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Managerial Accounting for Cost Producing


(a) Calculate how many bottles of each type were produced in the week with the highest production level and how many bottles of each type were produced in the week with the lowest production levels.

(b) Calculate separately the cost of producing a single unit of each type of bottle when the weekly
production level achieved is:

(i) 12,800 bottles in total

(ii) 16,000 bottles in total.

Calculate the unit costs to four decimal places of a £

(c) Completed bottles are sent to another company for cleaning, labeling and packing. This company employs several part-time personnel to clean, label and pack the bottles. These staff are paid on an incremental piecework basis. The details of the piecework scheme are as follows:

No of bottles prepared and packed Rate paid per bottle
2,001 â?" 2,000 1.6p
2,001 â?" 3,000 1.7p
3,001 â?" 4,000 1.8p

* Note: Only the extra bottles qualify for the higher rates, and any bottles that are broken are deducted from the number of bottles that qualify for piecework.

The figures below refer to the output achieved by three of the employees during a recent week:

Employee A B C
Bottles prepared and packed 2,500 3,200 3,900
Bottles broken 50 150 100

Calculate separately the amount payable to each of employees A, B and C based on the output achieved


Solution Summary

Managerial accounting for cost producing is examined.