream using
a) The Physical Method.
b) The Relative Sales Value Method. Round percentage to 2 decimal places.
c) Net Realisable Value Method. Round percentage to 2 decimal places.
2. Jumbo Giant Limited has a request from a prospective customer to further process all its Ice Cream production into Gourmet Ice Cream which will then be bought by the customer for $12.00 per litre. This will increase the separable costs of ice cream per litre to $2.60. Would you advise the company to accept the offer? Why or why not?
Question 2
Mighty Mouse Limited estimates the following information for October 2014:
Sales (Units) 22,000
Inventory - 1st
October 2014 9,000
Inventory - 31st October 2014 7,500
The company's inventory policy requires ending inventory to be equal to 25% of the prior month's sales.
The company predicts sales to increase by 5% in November. December is a slow month and sales are estimated at 70% of November sales.
The cost price per unit is $5.00 and this expected to increase by 10% in December.
Required: Prepare a purchases budget in units and dollars for the quarter ending 30th December 2014.
Question 3
Fussy Hair Ltd has decided to prepare a cash budget for the quarter ending 30st September 2014 and provides you with the following data:
Services are provided on 30 day credit terms. As at 1 July 2014, the Cash at bank ledger account had a debit balance of $500,000.
The following estimates have been made for the next three months:
All sales are on credit.
It is expected that debtors will pay their accounts as follows:
o 50 per cent in the month following the sale.
o 20 per cent in the second month following the sale.
o 30 per cent in the third month following the sale.
Actual sales for the previous three months were as follows:
o $300,000 in April 2014
o $290,500 in May 2014
o $320,000 in June 2014
Electricity expenses and insurance expenses are paid the following month after they are incurred. June expenses were as follows:
o Electricity expenses $8,000
o Insurance expenses $35,000
Required:
Part A:
Using the following template, prepare a schedule of cash receipts from debtors for the period ending 30th September 2014.
Part B:
Using the following template, prepare a Cash budget for the Quarter ending 30th September 2014.
Question 4
Terrific Tables Pty Ltd incurred the following costs to produce job number TB300, which consisted of 500 office desks.
Direct material:
1 June Requisition no. 520: 900 metres of timber @ 8.00 per metre
18 June Requisition no. 101: 600 metres of steel @ $0.20 per metre
Direct labour:
18 June Timesheet no. 72 500 hours@$14 per hour
Manufacturing overhead:
Applied on the basis of direct labour hours @$12 per hour.
Additional information:
Job TB300 was completed on 18 June.
Required:
Prepare a job cost sheet and record the information given above and also a cost summary for job TB300.
Attachment:- Assignment.rar