Description
showing the workings of Waltham Motors, case in Management Accounting course.
Q.1 Sales Direct Material Direct Labour Indirect Labour Idle Time Clean Up time Misc Supplies Shipping Total Variable Cost Units Variable cost per unit Selling price per unit Contribution Fixed Cost Breakeven Units P/V Ratio
Budget 864000 108000 288000 57600 14400 10800 5200 28800 512800 18000 28.48888889 48 19.51111111 260000 13325.74032 0.406481481
Q.2
Total Cost (Budget) Units Cost per unit Total Cost (Actual) Units Cost per unit
772800 18000 42.93333333 693200 14000 49.51428571
Q.4 Sales Direct Material Direct Labour Indirect Labour Idle Time Clean Up time Misc Supplies Shipping
Budget (Old Price* Old Volume) 864000 108000 288000 57600 14400 10800 5200 28800
Percentage decrease in sales = 22.22% Profit Increase: Increase in SP Decrease in Material Cost Indirect Labour Misc Supplies Total Increase 91200 14000 4494.736842 401.28 44.56 18940.57684
Decrease: Decrease in Sales Volume Material Wastage Increase in labour charges Labour Wastage Idle Time Clean up time Shipping Fixed Cost Total Decrease Final Profit/loss
78044.44444 5892.336842 6000 15993.6 2999.68 1599.76 5599.36 1200 117329.1813 -7188.604444
Q.3
Observations 1. There has been improvement in usage of only indirect labour and miscellaneous supplies 2. For the rest of items the costs are low as compared to budgeted because the sales volume has decre 3. When the lower value of sales volume is taken into account, the costs have increased as compared to
Variable costs according to decreased sales
New Price * New Old Price * New Volume Volume 672000 686000 84002.4 89894.73684 85400 224006.4 240000 246000 44801.28 44400 11200.32 14200 8400.24 10000 4044.56 4000 22400.64 28000
(ideally should have been 7200)
ndirect labour and miscellaneous supplies ared to budgeted because the sales volume has decreased nto account, the costs have increased as compared to budgeted
Sales Direct Material Direct Labour Indirect Labour Idle Time Clean Up time Misc Supplies Shipping
OP*OV OP*NV NP*NV 864000 672000 686000 108000 89894 85400 288000 240000 246000 57600 44400 14400 14200 10800 10000 5200 4000 28800 28000
Profit Increase: Increase in SP Decrease in Material Cost Total Increase Decrease: Decrease in Sales Volume Material Wastage Increase in labour charges Labour Wastage Indirect Labour Idle Time Clean up time Misc Supplies Shipping Fixed Cost Total Decrease Final Profit/loss
91200 14000 4494 18494
77952 5978 6000 16224 355.2 3011.2 1608.4 40.4 5599.36 1200 117968.6 -8274.56
doc_865930880.xls
showing the workings of Waltham Motors, case in Management Accounting course.
Q.1 Sales Direct Material Direct Labour Indirect Labour Idle Time Clean Up time Misc Supplies Shipping Total Variable Cost Units Variable cost per unit Selling price per unit Contribution Fixed Cost Breakeven Units P/V Ratio
Budget 864000 108000 288000 57600 14400 10800 5200 28800 512800 18000 28.48888889 48 19.51111111 260000 13325.74032 0.406481481
Q.2
Total Cost (Budget) Units Cost per unit Total Cost (Actual) Units Cost per unit
772800 18000 42.93333333 693200 14000 49.51428571
Q.4 Sales Direct Material Direct Labour Indirect Labour Idle Time Clean Up time Misc Supplies Shipping
Budget (Old Price* Old Volume) 864000 108000 288000 57600 14400 10800 5200 28800
Percentage decrease in sales = 22.22% Profit Increase: Increase in SP Decrease in Material Cost Indirect Labour Misc Supplies Total Increase 91200 14000 4494.736842 401.28 44.56 18940.57684
Decrease: Decrease in Sales Volume Material Wastage Increase in labour charges Labour Wastage Idle Time Clean up time Shipping Fixed Cost Total Decrease Final Profit/loss
78044.44444 5892.336842 6000 15993.6 2999.68 1599.76 5599.36 1200 117329.1813 -7188.604444
Q.3
Observations 1. There has been improvement in usage of only indirect labour and miscellaneous supplies 2. For the rest of items the costs are low as compared to budgeted because the sales volume has decre 3. When the lower value of sales volume is taken into account, the costs have increased as compared to
Variable costs according to decreased sales
New Price * New Old Price * New Volume Volume 672000 686000 84002.4 89894.73684 85400 224006.4 240000 246000 44801.28 44400 11200.32 14200 8400.24 10000 4044.56 4000 22400.64 28000
(ideally should have been 7200)
ndirect labour and miscellaneous supplies ared to budgeted because the sales volume has decreased nto account, the costs have increased as compared to budgeted
Sales Direct Material Direct Labour Indirect Labour Idle Time Clean Up time Misc Supplies Shipping
OP*OV OP*NV NP*NV 864000 672000 686000 108000 89894 85400 288000 240000 246000 57600 44400 14400 14200 10800 10000 5200 4000 28800 28000
Profit Increase: Increase in SP Decrease in Material Cost Total Increase Decrease: Decrease in Sales Volume Material Wastage Increase in labour charges Labour Wastage Indirect Labour Idle Time Clean up time Misc Supplies Shipping Fixed Cost Total Decrease Final Profit/loss
91200 14000 4494 18494
77952 5978 6000 16224 355.2 3011.2 1608.4 40.4 5599.36 1200 117968.6 -8274.56
doc_865930880.xls