The cost accountant in Nekosia Berhad has hired you as
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The cost accountant in Nekosia Berhad has hired you as an intern to assist the work of the
senior costing executive on an upcoming product test launch in April 2022. The
management sees RIOS as a critical product line to increase Nekosia's market share in
As an intern, you will be helping your senior executive to classify and draft the estimated
product costs and period costs for decision making. The following information is available
for your reference:
1. The procurement manager has identified two potential suppliers of the critical
components in RIOS and obtained the following quotations:
Supplier: LA ORGANICA Ltd.
Raw shea Butter
(1 tub: 1kg)
(1 bottle: 1 litre)
(1 bottle: 50 ml)
(1 bag: 100g)
(1 bottle: 500ml)
Quantity Unit Price TOTAL (RM)
RM2,200.00 Supplier: PICK-PACK PLC
(1 box: 15 bottles)
(1 roll: 50 labels)
Unit Price TOTAL (RM)
The material sourced from La Organica will be used to make the 1,000 bottles of
RIOS. Each bottle will use the packaging material sourced from Pick-Pack PLC. 2.
The operating manager drafted the estimated hours to be worked on the production
of 1,000 bottles of RIOS:
A quick check with the Human Resource Department has provided the following
rates to be applied on the worked labour hours.
The senior costing executive extracted the spreadsheet on the total expected
indirect costs for RIOS:
Rate per Hour
RM5,000 RM5,000 RM5,000
a) Classify the costs of RIOS based on its cost behaviour and nature of expenditure
using the template provided.
Tick (✓) on cells where necessary.
Materials from La
3. Factory workers
5. Operating Manager
6. Production Utilities
b) Determine the total costs equation for the production utilities.
c) Calculate the unit product cost of RIOS for Nekosia Berhad.
Nature of Expenditure
d) The cost accountant proposes to the management to sell RIOS at RM150 per bottle.
If the sales manager is budgeting for 1,000 bottles per month, what would be the
projected net profit for Nekosia Berhad for the last six months of 2022?
e) Why is it essential for Nekosia Berhad to classify the costs based on the cost
Classification of cost of RIOS for cost accountant in Nekosia Berhad For 1000 bottles of RIOS to be launched from April 2022 a Cost Cost elements Cost…View the full answer