AbsVarCost_Pract_Wachovia_Ques

4 marks prepare a brief schedule calculating the

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Unformatted text preview: ears side by side. (4 Marks) Prepare a brief schedule calculating the variable and fixed manufacturing cost per unit for the three years ended 31 March 2009 to 2011. Place the three years side by side. (4 Marks) 4. The marketing director continues “As you all know it’s been a very tough environment since the financial crisis in 2009. Every division has had to maintain sales prices, fixed and variable production costs at the same level for the past three years. Despite this you can see that under Eric’s leadership the division increased its sales. I’m not an accountant so I can’t tell you how but he has really worked some magic with efficiencies in the production department because the per unit cost of manufacture in these income statements seems to have decreased. What more can I say! He’s the man for the job.” Bill Peters, the financial director, of Wachovia is a little more sceptical. “Every division in the group prepares income statements like this so I don’t think there is anything wrong with these figures but somehow its making his performance look better than it actually is. I was at university a long time ago but sort of vaguely remember another way of presenting the income statement.” Question and solution by CCSmith 2013 2010 R200...
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This document was uploaded on 04/05/2014.

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