Advanced Cost Accounting Week 4: Problem Set Two

Problem 8.42
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Cost of units completed and transferred $31740
Cost of remaining inventory
DM $2856
CC $1998
Total Cost of WIP $4854
8.42b
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Problem 12.35
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    =200:300 or 2:3
      Break even sales volume     Medium quality bikes =3number of high quality bikes/2
Total costs=((Fixed costs + medium quality bikes)(Invoice cost for medium quality bikes + sales commission)) + (high quality bikes (invoice costs for high quality bikes +sales commission))
=(80000+(3number of high quality bikes/2))(375+.2700)+ (3number of high quality bikes/2)(235+.2500)
=80000+772.5(3number of high quality bikes/2)+335(3number of high quality bikes/2)
=80000+1107.5(3number of high quality bikes/2)
Total revenue = (medium quality bikes)(sales price for medium quality bikes) + (high quality bikes)(sales price for high quality bikes)
80000+1107.5(3number of high quality bikes/2)=(3x/2)(500) + 700(80000+1107.5(3number of high quality bikes/2)
(750+700)(3number of high quality bikes/2)=1450(3number of high quality bikes/2)
Medium quality bikes =80000/(1450-1107.5)=233.58
Break even for high quality bikes = 234
Break even for medium quality bikes = 351
      TNI=50000     Total Revenue = 1450(3number of high quality bikes/2)
Total Cost=80000+1107.5(3number of high quality bikes/2)
Therefore TR-TC=TNI
(1450(3number of high quality bikes/2)) – (80000+1107.5(3number of high quality bikes/2))=50000
1450(3number of high quality bikes/2) – 1107.5(3number of high quality bikes/2)=130000
342.5(3number of high quality bikes/2)=130000
3number of high quality bikes/2=379.56
Number of high quality bikes=380
Number of medium bikes sold to make a profit of $50000=3*380/2=570
      Should the market for high quality bikes drop 20%, Ken would       sell 80%(200)=160 high quality bikes.     Problem 12.55
  The internal or floor space constraint...