AIB Final Written Exam
AIB Final Written Exam
Question number 1
For b,
Budgeted contribution per unit = sales price per unit - variable cost per unit
= £20 - £11.5
= £8.5
For c,
Total Fixed cost = Fixed selling and distribution cost + production overhead variable
cost( £960,000- £240,000 = £720,000
= £75,000+£720,000
= £795,000
3. Breakeven point sales volume = Total fixed cost ÷ contribution per unit
= £795,000 ÷ £8.5
= £93,530
2. Since, Labour hours= 0.4 hours per unit & Labour hour cost = £ 18
So,
Labour= £18 * 0.4 = £7.2
3. Since, machine hours= 0.75 hours per unit % machine hour cost = £32
So,
Machine = £32 * 0.75 = £24
Therefore, Total prime cost = £56.2
Overhead costs,
1. Production setups= £160 *6 setups=
2. Production run time= £50 *4 hours = £200
3. Production inspection= £45*12 setups= £540
So, Overhead costs in unit = overhead costs/units
= £1700/125 = £13.6
Therefore, Total cost = £69.8
Given that,
One unit of cat requires 5 kgs of kitten.
It takes 2 hours to produce each unit of cats.
Closing inventory on April = 4000 finished cats.
= 20,000 kgs of kitten.
In month June,
Sales volume= 7,500
Closing inventory= 3,900
Opening inventory= 3,750
Therefore,
Production in units= Sales volume + closing inventory - opening inventory
= 7,650
In month June,
Usage = 33, 250
Closing inventory (+) = 15,600
Opening inventory (-) = 15,300
Therefore,
Total purchase (kgs) = Usage + Closing inventory- Opening inventory
= 38,550
In month June,
Answer of number 4
Given,
Topsoil= £900
Wooden Decking = £3,500
Plants = £3,500
Water Feature = £4,500
Labour = £2,100
Equipment = £500
Total cost = £15,900
Labour cost = £35 per hour
Total Labour hour = 30 hours
Answer of number 5:
Solution,
Here, Favourable is denoted as F & Adverse is denoted as A
Required Calculations:
1. Sales = (£80,000 ÷ £40,000) × £36,000
= £720,000
2. Material expense= (£160,000 ÷ £40,000) × £36,000
= £144,000
3. Labor expense= (£320,000 ÷ £40,000) × £36,000
=£ 288,000
4. Since, Maintenance cost= semi variable cost
= variable cost + fixed cost
Where , variable cost per unit = (High cost - Low cost) ÷ (High quantity- Low
Quantity)
= £170,000 – £140,000 ÷ £40,000-£30,000
= £3 per unit
c) Three of the major benefits that benefits provides the company is stated below:
1. Budget helps in increasing motivation amongst managers:
- The budgeting phase necessitates the involvement of managers from various
departments for the decision-making, improving their engagement. This type of
decision-making and problem-solving engagement boosts a manager's innate
morale, resulting in increased efficiency and improved performance. It also serves as
a valuable tool for communication between employees of all levels which makes
everyone aware of each other’s positions and challenges improving empathy and
support between them. This ultimately strengthens their relationship, increasing
work determination and overall satisfaction. All in all, increased motivation assists an
organisation in achieving higher levels of output, strengthening its market place
ultimately, retaining a competitive advantage.
Answer of number 6
A.
B. The following are eight performance metrics for Pearl Limited in (£):