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Manajement Accounting
UAS Semester Genap 2014/2015
t@spafebui
fSPA FEB UI
Problem I
Current Monthly Profits :
Revenue :
(15.000 units * $4.8)
$72.000
Variable Costs :
(15.000 units * $2.5)
$37.500
Contribution Margin
$34.500
Fixed Costs
$20.000
Operating Income
$14.500
Revenue :
(13.200 units * $6.3)
$83.160
Variable Costs :
(13.200 units * $2.5)
$33.000
Contribution Margin
$50.160
Fixed Costs
$20.000
Operating Income
$30.160
Revenue :
(21.000 units * $3)
$63.000
Variable Costs :
(21.000 units * $2.5)
$52.500
$ 100
Contribution Margin
$10.400
$20.000
($9.600)
$16.000
Incremental Cost
Incremental Profit
$ 5.700
D.
Incremental method:
Incremental Revenue/saving
One time order (8,000 x $4.00)
= $32,000
= $ 7,500
= ($14,400)
= ($19,600)
= ($ 500)
----------------------Total
$5,000
Final Copy should accept this option, because it gives total operating income $ 5,000
Alternative Method
Monthly Capacity = 20.000 units
Australian distributor order = 8.000 units
Others = 12.000 units
Revenue :
(12.000 units * $4.8)
$57.600
$32.000
Variable Costs :
$30.000
$19.600
Contribution Margin
$40.000
$20.000
$ 500
Operating Income
$19.500
E.
Incremental Method
Incremental Revenue or Saving
Used space rental
$ 1,000
Reduced VC (0.4*2.5*15,000)
$ 15,000
Incremental Cost
Fee for Mexican Manufacturer
($ 15,000)
($1 x 15,000)
-------------$ 1,000
At a current level of sales, Final copy should accept the offer, because it gives an
incremental $ 1,000 of operating income.
Alternative method:
Revenue :
(15.000 units * $4.8)
$72.000
Rent
$ 1.000
Variable Costs :
(15.000 units * $2.5 *60%)
$22.500
$15.000
Contribution Margin
$35.500
Fixed Costs
$20.000
Operating Income
$15.500
F.
Revenue:
(15.000 units * $5.05)
$75.750
Variable Costs:
(15.000 units * ($2.5+$0.1)
$39.000
Contribution Margin
$36.750
Fixed Costs
$20.000
Operating Income
$16.750
Problem II
1.
Activity
Prevention Costs :
Machine maintenance
330
Supplier training
40
Design reviews
200
570
Appraisal Costs :
Incoming inspections
63
Final testing
203
266
112
Scrap
67
179
68
Customer return
188
256
2. Value added Cost is a cost that, if eliminated, would reduce the actual or perceived
value or utility (usefulness) customers experience from using the product or service.
Non Value added Cost is a cost that, if eliminated, would not reduce the actual or
perceived value or utility (usefulness) customers experience from using the product or
service.
Activity
200
200
63
Machine maintenance
330
Scrap
67
Warranty repairs
68
Customer return
188
Rework
112
Supplier training
40
Final Testing
203
1.071
3. Yes, because by using activity based costing, the company is forced to separate
value added cost and non value added cost and it provides a useful overall framework
Problem III
A. ROI (Return on Investment) = Operating Income / Total Assets
(NOTE : All calculations are in Rp000)
ROI of Car Division = 2.475.000 / 33.000.000 = 7.5%
ROI of Spare-Part Dvision = 2.565.000 / 28.500.000 = 9%
EVA (Economic Value Added) = Net Operating Profit After Tax - {WACC * (Total
Invested Capital - Non interest bearing Liabilities) }
!!! Assume all current liabilites in this question are non interest bearing
liabilites!!!
(NOTE: All calculations and answers are in Rp000)
Based on ROI,RI, and EVA, it can be seen that the ROI of Spare-Part division is
higher than Car division, RI of Spare-Part division from both measurement of
investments is higher than Car division, and EVA of Spare-Part division is higher than
Car division. Overall, the performance of Spare-Part division is better than Car
division maybe because Spare-Part division production is more efficient and effective
than Car division.
D.
Because Car Division operates in Thailand and uses Baht as reporting currency, PT
Angkasa has to make a translation for the further apple to apple analysis between all
of its divisions. According to Accounting principle, Operating Income have to be
converted using average exchange rate, and Assets have to be converted using closing
rate at the date of balance sheet.
= Rp380
= Rp370
in Baht
Converted to rupiah
7,000,000
2,590,000,000
85,000,000
32,300,000,000
8.02%
Operating Income
Total Assets
ROI
Based on the calculations, Thailand car division has higher ROI comparing to
Indonesias division. (8.02% > 7.5%)
Problem IV
A. Assuming Atlantic division has reach its full capacity, minimum selling price
should be :
Minimum Price for Atlantic at full capacity = Incremental Cost + Opportunity
Cost
= $575 + ($1000 - $575)
= $1000
So, based on Atlantic perspective, they shouldnt accept the $500 order, because
minimum transfer price is higher than that.
B. If both division have excess capacity, the minimum selling price is only variable
costs of equipment production.
Minimum Price = $90 + $ 400 = $490
So, if there is a buyer willing to pay $500 per unit, the company should accept it.
Because the company can get an incremental contribution margin of $10 per unit
($500 - $490)
As a whole, the company will get an incremental profit of $100 (10 units * $10)
C. The disadvantage is that Atlantic Division occurs loss because the variable costs
are higher than the selling price.
The advantage is if one day Pacific Division couldnt sell all of its parts to outside
D. Atlantic Division needs to know whether Pacific Division has excess capacity or
not, because the variable cost of parts from Pacific Division in Atlantic Divisions cost
and revenue structure has a big influence in Atlantic Divisions decision making.
Problem V
1.
Strategic Objectives
Measures
Revenue growth
Cost reduction
Customer-satisfaction ratings
Number of new customers
turnover
Increase
implementation
suggestions
F. Increase employee morale
of
employee Percentage
of
line
workers
of
manufacturing
Employee-productivity ratings
2.
2.
Problem VI
1.
2. The analysis of operating income indicates that a significant amount of the increase
in operating income resulted from successful implementation of its product
differentiation strategy.