ACC 222 ASSIGNMENT Submission Date: Friday, 13th September, 2024 Time: 12:00Noon
1. Budget Actual
Production 11,000 units Production 10,000 units
Sales 11,000 units Sales 10,000 units
N N N N
Sales 330,000 Sales 320,000
Less Standard Marginal cost Less Actual Marginal Cost
Materials 88,000 Materials 55,000
Labour 121,000 Labour 160,000
Variable overheads 33,000 242,000 Variable overheads 50,000 265,000
Contribution 88,000 Contribution 55,000
Less Fixed costs 25,000 Less Fixed Costs 25,000
Profit 63.000 Profit 30.000
The standards cost card shows the following information in respect of the product:
N
Material 4 kg @ N2 kg 8
Labour 2 hours @ N5.50 11
Variable overheads 3 hours @ N1 3
Standard marginal cost 8
Standard Contribution 30
Standard selling price
During the period, 45,000kg of materials were used and 22,000 labour hours were worked.
Calculate all relevant variances and show a reconciliation statement between budgeted and actual profit.
2. Use the information given below to prepare Income Statements for the months of January and February 2016 using: Marginal
and Absorption Costing
Per Unit N
Sales price 200
Direct material 50
Direct wages 14
Variable production overhead 10
Per month: N
Fixed production overhead 297,000
Fixed selling expenses 42,000
Fixed administration expenses 78,000
Variable selling expenses 10% of sales value.
Normal capacity was 33,000 units per month ________
January February
Sales (units) 30,000 36,000
Production (units) 36,000 30,000
3. The opening cash balance of ESIMEDO LIMITED on the 1 st January was expected to be N30,000, the sales budgeted were as
follows:
N
160,000
180,000
150,000
150,000
November December January February March 160,000
Analysis of records shows that debtors settle according to the following pattern: 60% within the month of sale 25% the month
following 15% the month following
Extracts from the purchase budget were as follows:
120,000
110,000
December 90,000
January February March 110,000
All purchases are on credit and past experience shows that 90% are settled in the month following purchase and the balance
settled the month after.
Wages are N30,000 per month and overheads of N40,000 per month (including N10,000 depreciation) are settled monthly.
Taxation of N16,000 has to be settled in February and the company will receive settlement of an insurance claim of N50,000 in
March.
1
You are required to prepare a cash budget for January, February and March.
4. FAMTES NIGERIA LIMITED is operating a system of Flexible Budgetary Control. Her Budget for the year is as follows:
Levels of Activity
70% 80% 90%
N N N
Direct material 17,780 20,320 22,860
Direct labour 44,800 51,200 57,600
Production overhead 30,500 32,000 33,500
Selling & Distribution overhead 3,600 3,800 4,000
Administration overhead 17,000 17,000 17,000
Other Fixed overhead 5,000 5,000 5,000
Total cost 118,680 129,320 139,960
You are required to present the above to the management, separating the semi variable overhead to variable and fixed and also
include the cost of “attaining 60%, 85% and 120% level of activity “ . Fixed costs remain unchanged.
5. The following trial balance was extracted from the books of ILE TO LO Nigeria Ltd as of 1st January, 2010.
Dr Cr
Raw Materials 180,000
Work- in Progress (W.I.P) 270,000
Finished Goods stock 90,000
General Ledger Control Account 540,000
540,000 540,000
The company operates a job order basis for its cost accounts. During the month of January, 2010, the following were extracted
from the factory journal which is segregated from the financial accounting records. These are:
(i) Raw materials purchased on credit #80,000
(ii) Materials requisitioned amounted to #134,000 of which #12,000 were indirect materials.
(iii) Wages amounted to #320,000 of which #280,000 was direct.
(iv) Depreciation came to #18,000
(v) Overheads paid were #2,000 for rent, #8,000 for light and air conditioner rental was #5,750
(vi) Factory overhead are applied at the rate of 60% of labour.
(vii) Closing stocks were Raw Material #62,000, W.I.P #78,000 and Finished Goods #87,500
(viii) Sales on account amounted to #948,600.
You are required to prepare ledger accounts that are necessary to record the transactions of the month and to extract the trial
balance at the end of January, 2010.
6. You are given the following data from the costing records of TANKO Nigeria Limited:
N N
Sales 400,000
Variable Costs 200,000
Fixed Costs 150,000
350,000
Profit 50,000
Number of units sold during the period under review is 2,000.
You are required to:
a. Calculate
i. Contribution per unit
ii. Break-even Point in units
iii. Break-even Point in sales value
iv. C/S Ratio
v. Number of units to be sold to achieve a profit of N75,000
vi. Level of sales that will achieve the target profit of N75,000
b. Mention any FOUR assumptions of Break-even analysis.
