CPA MA Exam With Confidence Using Practice Dumps

The directors of Sec Co are carrying out an impairment review of the company’s non-current assets for the financial statements for the year to 31 October 2010. They have the following information about a particular asset:

Carrying amount (at 1 November 2009)$380,000

Depreciation charge for year to 31 October 2010$76,000

Market value$285,000

Expected costs of selling$20,000

Value in use$250,000

What carrying value should be included in the statement of financial position at 31 October 2010?

Bush has been asked by his bank to produce a budgeted income statement for the six months ending on 31 March 2014. He forecasts that monthly sales will be $3,000 for October, $4,500 for each of November and December, 2013 and $5,000 per month from January 2014 onwards.

Selling price is fixed to generate a margin on sales of 33.33%.

Overhead expenses (excluding depreciation) are estimated at $800 per month. He plans to purchase non-current assets on 1st October costing $5,000, which will be paid for at the end of December and are expected to have a five-year life, at the end of which they will possess a nil residual value.

The budgeted net profit for the six months ending 31 March 2014 is:

Hera Co is developing a new product using a target costing approach. The initial assumption was that a sales volume of 200,000 units could be achieved at a selling price of $25 per unit.

However, market research indicates that to achieve the sales volume of 200,000 units, the selling price should be $23·50.

Hera wishes to obtain an average profit margin of 20% on sales.

The following data have been estimated for the product:

Direct material$10·45 per unit

Hourly production volume20 units

Directlaborcost$64 per hour

Variable overheads$82 per hour (absorbed on a directlaborhour basis)

Fixed costs to produce 200,000 units are estimated to be $680,000.

What reduction in the cost per unit is required in order to achieve the target cost per unit?