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    Fina Test

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    mohammad Wildan khabibi
    Thomson should accept the special order as it will increase profits by $68,000 initially, but by only $26,000 if additional capacity is required. Agro Engine needs to sell 1,200 units to break even and 2,000 units to meet its income target. Reducing fixed costs by 20% and price by 10% while selling 1,700 units will be the most profitable option. NCIS's quality costs decreased from 20% to 15.45% of sales from 2017 to 2018, so additional profits of $1,295,000 could be gained by further reducing costs to 2.5% of sales.

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    Fina Test

    Uploaded by

    mohammad Wildan khabibi
    22 views5 pages
    Thomson should accept the special order as it will increase profits by $68,000 initially, but by only $26,000 if additional capacity is required. Agro Engine needs to sell 1,200 units to break even and 2,000 units to meet its income target. Reducing fixed costs by 20% and price by 10% while selling 1,700 units will be the most profitable option. NCIS's quality costs decreased from 20% to 15.45% of sales from 2017 to 2018, so additional profits of $1,295,000 could be gained by further reducing costs to 2.5% of sales.

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    Thomson should accept the special order as it will increase profits by $68,000 initially, but by only $26,000 if additional capacity is required. Agro Engine needs to sell 1,200 units to break even and 2,000 units to meet its income target. Reducing fixed costs by 20% and price by 10% while selling 1,700 units will be the most profitable option. NCIS's quality costs decreased from 20% to 15.45% of sales from 2017 to 2018, so additional profits of $1,295,000 could be gained by further reducing costs to 2.5% of sales.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    22 views5 pages

    Fina Test

    Uploaded by

    mohammad Wildan khabibi
    Thomson should accept the special order as it will increase profits by $68,000 initially, but by only $26,000 if additional capacity is required. Agro Engine needs to sell 1,200 units to break even and 2,000 units to meet its income target. Reducing fixed costs by 20% and price by 10% while selling 1,700 units will be the most profitable option. NCIS's quality costs decreased from 20% to 15.45% of sales from 2017 to 2018, so additional profits of $1,295,000 could be gained by further reducing costs to 2.5% of sales.

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    You are on page 1of 5

    ELVIRA ROSSELINA ANGGRAINI

    MATRIKULASI MANAGERIAL ACCOUNTING 2019


    FINAL TEST

    CASE NO. 1

    1. Should Thomson accept the special order? By how much will profit increase or decrease if
    the order is accept?

    Because of Thomson has 40.000 units idle capacity so the special order can be accepted.
    Direct materials $ 8
    Direct labor $ 10
    Variable overhead $ 4
    Variable cost $ 22

    Negotiated price $ 24

    Additional profit = ($ 24 - $ 22) x 34.000 units


    = $ 68.000

    Thomson’s profit will increase $ 68.000

    2. Suppose that Thomson’s distribution centre at the warehouse is operating at full capacity
    and would need to add capacity costing $ 6.000 for every 5.000 units to be packed and
    shipped. Should Thomson accept the special order? By how much will profit increase or
    decrease if the order is accept?

    Add capacity costing = $ 6.000 x (34.000 / 5.000) = $ 42.000

    Sales: $ 24 x 34.000 $ 816.000


    Less:
    Direct materials ($ 8 × 34.000) $ (272.000)
    Direct labour ($ 10 × 34.000) $ (340.000)
    Variable overhead ($ 4 × 34.000) $ (136.000)
    Contribution margin $ 68.000
    Additional packing cost $ (42.000)
    Additional profit $ 26.000

    Thomson’s profit will increase $ 26.000 so that the special order can be accepted.
    ELVIRA ROSSELINA ANGGRAINI
    MATRIKULASI MANAGERIAL ACCOUNTING 2019
    FINAL TEST

    CASE NO. 2

    1. If no changes are made to the selling price or cost structure, determine the number of units
    that Agro Engine Company must sell (a) to break even and (b) to achieve its net income
    objective
    a. to break even
    Break even units = fixed cost / (price – variable cost)
    = Rp 30.000.000/(Rp 30.000 – Rp 5.000)
    = Rp 30.000.000/Rp 25.000
    = 1.200 units

    b. to achieve its net income objective


    Operating income = 100/75 x Net Income
    = 100/75 x Rp 15.000.000
    = Rp 20.000.000

    Net Income units = (fixed cost + operating income) / (price – variable cost)
    = (Rp 30.000.000 + Rp 20.000.000)/(Rp 30.000 – Rp 5.000)
    = Rp 50.000.000/Rp 25.000
    = 2.000 units

    2. Determine which alternative Agro Engine should select to achieve its net income objective.
    Show your calculation

    a. reduced selling price by 20%, projected 2.000 units sold

    Income Statement:
    Sales (Rp 24.000 x 2.000 units) Rp 48.000.000
    Variable cost ( Rp 5.000 x 2.000 units) Rp 10.000.000
    Contribution margin Rp 38.000.000
    Fixed cost Rp 30.000.000
    Operating income Rp 8.000.000
    Tax (25% x operating income) Rp 2.000.000
    Net income Rp 6.000.000

    b. lower variable cost per unit by Rp 500, price reduced by Rp 2.500, expected 1.800 units
    sold

    Income Statement:
    Sales (Rp 27.500 x 1.800 units) Rp 49.500.000
    Variable cost ( Rp 4.500 x 1.800 units) Rp 8.100.000
    Contribution margin Rp 41.400.000
    Fixed cost Rp 30.000.000
    Operating income Rp 11.400.000
    Tax (25% x operating income) Rp 2.850.000
    Net income Rp 8.550.000
    ELVIRA ROSSELINA ANGGRAINI
    MATRIKULASI MANAGERIAL ACCOUNTING 2019
    FINAL TEST

    c. reduced fixed cost by 20%, price reduced by 10%, expected 1.700 units sold

    Income Statement:
    Sales (Rp 27.000 x 1.700 units) Rp 45.900.000
    Variable cost ( Rp 5.000 x 1.700 units) Rp 8.500.000
    Contribution margin Rp 37.400.000
    Fixed cost Rp 24.000.000
    Operating income Rp 13.400.000
    Tax (25% x operating income) Rp 3.350.000
    Net income Rp 10.050.000

    The most profitable condition is C term, with reduced fixed cost by 20%, lower selling price
    by 10% and expected for selling 1.700 units of the years
    ELVIRA ROSSELINA ANGGRAINI
    MATRIKULASI MANAGERIAL ACCOUNTING 2019
    FINAL TEST

    CASE NO. 3
    1. Classify the costs as four categories quality cost

    Category 2017 2018


    Prevention costs:
    Quality training Rp 40.000 Rp 80.000
    Appraisal costs:
    Materials inspection Rp 60.000 Rp 40.000
    Product inspection Rp 100.000 Rp 125.000
    Internal failure costs:
    Scrap Rp 400.000 Rp 300.000
    Rework Rp 600.000 Rp 400.000
    External failure costs:
    Product warranty Rp 800.000 Rp 600.000

    2. Compute quality cost as percentage of sales for each two years. How much profit will be
    increased because of quality improvements? Assuming sales remain the same, and quality
    cost can be reduced to 2,5% of sales, how much additional profit through quality
    improvements?

    Category 2017 % 2018 %


    Prevention costs:
    Quality training Rp 40.000 0,40% Rp 80.000 0,80%

    Appraisal costs:
    Materials
    inspection Rp 60.000 0,60% Rp 40.000 0,40%
    Product
    inspection Rp 100.000 1,00% Rp 125.000 1,25%

    Internal failure costs:


    Scrap Rp 400.000 4,00% Rp 300.000 3,00%
    Rework Rp 600.000 6,00% Rp 400.000 4,00%
    External failure costs:
    Product warranty Rp 800.000 8,00% Rp 600.000 6,00%
    Total quality costs Rp 2.000.000 20,00% Rp 1.545.000 15,45%

    If quality costs drop to 2,5% of sales, another Rp 1.295.000 of profit improvement is possible
    Rp 1.545.000 – (2,5% x Rp 10.000.000) = Rp 1.545.000 – Rp 250.000
    = Rp 1.295.000
    ELVIRA ROSSELINA ANGGRAINI
    MATRIKULASI MANAGERIAL ACCOUNTING 2019
    FINAL TEST

    3. Prepare a quality cost report for 2018

    NCIS Company
    Quality Cost Report
    For the Year Ended 2018

    Quality Cost % of sales


    Prevention costs:
    Quality training Rp 80.000 Rp 80.000 0,80%

    Appraisal costs:
    Materials inspection Rp 40.000
    Product inspection Rp 125.000 Rp 165.000 1,65%

    Internal failure costs:


    Scrap Rp 300.000
    Rework Rp 400.000 Rp 700.000 7,00%
    External failure costs:
    Product warranty Rp 600.000 Rp 600.000 6,00%
    Total quality costs Rp 1.545.000 15,45%

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