You are the financial controller of a large manufacturing organization and intend to approach the human resources (HR) manager seeking to create two new positions: a financial accountant and a management accountant.
1 Prepare a briefing document for the HR manager which explains the differences between these two roles.
2 Formulate (and answer) the five likely questions that you anticipate the HR manager will ask you about these two positions when you meet.
Question 2: Product cost classification: manufacturer
Service department costs1 $ 50 000
Direct labour: wages 242 500
Direct labour: on-costs 47 500
Indirect labour: on-costs 15 000
On-costs for production supervisor 4 500
Administrative costs 75 000
Rental of office space for sales personnel2 7 500
Sales commissions 2 500
Product promotion costs 5 000
Direct material 1 050 000
Advertising expense 49 500
Depreciation on factory building 57 500
Cost of finished goods inventory at year end 57 500
Indirect labour: wages 70 000
Production supervisor's salary 22 500
Total overtime premiums paid 27 500
Cost of idle time: production employees3 20 000
Calculate each of the following costs for the year:
1 Total prime costs.
2 Total manufacturing overhead costs.
3 Total conversion costs.
4 Total product costs (for external reporting purposes).
5 Total period costs.
HappyDaze T-shirts manufactures and prints customised designs on T-shirts. Below is a list of some of their major costs.
(a) Cost of daily radio advertising on the local community radio station.
(b) Cost of the fabric used to make the T-shirts.
(c) Cost of the ink used in the designs.
(d) Salary of the managing director.
(e) Wages of the production employees who sew and print the T-shirts.
(f) Cost of movie tickets provided for the Employee of the Month award each month.
(g) Depreciation of the sewing machines, calculated on a units of production basis.
(h) Cost of electricity used in the factory building.
(i) Rent of the building.
(j) Wages of the staff who package the T-shirts.
(k) Cost of sewing machine maintenance.
(l) Cost of the new advertising sign at the front of the factory.
(m) Cost of the company car used by the managing director.
For each cost:
1 Indicate whether it is fixed or variable.
2 If the cost is variable, indicate whether it is an engineered cost. Explain why.
3 If the cost is fixed, indicate whether it is committed or discretionary. Explain why.