Question

Parti ABC Ltd uses a predetermined overhead rate to estimate the total manufacturing overhead for the quarter ending 30 September 2019. Based on this, the estimated total manufacturing overhead cost is $200,200 and the estimated level of activity is 11.000 machine hours. By the end of 30 September 2019. ABC Ltd incurred actual total manufacturing overhead costs of $195 000 and 10 500 total machine hours Required: (al Calculate the predetermined overhead rate. [2 marks) Suggested Answer: Click or tap here to enter text Page 8 of 12 BUAC033 Chand Management Accounting Semester 2020 Or you can use the given excel document to show your work for this question b) Determine the amount of underapplied or overappled manufacturing overhead for the quarter ending 36 September 2019. (3 marks) Suggested Answer: Click or tap here to vier text Or you can use the given excel document to show your work for this question Part 11 The management at Han Products is trying to decide whether to continue manufacturing a part or to buy it from an outside supplier. Han Products manufactures 30,000 units of part 5-6 each year for use on its production line. At this level of activity, the cost per unit for part 5-6 is Direct materials $3.60 Direct labour 10.00 Variable manufacturing overhead 240 Fixed manufacturing overhead 9.00 Total cost per part 25.0D An outside supplier has offered to sell 30,000 units of part 5 - 6 each year Han Products for $21 per part. If Han Products accepts this offer the facilities now being used to manufacture part S-6 could be rented to another company at an annual rental of $80,000. However, Han Products has determined that two-thirds of the fixed manufacturing overhead being applied to part S-6 would continue even if part 5-6 were purchased from the outside supplier. Required (a) Make a recommendation on whether S-6 should be manufactured or purchased. Support your answer with appropriate incremental analysis. 18 marks) Suggested Answer: Click or tap here to enter text Or you can use the given excel document to show your work for this question (b) What non-financial factors should management consider in making this decision? (4 marks) Page of 12

Answer 1

As per the HOMEWORKLIB RULES i have done the first question as these are the multiple question. Kindly rate me. Thankyou