Cost and Management Accounting

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UNIVERSITY OF OTAGO EXAMINATIONS 2011 ACCOUNTANCY AND FINANCE ACCT 222 Cost and Management Accounting Semester 2, 2011 (TIME ALLOWED: 3 HOURS) This examination paper comprises 6 pages Candidates should answer questions as follows: All questions should be answered. Show all major workings for your numerical calculations. The examination will be marked out of 100 marks. Question 1: 60 marks Question 2: 11 marks Question 3: 14 marks Question 4: 15 marks The following material is provided: Nil Use of calculators: Only calculators on the University of Otago list of approved calculators are permitted. (Subject to inspection by the examiners) Candidates are permitted copies of: One A4 (or smaller) sheet of paper that is…show more content…
We used up about one-fifth of it last year. Dyer’s figure of $178,360 for materials probably includes about $51,000 for GHL. But it’ll be tricky stuff to handle if we don’t use it up. We bought it for $1,275 a ton, and you couldn’t buy it today for less than $1,450 a ton. But if you sold it, you’d only get around $1,200 a ton, but then there would be all the handling expenses-probably about $100 a ton.” Walsh thought that Dyer ought to be present during this discussion. He called her in and put Duffy’s points to her. “I don’t much like all the conjecture,” Dyer said. “I think my figures are pretty conclusive. Besides, if we are going to have all this talk about ‘what will happen if,’ don’t forget the problem of space we’re faced with. We’re paying $21,840 a year in rent for warehouse space a couple of miles away. If we closed Duffy’s department, we’d have all the storage space we need without renting.” “That’s a good point,” said Walsh, “but I’m a bit worried about the workers if we close the department. I don’t think we can find room for any of them elsewhere in the firm. I could see whether Packages can take any of them. But some of them are getting on. There are Walters and Hines, for example. They’ve been with us since they left school 40 years ago. I’d feel bound to give them a small pension - $4,000 a year each, say.” Duffy showed some relief at this. “But I still don’t like Dyer’s figures,” he said.
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