PH Ltd. manufactures and sells two products, namely BXE and DXE. The company's investment in fixed...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
PH Ltd. manufactures and sells two products, namely BXE and DXE. The company's investment in fixed assets is 2 lakhs. The working capital investment is equivalent to three months' cost of sales of both the products. The fixed capital has been financed by term loan lending institutions at an interest of 11% p.a. Half of the working capital is financed through bank borrowing carrying interest at the rate of 19.4%, the other half of the working capital being generated through internal resources. The operating data anticipated for 2016-17 is as under: Product Production per annum (in units) Direct Material/unit: Material A (Price 4 per kg) Material B (Price 2 per kg) Direct labour hour BXE 5,000 DXE 10,000 1kg 1kg 5 0.75Kg 1kg 3 Direct wage rate is 2 per hour. Factory overheads are recovered at 50% of direct wages. Administrative overheads are recovered at 40% of factory cost. Selling and distribution expenses are 2 and * 3 per unit respectively of BXE and DXE. The company expects to earn an after tax profit of 12% on capital employed. The income tax rate is 50%. Required: (1) Prepare a cost sheet showing the element wise cost, total cost, profit and selling price per unit of both the products. (ii) Prepare a statement showing the net profit of the company after taxes for the 2016-17. PH Ltd. manufactures and sells two products, namely BXE and DXE. The company's investment in fixed assets is 2 lakhs. The working capital investment is equivalent to three months' cost of sales of both the products. The fixed capital has been financed by term loan lending institutions at an interest of 11% p.a. Half of the working capital is financed through bank borrowing carrying interest at the rate of 19.4%, the other half of the working capital being generated through internal resources. The operating data anticipated for 2016-17 is as under: Product Production per annum (in units) Direct Material/unit: Material A (Price 4 per kg) Material B (Price 2 per kg) Direct labour hour BXE 5,000 DXE 10,000 1kg 1kg 5 0.75Kg 1kg 3 Direct wage rate is 2 per hour. Factory overheads are recovered at 50% of direct wages. Administrative overheads are recovered at 40% of factory cost. Selling and distribution expenses are 2 and * 3 per unit respectively of BXE and DXE. The company expects to earn an after tax profit of 12% on capital employed. The income tax rate is 50%. Required: (1) Prepare a cost sheet showing the element wise cost, total cost, profit and selling price per unit of both the products. (ii) Prepare a statement showing the net profit of the company after taxes for the 2016-17.
Expert Answer:
Answer rating: 100% (QA)
a Cost sheet Direct material Direct wages Prime cost Factory OHS Factory cost Off... View the full answer
Related Book For
Managerial Accounting Decision Making and Performance Management
ISBN: 978-0273764489
4th edition
Authors: Ray Proctor
Posted Date:
Students also viewed these accounting questions
-
The Alborg Company Ltd manufactures and sells doors and window frames to the building trade. It has been expanding rapidly over the last two years, experiencing an annual growth rate of 25%. The...
-
George Ltd manufactures and sells two different types of coils used in electric motors, in September Jessica Martin, the management accountant, compiled the following data for the upcoming annual...
-
A company manufactures and sells two products with a fixed cost of $36,000. Several data concerning each product is as follows: Deluxe Basic $ 48,00 $72.00 $18.00 $42.00 Selling price Variable costs...
-
On August 31, 2014, Nina Herrera borrowed $5,000 from Second State Bank. Herrera signed a note payable, promising to pay the bank principal plus interest on August 31, 2015. The interest rate on the...
-
Describe the major elements of a comprehensive framework for managing and controlling quality, such as the framework presented in Exhibit 17.2.
-
Weightless Inc. produces a Bath and Gym version of its popular electronic scale. The anticipated unit sales for the scales by sales region are as follows: Bath Scale Gym Scale East Region unit...
-
Frostbite Glove Company produces three types of gloves: small, medium, and large. A glove pattern is first stenciled onto fabric in the Pattern Department. Thestenciled patterns are then sent to the...
-
You expect the stock market to decline, but instead of selling stocks short, you decide to sell a stock index futures contract based on an index of New York Stock Exchange common stocks. The index is...
-
Make-or-Buy Decision, Alternatives, Relevant Costs Each year, Giada Company produces 19,000 units of a component part used in tablet computers. An outside supplier has offered to supply the part for...
-
5-1. A manufacturer of mountain bike will design and implement an automated system for welding bicycle frames. All works related to this project will be conducted within the company without any...
-
1. Give the IUPAC names for the following ethers. a. CH3C=CCH2OCH3 . CH3 H, Br b. CICH2CH2OCH3 C. f. Br OCH,CH, OCH3 d. g. CH(CH;), CH3 2. Write structural formulas for the following compounds. ....
-
Average corporate tax rates Ordinary income in 2 0 1 7 was taxed subject to the rates shown in the accompanying table. Using the data in the table, perform the following: a . Calculate a firm s tax...
-
Rosie Robotics has been experiencing significant financial difficulties in recent times. On December 31st, 2017, a $200,000, 10-year, 5% notes payable was due to Copper City Bank that Rosie Robotics...
-
How do emerging theories, such as social exchange theory and psychological contract theory, offer insights into the reciprocal dynamics between employers and employees in cultivating sustained...
-
Taballa Ltd owns all the share capital of Amaroo Ltd . The income tax rate is 3 0 % . The following transactions took place during the periods ended 3 0 June 2 0 2 3 or 3 0 June 2 0 2 4 . ( a ) On 1...
-
Summit Systems has an equity cost of capital of 10.5%, will pay a dividend of $1 .25 in one year, and its dividends had been expected to grow by 6.0% per year. You read in the paper that Summit...
-
(m) (sl 12 F D C 10 A 2 2 E Copyright www.physicstu rials.or B 10 12 (m) *Tip: Displacement = final position - initial position 9. A man leaves his home from point A. He moves 3m north and reaches...
-
What is beacon marketing? What are digital wallets?
-
JK plc operates a chain of fast-food restaurants. The company uses a standard marginal costing system to monitor the costs incurred in its outlets. The standard cost of one of its most popular meals...
-
Hughes Healthfoods makes and sells two types of diet supplement, Slim Quick (SQ) and Healthy Living (HL). It has a single production line on which the two products are made alternately in batches....
-
It is 30 January 2013 and Worthy Ltds board of directors is meeting to discuss the 2012 accounts (summarized below together with those of 2011). Worthy Ltd is a manufacturing business and all its...
-
Schedule of Cost of Goods Sold Sydney Company reported the following amounts for October: Use Excel to prepare a schedule of cost of goods sold for October. Beginning raw materials inventory....
-
For each of the following unrelated companies, compute the cost of goods manufactured and the cost of goods sold: A B C Selling expenses Factory insurance. Ending finished goods inventory....
-
The following transactions occurred during January 2019 for Richards Manufacturing Company: Jan. 5 Acquired $4,500 of materials on account that will be used to produce product for resale. 11...
Study smarter with the SolutionInn App