Re: Management Accounting HELP!

Dear all, I am struggeling to find a good answer to the following question, I hope you can help me to give a sufficient answer, as it might come up in the exam this Friday:

Q1

a) Explain the fundamentals of cost volume profit analysis focusing
especially on the validity of the assumptions on which this tool is
based.

b) Discuss in detail the advantages and disadvantages of the traditional
absorption costing method.

thank you in advance!

Original post by A.A.T.

A little light reading for part a) http://highered.mcgraw-hill.com/sites/dl/free/0073527114/781445/chapter_3.pdf

Hi, im not sure if ur still on the TSR, but im a current accounting student looking for help to answer this question.

Really need help with this Question. I have been trying to solve it, but i just cant get my head around it, is it possible to help me. Thanks, Mustafi. Thank you for all the videos too.

Question:
Operating Statement

£ £ £
Budgeted profit 8,000
Sales volume variance 880 (A)
7,120
Selling price variance 3,560 (F)
10,680
Cost variances
A F
Direct labour – rate 1,086
efficiency 240
Fuel Price 420
Usage 1,280
Variable overhead expenditure 280
efficiency 180
Fixed overhead expenditure 400
Volume 1,760
3,880 1,766 2,114(A)
Actual profit 8,566

The company uses delivery miles as its cost nit, and the following details have been taken from the budget working papers for April 2022.

Expected activity
Charge to customers 200,000 delivery miles
Expected variable cost per delivery mile £0.30 per delivery mile
Direct labour (0.02 hours) £0.08
Fuel (0.1 litres) £0.04
Variable overhead (0.02 hours) £0.06

The following additional information has been determined from the actual accounting records for April 2022.
• Fixed overhead cost
• Fuel price
• Direct labour hours
Required:
a) Calculate for April 2022
i. The actual number of delivery miles
ii. Actual direct labour rate per hour
iii. The actual number of litres of fuel consumed
iv. The actual variable overhead expenditure

Reply 1

Monoro

MA involves alot of computations which might not be easy to write down in the reply section.
But I hope you got the help you needed since I can see you posted a month ago. If not, maybe you could side chat for a detailed explanation

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