Soal Asistensi Akuntansi Manajemen 1-6
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Transcript of Soal Asistensi Akuntansi Manajemen 1-6
Asistensi-1
Inventory Costing and Capacity Analysis
Asdos: Hidayah Asfaro Saragih
Problem 1
FGK Corporation manufactures and sells 50-inch television sets and uses standard costing. Actual data relating to January, February, and March of 2012 are as follows:
Unit data:January February March
Beginning inventory 0 300 300 Production 1,000 800 1,250 Sales 700 800 1,500 Variable costs: Manufacturing cost per unit produced $ 900 $ 900 $ 900 Operating (marketing) cost per unit sold $ 600 $ 600 $ 600 Fixed costs: Manufacturing costs $400,000 $400,000 $400,000Operating (marketing) costs $140,000 $140,000 $140,000
The selling price per unit is $2,500. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 1,000 units. There are no price, efficiency, or spending variances. Any production-volume variance is written off to cost of goods sold in the month in which it occurs.
Required:1. Prepare income statements for FGK in January, February, and March of 2012 under a)
Variable costing and b) Absorption costing2. Explain the difference in operating income for January, February, and March under variable
and absorption costing
Problem 2
The variable manufacturing costs per unit of FGK Corporation are as follows:
January February MarchDirect material cost per unit $500 $500 $500Direct manufacturing labor cost per unit 100 100 100Manufacturing overhead cost per unit 300 300 300 $900 $900 $900
Required:
1. Prepare income statements for FGK in January, February, and March of 2012 under throughput costing.
Problem 3
PT. Primatron manufactures and sell LED TV 32 inch. Below are data regarding company’s production on January and February 2013:
Selling price of LED TV of 32 inch per unit is Rp 5.000.000. Fixed manufacturing cost computed with the assumption that production capacity is 100 units per month. Production volume variance will be closed to cost of goods sold account. Required: 1. Compute operating income for January and February if PT. Primatron uses absorption costing? (4 points) 2. Compute operating income for January and February if PT. Primatron uses Variable costing? (4 points) 3. Can you explain the operating income difference? Show your computation. (2 points)
Asistensi-2Cost-Volume-Profit Analysis
Problem 1: UTS 2011-2012PT Newstar is distributor that sell “Me-Pad” a brand new type of gadget at an exhibition Newstar Plans to sell “Me Pad” for $500 each. The company purchase Me-Pad from manufacturer at $350 each, with the privilege of returning any unsold units for a full refund. The exhibition offer Newstar with 2 alternatives:
1. A fixed payment 0f $5.000 during exhibition2. 10% of total revenues earned during exhibition
Assume Newstar incur no other cost
Required:1. Calculate BEP unit for option 1 and 22. At what level of unit sold will Newstar earn the same operating income under either option?
For what range of unit sales will Newstar prefer option 1 over option 2?3. Calculate margin of safety and degree of degree of operating leverage at sales of $100 units
for two rental option.
Problem 2A company that sells its single product for $40 per unit uses cost-volume profit analysis in its planning. The company’s after tax income for the past year was $1.188.000 after applying effective tax rate 40%. The projected costs for manufacturing and selling its single product in the coming year are in the next column.
Variable costs per unit:Direct material $5Direct labor 4Manufacturing overhead 6Selling and administrative costs 3Total variable costs per unit 18
Annual fixed operating costs:Manufacturing overhead 6.200.000Selling and administrative costs 3.700.000Total annual fixed costs 9.900.000
Required:a. Calculate the total number of units needed to break even.b. Calculate sales volume in dollar required in the coming year to earn after-tax net income as
the past year.c. The company has learned that a new direct material is available that will increase the quality
of its product. The new material will increase the direct material costs by $3 per unit. The company will increase the selling price of the product to $50 per unit and increase its marketing costs $1.575.000 to advertise the higher quality product. Calculate the number of units the company should sell in order to earn a 10% before-tax return on sales.
Problem 3Andra company produces two products: squared and circles. The sales units mix for squares and circles was 1:5. The projected income for the coming year, segmented by product line, follows:
Squares Circles TotalSales $300.000 $2.500.000 $2.800.000Less: Variable Costs 100.000 500.000 600.000
Contribution margin 200.000 2.000.000 2.200.000Less: Direct Fixed Costs 28000 1.500000 1.528.000Product Margin 172.000 500.000 672.000Less: Common Fixed Cost 100.000Operating Income 572.000
The selling prices are $30 for squares and $50 for circles.Required:
a. Compute the number of units of each product that must be sold for Andra company to break even.
b. Compute the revenue that must earned to produce an operating income of 10% of sales revenues.
c. Suppose that Andra Company can increase the sales of squares with increased advertising. The extra advertising would cost an additional $45.000 and some of the potential purchasers of circles would switch to squares. In total, sales of squares would increase by 15.000 units, and sales of circles would decrease by 5.000 units. Would Andra be better off with this strategy?
Problem 4PT Fontana menjual produknya dengan harga Rp 60.000 per unit. Berikut informasi mengenai biaya variabel per unit:
Bahan baku langsung Rp 16.000Tenaga kerja langsung Rp 12.000Biaya overhead Rp 7.000 Total biaya manufacturing variabel Rp 35.000Biaya penjualan Rp 7.000Total biaya variabel Rp 42.000
Biaya tetap setiap tahunnya sebesar Rp 720.000.000.a. Untuk mencapai titik impas (break even), jumlah produk yang harus berhasil dijual PT
Fontana setiap tahunnya adalah:b. Berapa unit yang harus dihasilkan agar menghasilkan laba sebelum pajak sebesar 10% dari
nilai penjualan.c. Jika biaya manufacturing variable mengalami kenaikan 20% dan biaya penjualan menjadi Rp
8.000 sementara angka yang lain diasumsikan tidak mengalami perubahan, berapa jumlah yang harus dihasilkan untuk mencapai titik impas.
TEMPLATE MASTER BUDGET
Asistensi 3
Soal 1
1. revenues budgetfor the year ending june 30
April may june totalprice quantity total revenues
2. production budget (in units)for the year ending june 30
April may june totalbud unit sales +target end FG total req -beg FG units to be produced
3a. DM usage budget in Q in $for the year ending june 30
PHYSICAL UNITS BUDGET April may june totaldm req total q dm to be used COST BUD available from beg dm +to be purchased dm to be used
3b. DM purchases budgetfor the year ending june 30
totalP UNIT BUD April may june to be used +target end inv total req -beg inv purchase to be made COST BUD purchases
4. DML costs budgetfor the year ending june 30
Qproduced DML/unit total dml rate totalapril may june total
5. MOH costs budgetfor the year ending june 30
April may june totalVC variable manuf overhead FC fixed manufacturing overhead total MOH
6a. unit costs of end FG invfor the year ending june 30
product
cost per unit of input
input/unit output total
DM DML MOH total
6b. ending inventories budgetfor the year ending june 30
April may june Q cost/unit total Q cost/unit total Q cost/unit totalDM: FG: total ending inv
7. COGS budget
for the year ending june 30 April may junebeg FG inv DM used DML MOH COGM COGAS -end FG inv COGS
8. nonmanufacturing costs budgetfor the year ending june 30
April may juneVC: var selling and adm expense FC: fixed selling and adm expense TC
9. budgeted INCOME STATEMENTfor the year ending june 30
April may junerev -cogs gross margin -operating costs: operating income
10. budgeted BALANCE SHEETASSETS: LIABILITIES:
STOCKHOLDERS' EQUITY: TA TL&SHE
Soal 2
1. revenues budget
product P Q TR Total
2. production budget
Product bud unit sales +target end FG total req -beg FG units to be produced
3a. DM usage budget in Q in $
MaterialP UNIT BUD dm req for dm req for dm req for total q dm to be used COST BUD available from beg dm +to be purchased dm to be used
3b. DM purchases budget MaterialP UNIT BUD to be used +target end inv total req -beg inv purchase to be made COST BUD purchases
4. DML costs budget
product Qproduced DML/unit total dml rate total
total
5. MOH costs budget
VC FC total MOH
6a. unit costs of end FG inv
product cost/unit input/unit total input/unit totalDM1 DM2 DM3 DML MOH Total
6b. ending inventories budget
Q cost/unit total DM: FG: total ending inv
7. COGS budget
beg FG inv DM used DML
MOH COGM COGAS -end FG inv COGS
8. nonmanufacturing costs budget
VC: FC: TC
9. budgeted INCOME STATEMENT
rev -cogs gross margin -operating costs: operating income
10. budgeted BALANCE SHEET
ASSETS: LIABILITIES:
STOCKHOLDERS' EQUITY: TA TL&SHE
Asistensi-3Master Budget and Responsibility Accounting
Problem 1 Master BudgetRoyal Company is preparing budgets for the second quarter ending June 30. • Budgeted sales of the company’s only product for the next five months are:
April............. 20,000 units
May............. 50,000 unitsJune............. 30,000 unitsJuly.............. 25,000 unitsAugust......... 15,000 units
• The selling price is $10 per unit.
Additional data:
• The company desires to have inventory on hand at the end of each month equal to 20% of the following month’s budgeted unit sales.
• On March 31, 4,000 units were on hand.
• 5 pounds of material are required per unit of product.
• Management desires to have materials on hand at the end of each month equal to 10% of the following month’s production needs.
• The beginning materials inventory was 13,000 pounds.
• The material costs $0.40 per pound.
• Each unit produced requires 0.05 hour of direct labor.
• Each hour of direct labor costs the company $10.
• Management fully adjusts the workforce to the workload each month.
• Variable manufacturing overhead is $20 per direct labor-hour.
• Fixed manufacturing overhead is $50,500 per month. This includes $20,500 in depreciation, which is not a cash outflow.
• Royal Company uses absorption costing in its budgeted income statement and balance sheet.
• Manufacturing overhead is applied to units of product on the basis of direct labor-hours.
• The company has no work in process inventories.
• Variable selling and administrative expenses are $0.50 per unit sold.
• Fixed selling and administrative expenses are $70,000 per month and include $10,000 in depreciation.
Required:
1. Sales budget.
2. Production budget.
3. Direct materials budget.
4. Direct labor budget.
5. Manufacturing overhead budget.
6. Ending finished goods inventory budget.
7. Selling and administrative expense budget.
Problem 2 Master Budget (Mid-Term Examination, 27th March 2012)
PT. ABC is a local t-shirt manufacturer. In 2012 management projected that they can sell 8000 units of various types t-shirt. Data required to develop this year’s budget is as follows:
a. Finished goods inventory on January 1 is 100 units, each costing Rp15.000.
Management planned to maintain its current level of finished goods inventory at theend of 2012.
b. Inputs include the following :Price Quantity Inventory at Jan 1
Fabric Rp 10.000 per meter 1 meter per shirt 75 meter at Rp9.000Dye Rp 1.000 per ounce 3 ounces per shirt 100 ounces at Rp750Labor Rp 10.000 per DLH 0.25 DLH per shirt
c. Overhead costs for 2012 are estimated for fixed and variable components: (measuredin direct labor hour (DLH)). Overhead are allocated to finish product using directlabor hour as the cost allocation base.
Fixed Cost Component Variable Cost ComponentSupplies - Rp 500Power - Rp 1.000Maintenance Rp 20.000.000 -Supervision Rp 60.000.000 -Depreciation Rp 75.000.000 -Other Rp 15.000.000 -
Required :Prepare a partial annual operating budget for the year 2012 :
(1) Production Budget (2) Direct Material Usage Budget (3) Direct Labor Cost Budget (4) Manufacturing Overhead Cost Budget (5) Cost of Goods Sold Budget
Problem 3: Cash Budget (Mid-Term Examination, 27th March 2012)
Champion Hardware is a hardware wholesaler. All sales are credit sales with the term of payment 5/10, n/end of month. Information about the store’s operation follows:
• December 2011 sales amounted to $500.000 • Sales are budgeted at $540.000 for January 2012 and $500.000 for February 2012 • Collection are expected to be 30% in the month of sale within the discount period, 30% also
in month of sale but after the discount period, and 38% in the month following the sale. Two percent of sales are expected to uncollectible. Bad debt expense is recognized monthly.
• Cost of goods sold is 75% of sales. • A total of 70% of the merchandise for resale is purchased in the month prior to the month
of the sale, and 30% is purchased in the month of the sale. Payment for merchandise is made in the month following the purchase. The company always take the benefit of 2% discount offered by the supplier for payment before the 10th of the month.
• Annual operating expenses for 2012 is budgeted for $1.600.000. From this amount $1.000.000 is fixed cost which include $200.000 depreciation expense. The remaining operating expense is considered variable. All operating expense will be paid as incurred. The budgeted annual operating expenses is based on the expected annual sales $6.000.000
The company’s balance sheet of December 31,2011 is as follows :
Champion Hardware Inc.
Balance Sheet
December 31, 2011
Assets
Cash $ 44.000
Account Receivable (net $75.000 allowance for uncollectible accounts) $ 190.000
Inventory $ 280.000
Property and Equipment (net of $1.180.000 accumulated depreciation) $ 1.724.000
Total Assets $ 2.238.000
Liabilities and Stockholder’s Equity
Account Payable $ 324.000
Common Stock $ 1.590.000
Retained Earning $ 324.000
Total Liabilities and Stockholder’s Equity $ 2.238.000
Required :
1. Prepare a cash budget for January 2012 in detail (show your computation) to show the expected cash balance at the end of January 2012.
2. Suppose you are preparing a budgeted balance sheet as of January 31, 2012. Please show the balance for the following account :
a. Cash b. Account Receivable c. Account Payable
If the company has minimum cash balance policy of $40.000, how this will affect your answer.
Asistensi-4
Flexible Budgets, Variances, and Management Control 1
Problem 1 :
Connor Company’s budgeted prices for direct materials, direct manufacturing labor, and direct marketing (distribution) labor per attaché case are $40, $8, and $12, respectively. The president is pleased with the following performance report:
Actual Costs Static Budget VarianceDirect materials $364,000 $400,000 $36,000 FDirect manufacturing labor 78,000 80,000 2,000 FDirect marketing (distribution) labor 110,000 120,000 10,000 F
Actual output was 8,800 attaché cases. Assume all three direct-cost items shown are variable costs. Is the president’s pleasure justified? Prepare a revised performance report that uses a flexible budget and a static budget.
Problem 2 : Bank Management Printers, Inc., produces luxury checkbooks with three checks and stubs per page. Each checkbook is designed for an individual customer and is ordered through the customer’s bank. The company’s operating budget for September 2012 included these data:Number of checkbooks 15,000Selling price per book $ 20Variable cost per book $ 8Fixed costs for the month $145,000Number of checkbooks produced and sold 12,000Average selling price per book $ 21Variable cost per book $ 7Fixed costs for the month $150,000
The executive vice president of the company observed that the operating income for September was much lower than anticipated, despite a higher-than-budgeted selling price and a lower-than-budgeted variable cost per unit. As the company’s management accountant, you have been asked to provide explanations forthe disappointing September results.
Bank Management develops its flexible budget on the basis of budgeted per-output-unit revenue and per-output-unit variable costs without detailed analysis of budgeted inputs.
1. Prepare a static-budget-based variance analysis of the September performance. qu2. Prepare a flexible-budget-based variance analysis of the September performance.3. Why might Bank Management find the flexible-budget-based variance analysis more
informative than the static-budget-based variance analysis? Explain your answer.
Problem 3 : Market-Share and Market-Size Variances. Rhaden Company produces sweat-resistant headbands for joggers. Information pertaining to Rhaden’s operations for May 2011 follows:
Actual Budget
Units sold 230,550 220,000
Sales revenue $3,412,140 $3,300,000
Variable cost ratio 68% 64%
Market size in units 4,350,000 4,400,000
1. Compute the sales volume variance for May 2011.2. Compute the market-share and market-size variances for May 2011.3. Comment on possible reasons for the variances you computed in requirement 2.
Problem 4PT Alam Sejahtera is a manufacturing company in the snack industry. Earlier in 2013, the management decided to introduce a new product called Kacang Premium, an assortment of nuts in a pack, and it will be manufactured in the Karawang Barat Plant. As its name suggests, Kacang Premium uses only the best ingredients and is seasoned with a secret ingredient. Kacang Premium will be sold in packs of 150 grams, and made in batches. The Product Development Manager has proposed that a batch of Kacang Premium (consisting of 200 packs) consists of ingredients as below:Ingredient Quantity per batch Price of input
Pistachio 100 boxes Rp 50.000 per box
Walnut 80 boxes Rp 35.000 per box
Macadamia 120 boxes Rp 25.000 per box
Secret Seasoning 20 boxes Rp 70.000 per box
During the second quarter of 2013, the Production Manager of PT Alam Sejahtera reported that Karawang Barat Plant has manufactured 150 batches of Kacang Premium, and it has been distributed in several upscale supermarkets in Jabodetabek. The quantity of inputs and price of inputs are reported as below.Ingredients Actual Quantity Actual Cost Actual Mix
Pistachio 16.640 boxes Rp 856.960.000 32,5%
Walnut 11.520 boxes Rp 402.048.000 22,5%
Macadamia 19.968 boxes Rp 539.136.000 39%
Secret Seasoning 3.072 boxes Rp 192.000.000 6%
Total Actual 51.200 boxes Rp 1.990.144.000 100%
1. What is the budgeted cost of direct materials for the 30.000 packs?2. Calculate the total direct materials efficiency variance.3. Calculate the total direct materials mix and yield variances. What are these variances telling you about the 30.000 packs produced this quarter? Are the variances large enough to investigate?
Problem 5Bapak Aria employs three workers in his doll making workshop. The first worker is Ibu Setya and she has been making dolls for 25 years. She is paid Rp 150.000 per hour. The second worker is Ibu Laras, and is paid Rp 100.000 per hour. The third worker is Ibu Ditha, and is paid Rp 95.000 per hour. According to the statistic, one doll is made in 6 hours and budgeted as follows:
Quantity Price per hour of labor Cost of one doll
Ibu Setya 2 hours Rp 50.000,- Rp 100.000,-
Ibu Laras 3 hours Rp 30.000,- Rp 90.000,-
Ibu Ditha 1 hours Rp 25.000,- Rp 25.000,-
Each doll is budgeted to be made with 6 hours of direct labor, comprising of 33,33% of Ibu Setya’s labor, 50% of Ibu Laras’ labor, and 16,67% of Ibu Ditha’s labor. However, sometimes the three workers may work more or less hours than budgeted with no reduction in quality of dolls made.In the month of December, Bapak Aria’s workshop created and sold 180 dolls. Actual direct labor costs are as follows:Ibu Setya (342 hours) Rp 17.100.000,-
Ibu Laras (540 hours) Rp 16.200.000,-
Ibu Ditha (225 hours) Rp 5.625.000,-
Total actual direct labor cost Rp 38.925.000,-
1. What is the budgeted cost of direct labor for 180 dolls?2. Calculate the total direct labor price and efficiency variance.3. For 180 dolls, what is the total actual amount of DL used? What is the actual DL input mix percentage? What is the budgeted amount of the three Ibu’s labor that should have been used for the 180 dolls?4. Calculate the total direct labor mix and yield variances.
Asistensi-5
Flexible Budgets, Variances, and Management Control 2
Problem 1: Activity-based costing, batch-level variance analysis.
Jo Nathan Publishing Company specializes in printing specialty textbooks for a small but profitable
college market. Due to the high setup costs for each batch printed, Jo Nathan holds the book
requests until demand for a book is approximately 500. At that point Jo Nathan will schedule the
setup and production of the book. For rush orders, Jo Nathan will produce smaller batches for an
additional charge of $400 per setup. Budgeted and actual costs for the printing process for 2012
were as follows:
Static-Budget Amounts Actual Results
Number of books produced 300,000 324,000
Average number of books per setup 500 480
Hours to set up printers 8 hours 8.2 hours
Direct variable cost per setup-hour $40 $39
Total fixed setup overhead costs $105,600 $119,000
1. What is the static budget number of setups for 2012?
2. What is the flexible budget number of setups for 2012?
3. What is the actual number of setups in 2012?
4. Assuming fixed setup overhead costs are allocated using setup-hours, what is the predetermined
fixed setup overhead allocation rate?
5. Does Jo Nathan’s charge of $400 cover the budgeted direct variable cost of an order? The
budgeted total cost?
6. For direct variable setup costs, compute the price and efficiency variances.
7. For fixed setup overhead costs, compute the spending and the production-volume variances.
8. What qualitative factors should Jo Nathan consider before accepting or rejecting a special order?
Problem 2: Direct Manufacturing Labor and Variable Manufacturing Overhead Variances.
Sarah Beth’s Art Supply Company produces various types of paints. Actual direct manufacturing labor hours in the factory that produces paint have been higher than budgeted hours for the last few months and the owner, Sarah B. Jones, is concerned about the effect this has had on the company’s cost overruns. Because variable manufacturing overhead is allocated to units produced using direct manufacturing labor hours, Sarah feels that the mismanagement of labor will have a two fold effect on company profitability. Following are the relevant budgeted and actual results for the second quarter of 2011.
Budget Information Actual Results
Paint Set Production 25.000 29.000
Direct manufacturing Labor Hours per Paint Set 2 Hours 2,3 Hours
Direct manufacturing Labor rate $ 10/Hours $ 10,4/Hours
Variable manufacturing overhead rate $ 20/Hours $ 18,95/Hours
Required
1. Calculate the direct manufacturing labor price and efficiency variances and indicate whether each is favorable (F) or unfavorable (U).
2. Calculate the variable manufacturing overhead spending and efficiency variances and indicate whether each is favorable (F) or unfavorable (U).
3. For both direct manufacturing labor and variable manufacturing overhead, do the price/spending variances help Sarah explain the efficiency variances?
4. Is Sarah correct in her assertion that the mismanagement of labor has a twofold effect on cost over-runs? Why might the variable manufacturing overhead efficiency variance not be an accurate repre-sentation of the effect of labor overruns on variable manufacturing overhead costs?
Problem 3: Flexible Budgets, Direct-Cost Variances, and Overhead-Cost Variances (UTS 2012/2013)
The following information is provided to assist you in evaluating the performance of Odysius, Inc. :
Actual Cost:
Direct Material Purchased and Used $ 188,700 (102,000 pounds)
Direct Labor $ 140,000 (10,700 hours)
Manufacturing Overhead $ 204,000 (61% is variable)
Standard Cost per Unit:
Direct Material $ 1.65x5 pounds per unit output
Direct Labor $ 14.00 per hour x 0.5 hour/unit
Variabel Overhead $ 11.90 per direct-labor hour
Production Budget:
Direct Material $ 165,000
Direct Labor $ 140,000
Manufacturing Labor $ 199,000
Variable overhead is applied on the bases of direct – labor hours. The company’s actual production
and sales was 21,000 units, which was 17,5% market share. Average selling price was $ 38. The
company expected to get 20% market share. The exacted market for this product is 100.000 units.
Its selling price is budgeted at $ 40.
Required :
Prepare a complete various report and analysis consists of :
a. Variable-overhead spending&efficiency variances
b. Fixed-overhead spending & production volume variances
c. Sales price variance
d. Sales volume variance
e. Sales quantity variance
f. Market Share and Market Size Variance
g. The flexible budget variance
Asistensi-6
Revenues, Sales Variances, and Customer-Profitability Analysis
Problem 1PT Buana Sentosa makes a component for branded LED TVs called X27-A6. This component is manufactured upon order from the manufacturer of the TV, so PT Buana Sentosa keeps no inventory. The list price is Rp 750.000,-, but manufacturer of the TV often receives discount of 5% if it order large enough. The component is packed in a box that contains 100 pieces of X27-A6. If the order is not in a multiplier of 100, it is put in a single box (i.e. 245 pieces is packed in 3 boxes). To retain its relationship with the customer, it uses a policy that accepts free exchange of defective units within 10 days of delivery.According to the data, a unit of X27-A6 costs Rp 250.000,-, and the details of customer level costs are as follows:Order taking Rp 1.250.000,- per orderProduct handling Rp 750.000,- per boxWarehousing Rp 450.000,- per dayRush order processing Rp 7.000.000,- per rush orderExchange and repair Rp 350.000,- per unit
As being detailed below, four biggest customers of PT Buana Sentosa during 2013 are as follows:LG Samsung Sony Toshiba
No. Of units purchased
15.000 19.500 16.500 8.500
Discounts given 10% 10% 10% 0
No. Of orders 40 23 27 65
No. Of boxes 150 195 165 85
Days in warehouse
30 22 5 55
No. Of rush orders
10 21 11 6
No. Of units exchanged
30 0 2 15
1. Calculate the customer level operating income for these four customers. Prepare a customer profitability analysis by ranking the customer from most to least profitable.2. Does PT Buana Sentosa have unprofitable customers?
Problem 2: (Adapted from UTS 2011-2012)VITALIFE is a local distributor of herbal medicine products. With the growing competitiveness in the industry, VITALIFE’s new controller, Budi Black, wants to use ABC system instead of traditional costing to examine individual customer profitability within each distribution market. He identified there are five activities related with customer cost: order processing, line item ordering, store deliveries, carton deliveries, and shelf-stocking. He focuses first on Blue Green Co. Single store distribution market. Four customers are used to exemplify the insight availability with the ABC approach. For the February 2012, he listed the following data for those selected customers:
Anabelle Britannia Chandelier Dakar Drug Store
Pharmacy Apothecary Pharmacy
Avg. Revenue per delivery
Rp 5.500.000,- Rp 4.750.000,- Rp 5.200.000,- Rp 5.500.000,-
Avg. Cost of Goods Sold per delivery
Rp 3.500.000,- Rp 2.135.000,- Rp 4.520.000,- Rp 4.210.000,-
Total orders 12 14 15 9
Avg. Line items per order
8 10 5 17
Total store deliveries
10 7 3 14
Avg. Cartons shipped per store delivery
15 22 13 16
Avg. Hours of shelf stocking per store delivery
4 2 0 2
He also collects the following information related with customer’s cost activities:Activity Area Cost Driver Rate in 2012
Order Processing Rp 150.000,- per order
Line Item Ordering Rp 14.000,- per line item
Store Deliveries Rp 125.000,- per store delivery
Carton Deliveries Rp 4.000,- per carton
Shelf Stocking Rp 75.000,- per stocking hour
Required:1. Compute customer level operating income using ABC approach for those selected customers.2. Based on the above calculations, what opinion should Budi Black consider with regard to those selected individual customers