Examen Avril 2019, questions PDF

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Summary

CASE 1: 26 points (out of 40)The activity of Gravetout Ltd is to engrave CDs (mainly video games) and vinyl records. The two products are engraved in the same workshop.At the beginning of the period, we have the following inventories: Blank CDs (in units): 5,000 units at 3 € / unit; Blank vinyl reco...

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CASE 1: 26 points (out of 40) The activity of Gravetout Ltd is to engrave CDs (mainly video games) and vinyl records. The two products are engraved in the same workshop. At the beginning of the period, we have the following inventories: - Blank CDs (in units): 5,000 units at 3.58 € / unit; - Blank vinyl records (in kilos): 300 kilos at 9.525 € / kilo; - Engraved CDs (in units): 4,000 units at 7.50 € / unit; - Engraved vinyl records (in units): 2,000 units at 2.30 € / unit. Inventories are valued using the AVCO (average weighted cost). During the period, the company carried out the following operations: -

-

-

Purchases : o 105,000 blank CDs at 1.80 € / unit ; o 5,100 kilos of blank vinyl records at 4.85 € / kilo. Production : o 100,000 engraved CDs for which we used 100,000 blank CDs; o 50,000 engraved vinyl records ; o We can get 10 units of blank vinyl records out of 1 kilo of blank vinyl records  Production of engraved vinyl records used 5,000 kilos of blank vinyl records; o To engrave one CD (master disc, matrices, pressing) we need to use the machines during 6 minutes. So, 10,000 machine-hours were necessary to engrave the CDs ; o The direct cost of 1 machine-hour for the CDs is 30 € / hour ; o For a vinyl record, the three production steps (engraving, galvanizing and pressing) need to use the machines during 1.2 minute (per unit of vinyl record). So, 1,000 machine-hours were necessary to engrave the vinyl records ; o The direct cost of 1 machine-hour for the vinyl records is 50 € / hour. Sales o 103,000 engraved CDs were sold with a selling price of 10 € / unit; o 49,000 engraved vinyl records were sold with a selling price of 4 € / unit; o Sales commissions represent 10% of the Sales Revenue.

The company is organized in five cost centers with the following indirect costs and drivers: COST CENTER Information Systems Facility management Purchasing Production Sales

INDIRECT COSTS 80,000.00 € 50,000.00 € 76,067.50 € 102,000.00 € 74,140.00 €

DRIVERS

Purchases in €uros Machine-hours Sales Revenue

The cost center « Information Systems » supports the other cost centers as follows: -

5% for Facility management ;

-

25% for Purchasing ; 45% for Production ; 25% for Sales.

The cost center « Facility Management » supports the other cost centers as follows: -

20% for Purchasing ; 50% for Production ; 30% for Sales.

At the end of the period, we have the following inventories: - Blank CDs (in units): 10,000 units at 2.74 € / unit; - Blank vinyl records (in kilos): 400 kilos at 7.40 € / kilo; - Engraved CDs (in units): 1,000 units at 7.25 € / unit; - Engraved vinyl records (in units): 3,000 units at 2.05 € / unit. Inventories are valued using the AVCO (average weighted cost). Questions: (all calculations will be presented both at the unit level and in total) 1) Build the indirect costs assignment table; 2) Compute the cost of blank records (CDs and vinyl) purchased and used (the blank vinyl records inventories are managed in kilos); 3) Compute the production cost of engraved records (CDs and vinyl) manufactured and sold; 4) Compute the Full costs ; 5) Compute the Incomes.

Assignment table Indirect costs

Support cost ctrs Informat° systems

Total Second. Alloc 1 Sub totals Second. Alloc 2 Final totals Types of drivers

80 000 - 80 000 0 0

Facility management 50 000 4 000 54 000 - 54 000 0

Nbr. driver units Cost per driver unit

Primary cost ctrs

Total

Purchasing

Production

Sales

76 067,50 20 000 96 067,50 10 800 106 867,50 Purchases in euros 213 735

102 000 36 000 138 000 27 000 165 000 Machine hours 11 000

74 140 20 000 94 140 16 200 110 340 Sales revenue 1 226 000

0,50 €

15 €

0,09 €

382 207,50 0 382 207,50 0 382 207,50

Calculate the purchasing costs (inventories of blank vinyl records are in kilos) Quantitie s Purchase price Indirect purch. costs Cost of material purchase d

Blank CDs Unit Amount cost

105 000

1,80 € 189 000 €

189 000

0,50 €

105 000

2,70 € 283 500 €

94 500 €

Blank vinyl records Kilos Unit Amount cost

Check Total indirect costs

5 100

4,85 €

24 735 €

24 735

0,50 €

12 367,50 €

5 100 7,275 €

37 102,50 €

106 867,50 €

Inventories blank CDs:

Beg. Inv. Purchases TOTALS

Quantitie s 5 000 105 000 110 000

Unit cost 3,58 2,70 2,74

Amount 17 900 Usage 283 500 End. Inv. 301 400 TOTALS

Quantitie s 100 000 10 000 110 000

Unit cost 2,74 2,74 2,74

Amount

Quantitie s 5 000 400

Unit cost 7,40 7,40

Amount

5 400

7,40

274 000 27 400 301 400

Inventories blank vinyl records (in kilos):

Beg. Inv. Purchases

Quantitie s 300 5 100

Unit cost 9,525 7,275

TOTALS

5 400

7,40

Amount 2 857,50 Usage 37 102,5 End. Inv. 0 39 960 TOTALS

37 000 2 960 39 960

Calculate production costs, Engraved CDs Quantitie Unit Amount s cost Cost of material used Direct costs machine hours Indirect production costs Cost of products manufact.

Engraved vinyl records Kilos Unit Amount cost

100 000

2,74 €

274 000 €

5 000

7,40 €

37 000 €

10 000

30 €

300 000 €

1 000

50 €

50 000 €

10 000

15 €

150 000 €

1 000

15 €

15 000 €

100 000

7,24 €

724 000 €

50 000

2,04 €

102 000 €

Unit cost 7,50 7,24 7,25

Amount

Check Total indirect costs

165 000 €

Inventories engraved CDs:

Beg. Inv. Production TOTALS

Quantitie s 4 000 100 000 104 000

30 000 Sales 724 000 End. Inv. 754 000 TOTALS

Quantitie s 103 000 1 000 104 000

Unit cost 7,25 7,25 7,25

Amount 746 750 7 250 754 000

Inventories engraved vinyl records:

Beg. Inv. Production TOTALS

Quantitie s 2 000 50 000 52 000

Unit cost 2,30 2,04 2,05

Amount 4 600 Sales 102 000 End. Inv. 106 600 TOTALS

Quantitie s 49 000 3 000 52 000

Unit cost 2,05 2,05 2,05

Amount 100 450 6 150 106 600

Calculate the full costs, Engraved CDs sold Quantities Unit Amount cost

Engraved vinyl rec. Sold Kilos Unit Amount cost

Check Total indirect costs

Cost of products sold

Direct selling costs : Commission s Indirect selling costs

103 000

7,25 €

746 750 €

49 000

2,05 €

100 450 €

1 030 000

10%

103 000 €

196 000

10 %

19 600 €

1 030 000

0,09 €

92 700 €

196 000

0,09 €

103 000

9,15 €

942 450 €

49 000

2,81 €

17 640 € 110 340 €

Full cost 137 690 €

Calculate the incomes, Quantities

Sales revenue Full cost Income

103 000 103 000 103 000

Unit price/cos t

Amount

10 € 1 030 000€ 9,15 € 0,85 €

942 450 € 87 550 €

Kilos

Unit price/cos t

Amount

Totals

49 000

4€

196 000 €

1 226 000 €

49 000 49 000

2,81 € 1,19 €

137 690 € 58 310 €

1 080 140 € 145 860 €...