For this assessment task you are required to review five case studies and complete the tasks outlined.
The assessor will advise you of the due date of this submission.
Write in the due date below as advised by your assessor:
Students must complete all of the activities listed and will be assessed against the assessment criteria included in the checklist included with this task.
Case study 1
Mehil owns a taxi business in Newcastle. He recently expanded his business by including limousines.
Mehil’s accountant has provided the following information on monthly revenues and costs:
Mehil has heard about Activity Based Costing and wants to know what benefits it could provide, so he has obtained the following monthly information on expenses for NSW:
Mehil has identified that the main activity cost areas include salaries, vehicle costs and booking fees.
|Call centre booking fees||$45,500|
Complete the following activities:
You may wish to use the following table in your answer
|Cost pool||Driver||Driver unit||Driver rate|
Show all workings in your answer and ensure you have reconciled data to ensure accuracy of calculations.
Case study 2
OZ TOYS manufacturing has the following standard cost sheet or information for the production of children Toys.
|Direct material||2 ft @ 45.00||$10|
|Direct labour||0.5ft@ $10||5|
|Fixed overhead||0.5hrs @ $2.00*||1|
|Variable overhead||0.5hr @ 4.00||2|
|Standard unit cost||$18|
Note: * means rate is based on expected activity level of 2500 hour
During the year the following actual results were recorded
|Direct material(11750ft purchased and used)||$61100|
|Direct labour (2900hrs)||29500|
Work out the following variances:
Formula: Actual quantity x Actual price less Actual quantity x standard price
Formula: Actual quantity x Standard price less standard quantity x standard price
Formula: Actual hours x Actual rate less Actual hours x standard rate
Formula: Actual hours x Standard rate less standard hours x standard rate
Variable Overhead variances
Formula: Actual variable overhead rate x actual hours less standard variable overhead rate x actual hours
Formula: Standard variable overhead rate x actual hours less standard variable overhead rate x standardhours
Case study 3
Ethereal Enterprises manufactures microchips for computers. A market survey shows that a 10% reduction in price will result in a 30% increase in sales, with variable costs per unit remaining unchanged. On the other hand, an investment of $30,000 in machinery would reduce variable costs by $3 a unit.
Calculate your response to this question in a separate Worksheet in an Excel Workbook.
Case study 4
Mixed Meats Industries is a fine food company producing burgers and sausages.
It has 300 staff who work 8 hours a day, 5 days a week for 50 weeks per year.
The demand for burgers and sausages does not exceed 50,000 and 150,000 kilos respectively per year.
Currently, Mixed Meats receives $10 for one kilo of burgers, and $15 for one kilo of sausages.
Fixed factory overheads are applied on the basis of direct labour hours @$1 per hour.
Mixed Meats Industries is interested in maximising its profit and wants to know what the most profitable mix of sausages and hamburgers.
In order to determine the most profitable product manufacturing mix, you will need more information than what is included in the case study above.
You will gather that information by consulting with the company’s bookkeeper.
Before going to this meeting, make sure that you know which information you need from the bookkeeper.
During the meeting, demonstrate effective communication skills including:
Show your calculations.
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