The following details are provided for $3$ months ended $31$ Dec $2023$ of Company XYX Ltd:

Partciulars Amount in $ Partciulars Amount in $

Opening stock of Raw material $ $70,000\mathrm{.}00$ Discount $ $1,500\mathrm{.}00$

Closing stock of raw material $ $30,000\mathrm{.}00$ Carriage inwards $ $4,000\mathrm{.}00$

Purchase of Raw Material $ $100,000\mathrm{.}00$ Collection charges $ $500\mathrm{.}00$

Manufacturing wages $ $80,000\mathrm{.}00$ Technical Director fees $ $13,500\mathrm{.}00$

Unproductive Wages $ $10,000\mathrm{.}00$ Manager's Salary $ $18,000\mathrm{.}00$

Scrap Sale of raw material $ $1,000\mathrm{.}00$ Research expenses $ $8,000\mathrm{.}00$

Overtime $ $2,000\mathrm{.}00$ Goodwill written off $ $10,000\mathrm{.}00$

Depreciation $ $3,000\mathrm{.}00$ Cleaning $ $1,000\mathrm{.}00$

Insurance $ $1,000\mathrm{.}00$ Puchase of journals$/$books $ $100\mathrm{.}00$

Bank interest $ $6,000\mathrm{.}00$ Supervisor salary $ $6,000\mathrm{.}00$

Dividend $ $10,000\mathrm{.}00$ Postage $ $2,000\mathrm{.}00$

Inspection $ $1,000\mathrm{.}00$ Selling agent commission $ $1,500\mathrm{.}00$

Stores $ $4,000\mathrm{.}00$ Office electricity expenses $ $600\mathrm{.}00$

Loose tools $ $10,000\mathrm{.}00$ Donations $ $150\mathrm{.}00$

Advertisement $ $3,500\mathrm{.}00$ Income tax $ $750\mathrm{.}00$

$10000$ units were produced and sold.

The company expects to have a margin of $20\%$ on sales.

 

 

Required

A$)$ Prepare a detailed cost sheet from the above and compute the total sales and selling price per unit.

Please give details about your assumptions and why have you considered cost in specific heads.

B$)$ The sales team has recently got a quote from customer, they are interested to give an order of $500$ units at $$38$

per unit. As a management accountant what is your view on that?

C$)$ What would be the impact on the profit percentage if they sell it at $$38$ per unit?

D$)$ The competitors are currently selling it at $$37\mathrm{.}75$ per unit, what can the company do to sell at that price? They

want to maintain same margin on sales. $($hint $-$ any room for cost control?$)$

Answer rating: 100% (QA)

XYX Ltd Cost Sheet Analysis 3 Months Ended Dec 31 2023 Assumptions We can categorize the provided costs into Direct Materials Direct Labor Manufacturing Overheads Administrative Overheads Selling and ... View the full answer