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# MGT402 GDB Fall 2019 Solution & Discussion

MGT402 GDB Fall 2019 Solution & Discussion

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MGT 402 - Cost & Management Accounting GDB No.1 semester fall 2019 due date 23-1-2020

Scenario:

AA Manufacturing Co. is engaged in production of coke. The work is done in two processes. The coal is the basic raw material for the production of coke. In addition to coke, the production process also produces other products – light oil, and crude tar. On a certain month 8000 Units@Rs.50 per unit was put in the first process. After the completion of first process, the following capacities of each of the three products are available for second process:

Coke                2400 units

Light-oil          1067 liter

Crude-tar         800 liter

We have ignored the byproduct “gas” which is produced in the said process and which consumes some of the quantity of material that is Coal put in the first process.

The market price of the finished products is:

Coke                Rs.213 per unit

Light-oil          Rs.120 per liter

Crude-tar         Rs.67 per liter

Required:

1. Which of the following method you will use for the apportionment of material cost of first process when it is transferred to the second process, and why?
• Physical Quantity Ratio
• Selling Price Ratio

2. What is the monetary difference between the method chosen by you and the other method? Explain with the help of calculations of apportionment under each method.

Instructions:

• Write precisely and be limited to that only what is asked.
• Be honest, prepare solution by yourself and do not copy-paste from any source.

Salam

only 1 day left i am need solution mgt 402 gdb 2020

plz,share of solution for the mentioned post.

A.Physical Quantity Ratio

1. Total Cost 8000*50=400000

Coke             2400 Units

Light -Oil          1067 litters

Crude -Tar         800 litters

___________

Total             4267

Coke=     400,000/4267*2400= 22,4982

Light-Oil=  400,000/4267*1067=10,0023.44

Crude-Tar= 400,000/4267*800= 74994.14

B. Selling Price Ratio

Coke             2400*213Rs= 511,200

Light -Oil          1067*120 Rs=128,040

Crude -Tar         800 * 67 Rs= 53,600

___________

Total                      69,28,409

Coke             400,000/692840*511200=29,51,133

Light -Oil         400,000/692840*128040 =73879

Crude -Tar       400,000/692840*53600  =30927

____________

Total                                 400,000

Q No.2

When the unit of measurement is different, e.g litters and kilos,

Some method should be found of expressing them in a common unit.Some joint cost are not incurred strictly equally for all joint products.such cost can be separated and apportioned by introducing weighting factors.

Coke in units 2400

Light oil in litter 1067

Crude tar in litter 800

So we should calculate total cost each separate product to multiple per unit or per litter.

So it is most suitable method then other.

Mgt402 gdb solution
physicall quantity

unit put in department 8000 at the rate 50 ;;;; coke=2400 ligt oil=1067 crued taar=800 totale uitn = 4267

Quitnry ratio; c=4000000/4267*2400=2232200 ligt oil;4000000/4267*1067=99231 crude taar =400000/4267*800=74400

physicl qunitaty cost incurred in the departmaent 400000 c=213 ligth oil=120 crued taar=67

seling price

coke= light oil= crued oil=

coke=2400*213=41120 light oil=120*1067=128040 crued oil=800*67=53600 totle 692840

c=400000/692840*511200=295133.08 l.o=400000/692840*128040=73921.82 c.o=400000/692840*53600=3094.1 totle; 400000

# SOLUTION GDB No. 1 (MGT402 - Cost and Management Accounting) Fall 2019

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