### How JustAnswer Works:

• Ask an Expert
• Get a Professional Answer
• 100% Satisfaction Guarantee

## Ask F. Naz Your Own Question

F. Naz, Chartered Accountant
Category: Homework
Satisfied Customers: 5158
Experience:  Experience with chartered accountancy
20040807
Type Your Homework Question Here...
F. Naz is online now

# Ra-ja

### Resolved Question:

Need answers today to 6, 7 and 8

Submitted: 3 years ago.
Category: Homework
Expert:  F. Naz replied 3 years ago.
Have a nice day. Having problem in attaching file here therefore I am pasting the solution here, thanks.

6. As the fixed costs are related to A and B is not related to C and D therefore they should be calculated separately as follow.

 Fixed A and B C and D Cost 20000 25000 Hours 7000 5000 rate per hour 2.857143 5

After its allocation no product is generating less than 25% mark on therefore they all can be produced, the profitability is given below.

 A B C D Selling price 98 38.5 59.5 49 Material 15 5 10 5 Labor 30 5 15 10 Variable 15 7.5 5 7.5 17.14286 2.857143 15 6 Total cost 77.14286 20.35714 45 28.5 Profit 20.85714 18.14286 14.5 20.5 Mark on 27.04% 89.12% 32.22% 71.93%

It would be better to use the variable costing approach for decision making and the contribution margin for each product should be calculated for each product based only on variable cost, not the fixed cost.

7 The profitability calculated on the basis of allocation of total fixed and variable overhead over labor hours is not justified as the fixed cost of each group of products is not related to each other.

Moreover the cost allocated on the basis of 40% for all products is also not justifiable as it will not represent the actual cost of each product being incurred.

If the profitability is determined after dropping product A, the cost allocation will not be realistic as all overheads are allocated on the basis of direct labor hours, but in this scenario, the fixed cost portion of product C and D is not related to product B therefore it s also not justifiable.

Only the allocation mentioned in number 6 is near to accuracy and justify the situation.

8. Yes as they are not providing the justified basis of allocation of overheads, there is not problem in material and labor cost. It would be better to use variable costing approach to determine contribution margin ratio for each product. The ABC costing approach can also be considered but detail data is not given, so comments cannot be given in detail for the use of ABC costing method.

F. Naz, Chartered Accountant
Category: Homework
Satisfied Customers: 5158
Experience: Experience with chartered accountancy
F. Naz and 3 other Homework Specialists are ready to help you
Customer: replied 3 years ago.

How did you get the numbers? I don't see any of the formulas. I need you to please show me how to get the numbers or submit my answers in an excell format. I can't really do anything not nowing how to get the results. I have to show the formulas. Thanks

HXXX

Customer: replied 3 years ago.

How did you get the numbers? I don't see any of the formulas. I need you to please show me how to get the numbers or submit my answers in an excell format. I can't really do anything not nowing how to get the results. I have to show the formulas.

How did you get total costs, profit and mark on

Thanks

HBello

Expert:  F. Naz replied 3 years ago.
THIS ANSWER IS LOCKED!

You need to spend \$3 to view this post. Add Funds to your account and buy credits.

### JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

### What Customers are Saying:

• Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
< Previous | Next >
• Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
• This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
• Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
• I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin Kernersville, NC
• Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther Woodstock, NY
• Thank you so much for taking your time and knowledge to support my concerns. Not only did you answer my questions, you even took it a step further with replying with more pertinent information I needed to know. Robin Elkton, Maryland
• He answered my question promptly and gave me accurate, detailed information. If all of your experts are half as good, you have a great thing going here. Diane Dallas, TX

• ### LogicPro

#### Satisfied Customers:

4925
Expert in Java C++ C C# VB Javascript Design SQL HTML
< Last | Next >

### LogicPro

#### Satisfied Customers:

4925
Expert in Java C++ C C# VB Javascript Design SQL HTML

### Manal Elkhoshkhany

#### Satisfied Customers:

4538
More than 5000 online tutoring sessions.

### Linda_us

#### Satisfied Customers:

3138
Post Graduate Diploma in Management (MBA)

### Chris M.

#### Satisfied Customers:

2602
Master's Degree, strong math and writing skills, experience in one-on-one tutoring (college English)

### F. Naz

#### Satisfied Customers:

2126
Experience with chartered accountancy

### Bizhelp

#### Satisfied Customers:

1887
Bachelors Degree and CPA with Accounting work experience

### Seanna

#### Satisfied Customers:

1781
3,000+ satisfied customers, all topics, A+ work