Questions from Cost Accounting

Q: The graphs shown below show cost– volume–profit relationships as

The graphs shown below show cost– volume–profit relationships as they are typically represented in (i) management accounting and (ii) economic theory. In each graph...

Q: ‘A break-even chart must be interpreted in the light

‘A break-even chart must be interpreted in the light of the limitations of its underlying assumptions …’ (From Cost Accounting: A Managerial Emphasis, by C.T. Horngren.) Required: (a). Discuss the e...

Q: A manufacturer of glass bottles has been affected by competition from plastic

A manufacturer of glass bottles has been affected by competition from plastic bottles and is currently operating at between 65 and 70 per cent of maximum capacity. The company at present reports prof...

Q: JK Limited has prepared a budget for the next 12 months when

JK Limited has prepared a budget for the next 12 months when it intends to make and sell four products, details of which are shown below: Budgeted fixed costs are £240 000 per annum and...

Q: (a). Identify and discuss briefly five assumptions underlying cost–

(a). Identify and discuss briefly five assumptions underlying cost–volume–profit analysis. (b). A local authority, whose area includes a holiday resort situated on the east coast, operates, for 30 we...

Q: Each year, the paper and pulp industry produce millions of tonnes

Each year, the paper and pulp industry produce millions of tonnes of sludge in the production of paper. This sludge is typically disposed of in landfill sites or incinerated. Both disposal methods are...

Q: (a). ‘The analysis of total cost into its behavioural

(a). ‘The analysis of total cost into its behavioural elements is essential for effective cost and management accounting.’ Required: Comment on the statement above, illustrating your answer with examp...

Q: Video Technology Plc was established in 1987 to assemble video cassette recorders

Video Technology Plc was established in 1987 to assemble video cassette recorders (VCRs). There is now increased competition in its markets and the company expects to find it difficult to make an acce...

Q: York plc was formed three years ago by a group of research

York plc was formed three years ago by a group of research scientists to market a new medicine that they had developed. The technology involved in the medicine’s manufacture is both...

Q: Shown below is a typical cost–volume– profit chart:

Shown below is a typical cost–volume– profit chart: Required: (a). Explain to a colleague who is not an accountant the reasons for the change in result on this c...