Cost per Unit – NBC Institute

MA – May 2016 – L2 – Q4c – Relevant cost and revenue

Determine the cost per unit under different day rate schemes and assess the advisability of introducing a high day rate scheme.

Question

HK Manufacturing Company is considering introducing a high day rate incentive scheme. An experiment with one of its average workers showed that an employee is likely to produce 1,500 units in a 40-hour week if she was paid GH¢25 per hour, but 1,800 units if she was paid GH¢31.25 per hour.

Assume that production overhead is added to cost at the rate of GH¢25 per direct labour hour.

Required:

i) Determine the cost per unit of output under both the low day rate scheme and high day rate scheme.
(3 marks)

ii) Is it advisable to introduce the high day rate scheme?
(2 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost per Unit, Day Rate Scheme, Decision Making, Incentive Scheme
Level: Level 2

Topic: Relevant Cost and Revenue
Series: MAY 2016

IMAC – APRIL 2022 – L1 – Q1 – Budgeting | Process Costing

Computation of costs and preparation of Process X account using the weighted average method, and preparation of functional budgets for a manufacturing firm.

Question

a) The following information has been extracted from the records of a company for the half-year ended 31 March 2021. A product, Capital Q, goes through two processes, X and Y:

Details relating to Process X for the period: Input units: 5,000 Finished units transferred to Process Y: 3,200 Closing WIP: 840 Normal losses: 10%

Normal losses have an estimated resale value of GH¢4 per unit.

Costs incurred during the period:

	GH¢
Direct materials	31,250
Direct labour	21,200
Overheads	17,325

Abnormal Losses and Closing WIP had the following degrees of completion at the end of the period:

	Direct materials	Direct labour	Overheads
Abnormal Losses	100%	80%	50%
Closing WIP	100%	80%	50%

Required: Using the weighted average method: i) Compute the cost per unit for each of the element of costs. (5 marks)

b) Compute the value of the complete units transferred to Process Y. (5 marks)

c) Compute the value of the closing WIP. (5 marks)

d) Prepare Process X Account for the period. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Abnormal Loss, Cost per Unit, Functional Budgets, Principal Budget Factor, Process Account
Level: Level 1

Topic: Budgeting, Process Costing
Series: APR 2022

MA – May 2016 – L2 – Q4c – Relevant cost and revenue

Determine the cost per unit under different day rate schemes and assess the advisability of introducing a high day rate scheme.

Question

Assume that production overhead is added to cost at the rate of GH¢25 per direct labour hour.

Required:

i) Determine the cost per unit of output under both the low day rate scheme and high day rate scheme.
(3 marks)

ii) Is it advisable to introduce the high day rate scheme?
(2 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost per Unit, Day Rate Scheme, Decision Making, Incentive Scheme
Level: Level 2

Topic: Relevant Cost and Revenue
Series: MAY 2016

IMAC – APRIL 2022 – L1 – Q1 – Budgeting | Process Costing

Computation of costs and preparation of Process X account using the weighted average method, and preparation of functional budgets for a manufacturing firm.

Question

a) The following information has been extracted from the records of a company for the half-year ended 31 March 2021. A product, Capital Q, goes through two processes, X and Y:

Details relating to Process X for the period: Input units: 5,000 Finished units transferred to Process Y: 3,200 Closing WIP: 840 Normal losses: 10%

Normal losses have an estimated resale value of GH¢4 per unit.

Costs incurred during the period:

	GH¢
Direct materials	31,250
Direct labour	21,200
Overheads	17,325

Abnormal Losses and Closing WIP had the following degrees of completion at the end of the period:

	Direct materials	Direct labour	Overheads
Abnormal Losses	100%	80%	50%
Closing WIP	100%	80%	50%

Required: Using the weighted average method: i) Compute the cost per unit for each of the element of costs. (5 marks)

b) Compute the value of the complete units transferred to Process Y. (5 marks)

c) Compute the value of the closing WIP. (5 marks)

d) Prepare Process X Account for the period. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Abnormal Loss, Cost per Unit, Functional Budgets, Principal Budget Factor, Process Account
Level: Level 1

Topic: Budgeting, Process Costing
Series: APR 2022

Question Tag: Cost per Unit

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MA – May 2016 – L2 – Q4c – Relevant cost and revenue

Determine the cost per unit under different day rate schemes and assess the advisability of introducing a high day rate scheme.

IMAC – APRIL 2022 – L1 – Q1 – Budgeting | Process Costing

Computation of costs and preparation of Process X account using the weighted average method, and preparation of functional budgets for a manufacturing firm.

MA – May 2016 – L2 – Q4c – Relevant cost and revenue

Determine the cost per unit under different day rate schemes and assess the advisability of introducing a high day rate scheme.

IMAC – APRIL 2022 – L1 – Q1 – Budgeting | Process Costing

Computation of costs and preparation of Process X account using the weighted average method, and preparation of functional budgets for a manufacturing firm.

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MA – May 2016 – L2 – Q4c – Relevant cost and revenue

Determine the cost per unit under different day rate schemes and assess the advisability of introducing a high day rate scheme.

You're reporting an error for "MA – May 2016 – L2 – Q4c – Relevant cost and revenue"

IMAC – APRIL 2022 – L1 – Q1 – Budgeting | Process Costing

Computation of costs and preparation of Process X account using the weighted average method, and preparation of functional budgets for a manufacturing firm.

You're reporting an error for "IMAC – APRIL 2022 – L1 – Q1 – Budgeting | Process Costing"

MA – May 2016 – L2 – Q4c – Relevant cost and revenue

Determine the cost per unit under different day rate schemes and assess the advisability of introducing a high day rate scheme.

You're reporting an error for "MA – May 2016 – L2 – Q4c – Relevant cost and revenue"

IMAC – APRIL 2022 – L1 – Q1 – Budgeting | Process Costing

Computation of costs and preparation of Process X account using the weighted average method, and preparation of functional budgets for a manufacturing firm.

You're reporting an error for "IMAC – APRIL 2022 – L1 – Q1 – Budgeting | Process Costing"

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