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Maf251 Oct2016 Diana

This document contains the calculations for determining the costing and pricing of a product. It includes: 1) The calculation of variable costs per unit including direct material, direct labor, production overhead, selling overhead, and administrative overhead which total to RM 38. 2) The calculation of a selling price of RM 51.10 by adding a 40% profit margin to the total production cost of RM 36.50. 3) An alternative calculation of selling price at RM 54.29 by adding a 30% profit margin to the total variable cost of RM 38.

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731 views2 pages

Maf251 Oct2016 Diana

This document contains the calculations for determining the costing and pricing of a product. It includes: 1) The calculation of variable costs per unit including direct material, direct labor, production overhead, selling overhead, and administrative overhead which total to RM 38. 2) The calculation of a selling price of RM 51.10 by adding a 40% profit margin to the total production cost of RM 36.50. 3) An alternative calculation of selling price at RM 54.29 by adding a 30% profit margin to the total variable cost of RM 38.

Uploaded by

SITI NUR DIANA SELAMAT
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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SITI NUR DIANA BINTI SELAMAT

2020488484

JAC 110 4D

QUESTION 5 OCT 2016

a) i.
Vc per piece Fixed oh
Direct material RM 480 000/40 000 -
= 12.00
Direct labour RM 380 000/40 000 -
= 9.50
Production OH RM 360 000/40 000 40/100x RM 600 000
= 9.00 = 240 000
Selling OH RM 180 000/40 000 RM 330 000-RM 180 000
= 4.50 = RM 150 000
Administrative OH RM 120 000/40 000 60/100x RM 300 000
= 3.00 = RM 180 000
Total 38.00 570 000

ii.

RM
Direct material RM 480 000/40 000
= 12.00
Direct labour RM 380 000/40 000
= 9.50
Production OH RM 600 000/40 000
= 15.00
Total production cost 36.50

Profit (40/100) 14.60

Selling price (140/100) 51.10

iii.

Selling price (TOTAL VC + 30/100 margin)

RM
Direct material RM 480 000/40 000
= 12.00
Direct labour RM 380 000/40 000
= 9.50
Production OH RM 360 000/40 000
= 9.00
Selling OH 4.50

Administrative OH 3.00

Total variable cost(70/100) 38.00

Profit (38 x 30/70) 16.29

Selling price full 54.29

• Selling price (total cost + 25/100 markup)


RM
Direct material RM 480 000/40 000
= 12.00
Direct labour RM 380 000/40 000
= 9.50
Production OH RM 600 000/40 000
= 15.00
Selling OH RM 330 000/40 000
= 8.25
Administrative OH RM 300 000/40 000
=7.50
Total variable cost(full) 52.25

Profit (25/100) 13.06

Selling price (125/100) 65.31

b) Minimum price = VC- VSOH + FPOH


= 38 – 4.50 + ( 5 000/2 000)
= RM 36
c) *
• Cheap and easy to operate
• All cost are covered

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