Without investment
With investment
ROI
ROI = (Profit/Capital employed)*100%
= (119,700/570,000)*100% = 21%
ROI = [(119,700+8,500)/(570,000+50,000)]*100%
= 20.7%
RI
RI = Profit - (Capital employed*cost of capital)
= 119,700 - (570,000*15%) = £34,200
RI = (119,700+8,500) - [(570,000+50,000)*15%]
= £35,200
high : 9,800 units --> £44,400
low : 7,700 units --> £38,100
variable cost per unit (v) = (44,400-38,100)/(9,800-7,700) = £ 3 / unit
fixed cost (FC) = 44,400 - 9,800*3 = £ 15,000
suy ra: Cost of factory power = 15,000 + 3*10,200 = £ 45,600
1
80% level 90% level
48,000 54,000
Variable direct labour 360,000 405,000
Other variable costs
Indirect labour 36,000 40,500
Consumable supplies 18,000 20,250
Canteen etc 23,760 26,730
Total variable costs 437,760 492,480
Semi-variable costs 17,600 18,800
Fixed costs
Depreciation 18,000 18,000
Maintenance 10,000 10,000
Insurance 4,000 4,000
Rates 15,000 15,000
Management salaries 25,000 25,000
Budgeted cost 527,360 583,280
2
Variable costs = 519,840
Semi-variable costs = 19,400
Fixed costs = 72,000
Total budget cost
611,240
allowance for 20X6
100% level
60,000 (hours)
450,000
45,000
22,500
29,700
547,200 variable cost per hour = 9.12 / hour
20,000 variable cost per unit = 0.2 Fixed cost = 8,000 (high-low method)
18,000
10,000
4,000
15,000
25,000
639,200
(1) Budget direct material cost per unit of 4,000 units = Budget direct material cost per unit of 5,500 units
suy ra: Direct material is variable cost => Direct material cost per unit = £ 4
Budget cost allowances for 5,100 units = 5,100*4 = £ 20,400
(2) Budget direct labour cost per unit of 4,000 units # Budget direct labour cost per unit of 5,500 units
suy ra: Direct labour is semi-variable cost => using high-low method
variable cost per unit = £ 3 per unit
fixed cost per unit = £ 8,000
Budget cost allowances for 5,100 units = 8,000+3*5,100 = £ 23,300
(3) Budget variable production overhead cost per unit of 4,000 units = Budget variable production overhead cost per u
suy ra: Variable production overhead is variable cost => Variable production cost per unit =
Budget cost allowances for 5,100 units = 5,100*2 = £ 10,200
(4) Fixed budget cost allowances = £ 11,000
(5) Selling and distribution overhead cost per unit of 4,000 units # Selling and distribution overhead cost per unit of 5
suy ra: Selling and distribution overhead is semi-variable cost => using high-low method
variable cost per unit = £ 1 per unit
fixed cost per unit = £ 4,000
Budget cost allowances for 5,100 units = 4,000+1*5,100 = £ 9,100
(6) Administration budget cost allowances = £ 7,000
(7) (a) The total expenditure variance for period 6 = Budget cost allowance for 5,500 units - Actual expenditure for 5,
= 85,000 - 82,400 = £ 2,600 (F)
(b) The volume variance for period 6 = Budget cost allowance for actual volume of 5,500 units - Budget cost allow
= 85,000 - 70,000 = £ 15,000 (A)
nit of 5,500 units
per unit
of 5,500 units
roduction overhead cost per unit of 5,500 units
£ 2 per unit
n overhead cost per unit of 5,500 units
ts - Actual expenditure for 5,500 units
500 units - Budget cost allowance for original budget of 4,000 units
New ROI = (45,000/180,000)*100% = 25% => NO (New ROI > cost of capital so can be accept
Incremental RI = 45,000 - (180,000*20%£ 9,000 => YES
capital so can be acceptable to company, but < current divisional ROI so manager will not motivate)
RI = Profit before imputed interest - (imputed interest*invested capital)
750,000 = 1,850,000 - (11% * invested capital) => Invested capital = £ 10,000,000
ROI = (Profit/Invested capital)*100% = (1,850,000/10,000,000)*100% =
18.5%
Phân tích từng đáp án
A. Investment Q only = [(480,000+350,000)/(2,400,000+1,400,000)]*100% = 21.8%
B. Investment R only = [(480,000+200,000)/(2,400,000+600,000)]*100% = 22.7%
C. Investment Q and R = [(480,000+350,000+200,000)/(2,400,000+1,400,000+600,000)]*100% =
D. Investment Q,R and S = [(480,000+350,000+200,000+88,000)/(2,400,000+1,400,000+600,000+400,000)]*100%
=> Maximise the division's return on investment is C. Investment Q and R
23.4%
600,000+400,000)]*100% = 23.3%
ROI before sale = (Profit before sale/Carrying amount before sale)*100%
15% = (Profit before sale/1.2m)*100% => Profit before sale =
Loss on sale of asset = 105,000 - 80,000 = £ 25,000
=> Profit after sale of asset = 180,000 - 25,000 = £ 155,000
Carrying amount after sale of asset = 1,200,000 - 105,000 + 80,000 = £ 1,175,000
ROI after sale of asset = (155,000/1,175,000)*100% = 13.2% ==> A
£ 180,000
Direct material cost per unit of 80% = Direct material cost per unit of 90%
suy ra: Direct material is variable cost => Direct material cost per 1% = £ 40 per %
Budget cost allowances for 88% = 40*88 = £ 3,520
Direct labour cost per unit of 80% # Direct labour cost per unit of 90%
suy ra: Direct labour is semi-variable cost => using high-low method
variable cost per unit = £ 10 per unit
fixed cost per unit = £ 2,000
Budget cost allowances for 88% = 2,000 + 10*88= £ 2,880
Production overhead cost per unit of 80% # Production overhead cost per unit of 90%
suy ra: Production overhead is semi-variable cost => using high-low method
variable cost per unit = £ 40 per unit
fixed cost per unit = £ 2,200
Budget cost allowances for 88% = 2,200 + 40*88= £ 5,720
=> Total cost in a budget for 88% = £ 12,120
