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##### Financial and Managerial Accounting

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Question 1 - Costing;Cakes2Go is a company which manufactures and sells three types of cakes in packets. One of them is called HoneyCake and contains three types of sweeteners: honey, sugar and syrup. The standard materials usage and cost for one unit of HoneyCake (one packet) is as follows;?;Honey;20 grams at ?0?02 per gram;0?40;Sugar;15 grams at ?0.03 per gram;0?45;Syrup;10 grams at ?0?025 per gram;0?25;?????;1?10;?????;In the three months ended 30 November 2012, Cakes2Go produced 101,000 units of HoneyCake using 2,200 kg of honey, 1,400 kg of sugar and 1,050 kg of syrup. Note: there are 1,000 grams in a kilogram (kg).;Cakes2Go has used activity-based costing to allocate its overheads for a number of years. One of its main overheads is machine set-up costs. In the three months ended 30 November 2012, the following information was available in relation to set-up costs;Budget;Total number of units produced;Total number of set ups;Total set-up costs;Actual;Total number of units produced;Total number of set ups;Total set-up costs;264,000;330;?52,800;320,000;360;?60,000;Required;(a) Calculate the following variances for materials in HoneyCake;(i) Total materials usage variance;(ii) Total materials mix variance;(iii) Total materials quantity (yield) variance.;(b) Calculate the following activity-based variances in relation to the set-up cost of the machines;(i) The expenditure variance;(ii) The efficiency variance.;(c) Briefly outline the steps involved in allocating overheads using activity based costing.;(50 marks);Question 2 ? Budgeting;Write an essay of 1000 words demonstrating your conceptual understanding of the following questions.;Is budgeting used primarily for scorekeeping, attention, directing or problem solving?;How do strategic planning, long range planning and budgeting differ?;Why is budgeted performance better than past performance as a basis for judging actual results?;What are the major benefits of budgeting?;Is budgeting an unnecessary burden for day to day problems? Explain your answer.;Why is the sales forecast the starting point for budgeting?;How do Spreadsheets aid the application of sensitivity analysis?;(50 marks);Total (100 marks)

Paper#80292 | Written in 18-Jul-2015

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