(Answered):Managerial Accouting Assignment 1 . . . .

E2-43B

E2-44B

Question # 2 (20 marks)

Indirect labour(IDL)$10,600$11,500

Indirect materials (IDM) 4,400 5,000

Total (MOH)$15,000$16,500

DL(direct labour)$12,000$15,000

MOH = a + b*DL cost

Required:

Determine parameters a and b. (6 marks)

If DL cost is$13,200, how much would be allowed for IDL and IDM, individually?

Hint: Find the linear relationship between MOH and IDM (14 marks)

That is estimate MOH = c + d*IDM

Question #3 (40 marks)

Year 1Year 2

Units produced1,0001,000

Units sold 7001,300

Total sales$7,000$13,000

Total costs

Production:

Variable$2,000$2,000

Fixed 1,800 1,800

Selling and administration:

Variable$ 700$1,300

Fixed 2,800 2,800

(For Year 1)

Required:

Prepare income statement using variable costing. (8 marks)

Prepare income statement using absorption costing (8 marks)

Reconcile the