Mgt402 Solution

China Toys Manufacturing Company Ltd.,

Cost of Goods Manufactured and Sold Statement.

For the period ended on 31^st Dec, 2009

Particulars	Rs.	Rs.
Direct Material
Opening Material	8000
+Material Purchased	+90000
Material Available for use	98000
-Closing Inventory	-43000
Material Consumed	55000
+Direct Labour	+35000
Prime Cost 60% of C.G.M (W-3)		90000
+FOH 30% of the Conversion (W-2)		+15000
Total Factory Cost		105000
+Opening Work in Process		+70000
Cost of Goods to be Manufactured		175000
-Closing Work in Process		-25000
Cost of Goods Manufactured		150000
+Opening Finished Goods		+50000
Cost of Goods Available forSale		200000
-Closing Finished Goods		-48800
Cost of Goods Sold (W-1)		151200

China Toys Manufacturing Company Ltd.,

Income Statement.

For the period ended on 31^st Dec, 2009

Particulars	Rs.	Rs.
Sale		218800
-Sales Return		-28000
Net Sale		216000
-Cost of Goods Sold		-151200
Gross Profit		64800
-Selling and Administration Expenses
Selling Expenses 5% of Net Sale(W-4)	10800
-Administration Expenses 8% of Net Sale (W-5)	17280	28080
Operating Profit		36720
-Financial Expenses		-600
Net Profit		36120

(W-1)

Net Sale = 218800-2800 = 216000

Net Sale = Cost of Gods Sold+ Gross Profit

216000= Cost of Goods Sold+30% of Sale

216000= Cost of Goods Sold+30% of 216000

216000= Cost of Goods Sold+64800

216000-64800 = Cost of Goods Sold

151200 = Cost of Goods Sold

(W-2) Reverse Calculation:-

Conversion Cost = Direct Labour + Factory Over Head

Conversion Cost =70%+30%

Conversion Cost =70%35000+30% of Conversion Cost

Total Conversion Cost = 35000*100/70

Total Conversion Cost 35000*100/70

Total Conversion Cost = 50000

Factory Overhead = 30%of 50000

Factory Overhead = 50000*30/100

Factory Overhead = 15000

Working.3:

Ending Finished Goods Inventory=?

Ending Finished Goods Inventory=

Cost of goods available for sale-Cost of Goods Sold

Ending Finished Goods Inventory= Rs.200,000-Rs.151,200

Ending Finished Goods Inventory=Rs.48800

Working.4:

Cost of Goods Manufactured=?

Cost of Goods Manufactured= Cost of goods available for sale-Opening Finished Goods Inventory

Cost of Goods Manufactured= Rs.200,000-Rs.50,000

Cost of Goods Manufactured= Rs.150,000

Working.5:

Prime Cost=?

In the given statement of Question there is Prime cost (60% of Cost of Goods Manufactured)

SO,

Prime Cost= Rs.150,000*60%

Prime Cost= Rs. 90,000

Working.6:

Total Current Factory Cost=?

Total Current Factory Cost=

Prime Cost +Factory Over Head Cost

Total Current Factory Cost= Rs.90,000+Rs.15,000

Total Current Factory Cost= Rs.105,000

Working.7:

Cost Of Goods to be Manufactured=?

Cost Of Goods to be Manufactured=

Total Current Factory Cost+ Opening Work in Process Inventory

Cost Of Goods to be Manufactured= Rs.105,000+Rs.70,000

Cost Of Goods to be Manufactured= Rs.175,000

Working.8:

Ending Work in Process Inventory=?

Ending Work in Process Inventory=

Cost Of Goods to be Manufactured-Cost Of Goods Manufactured

Ending Work in Process Inventory=Rs.175000-Rs.150,000

Ending Work in Process Inventory= Rs. 25,000

Working.9:

Direct Material used=?

Direct Material used= Prime Cost - Direct Labor

Direct Material used= Rs.90,000 – Rs.35,000

Direct Material used= Rs.55,000

Working.10:

Material Closing Inventory=?

Material Closing Inventory=

Material available for use – Total material used

Material Closing Inventory= Rs.98,000 – Rs55,00

Material Closing Inventory= Rs.43,000

Mgt402 Solution

China Toys Manufacturing Company Ltd.,

Cost of Goods Manufactured and Sold Statement.

For the period ended on 31^st Dec, 2009

Particulars	Rs.	Rs.
Direct Material
Opening Material	8000
+Material Purchased	+90000
Material Available for use	98000
-Closing Inventory	-43000
Material Consumed	55000
+Direct Labour	+35000
Prime Cost 60% of C.G.M (W-3)		90000
+FOH 30% of the Conversion (W-2)		+15000
Total Factory Cost		105000
+Opening Work in Process		+70000
Cost of Goods to be Manufactured		175000
-Closing Work in Process		-25000
Cost of Goods Manufactured		150000
+Opening Finished Goods		+50000
Cost of Goods Available forSale		200000
-Closing Finished Goods		-48800
Cost of Goods Sold (W-1)		151200

China Toys Manufacturing Company Ltd.,

Income Statement.

For the period ended on 31^st Dec, 2009

Particulars	Rs.	Rs.
Sale		218800
-Sales Return		-28000
Net Sale		216000
-Cost of Goods Sold		-151200
Gross Profit		64800
-Selling and Administration Expenses
Selling Expenses 5% of Net Sale(W-4)	10800
-Administration Expenses 8% of Net Sale (W-5)	17280	28080
Operating Profit		36720
-Financial Expenses		-600
Net Profit		36120

(W-1)

Net Sale = 218800-2800 = 216000

Net Sale = Cost of Gods Sold+ Gross Profit

216000= Cost of Goods Sold+30% of Sale

216000= Cost of Goods Sold+30% of 216000

216000= Cost of Goods Sold+64800

216000-64800 = Cost of Goods Sold

151200 = Cost of Goods Sold

(W-2) Reverse Calculation:-

Conversion Cost = Direct Labour + Factory Over Head

Conversion Cost =70%+30%

Conversion Cost =70%35000+30% of Conversion Cost

Total Conversion Cost = 35000*100/70

Total Conversion Cost 35000*100/70

Total Conversion Cost = 50000

Factory Overhead = 30%of 50000

Factory Overhead = 50000*30/100

Factory Overhead = 15000

Working.3:

Ending Finished Goods Inventory=?

Ending Finished Goods Inventory=

Cost of goods available for sale-Cost of Goods Sold

Ending Finished Goods Inventory= Rs.200,000-Rs.151,200

Ending Finished Goods Inventory=Rs.48800

Working.4:

Cost of Goods Manufactured=?

Cost of Goods Manufactured= Cost of goods available for sale-Opening Finished Goods Inventory

Cost of Goods Manufactured= Rs.200,000-Rs.50,000

Cost of Goods Manufactured= Rs.150,000

Working.5:

Prime Cost=?

In the given statement of Question there is Prime cost (60% of Cost of Goods Manufactured)

SO,

Prime Cost= Rs.150,000*60%

Prime Cost= Rs. 90,000

Working.6:

Total Current Factory Cost=?

Total Current Factory Cost=

Prime Cost +Factory Over Head Cost

Total Current Factory Cost= Rs.90,000+Rs.15,000

Total Current Factory Cost= Rs.105,000

Working.7:

Cost Of Goods to be Manufactured=?

Cost Of Goods to be Manufactured=

Total Current Factory Cost+ Opening Work in Process Inventory

Cost Of Goods to be Manufactured= Rs.105,000+Rs.70,000

Cost Of Goods to be Manufactured= Rs.175,000

Working.8:

Ending Work in Process Inventory=?

Ending Work in Process Inventory=

Cost Of Goods to be Manufactured-Cost Of Goods Manufactured

Ending Work in Process Inventory=Rs.175000-Rs.150,000

Ending Work in Process Inventory= Rs. 25,000

Working.9:

Direct Material used=?

Direct Material used= Prime Cost - Direct Labor

Direct Material used= Rs.90,000 – Rs.35,000

Direct Material used= Rs.55,000

Working.10:

Material Closing Inventory=?

Material Closing Inventory=

Material available for use – Total material used

Material Closing Inventory= Rs.98,000 – Rs55,00

Material Closing Inventory= Rs.43,000

Mgt401 solution

Scenario

Sitara Textile is one of the renowned textile companies in Pakistan. It has a strong supply chain network of raw material since its establishment in order to fulfill its customers demand on time. ABC Co. one of the raw material suppliers of Sitara Textile is in short financing and need Rs. 500,000 to enhance its production facility. ABC Co. requests Sitara Textile to lend the required amount for the period of 3 years. Sitara Textile agrees and guaranteed ABC Co. the loan on certain basis for the said period.

Question
Your comments require in this regard whether Sitara Textile would disclose this financial information while preparing financial statements, which will publish later? Your answer must be confined in two to three lines.

Solution idea:-

Sitara Textile will disclose the information about the loan in financial statement which is given to ABC Co. Because there is no any negetive effect of disclosing the information of debt in financial statement it will increases the assets of the Sitara Textile and which increases the financial position of the Sitara Textile. And the supply chain network of raw material will also become more strong.

Mgt401 solution

Scenario

Sitara Textile is one of the renowned textile companies in Pakistan. It has a strong supply chain network of raw material since its establishment in order to fulfill its customers demand on time. ABC Co. one of the raw material suppliers of Sitara Textile is in short financing and need Rs. 500,000 to enhance its production facility. ABC Co. requests Sitara Textile to lend the required amount for the period of 3 years. Sitara Textile agrees and guaranteed ABC Co. the loan on certain basis for the said period.

Question
Your comments require in this regard whether Sitara Textile would disclose this financial information while preparing financial statements, which will publish later? Your answer must be confined in two to three lines.

Solution idea:-

Sitara Textile will disclose the information about the loan in financial statement which is given to ABC Co. Because there is no any negetive effect of disclosing the information of debt in financial statement it will increases the assets of the Sitara Textile and which increases the financial position of the Sitara Textile. And the supply chain network of raw material will also become more strong.

Total Quality Management – MGT510 spring 2010 solution

The Ford Motor Company entered the 1980s with two years of losses totaling over $1.6 billion, and then-chairman Donald E. Petersen grew to realize that consumers were disappointed in the performance of automobiles built In the United States. He had to restore customer, satisfaction by improving quality and put the company back into overdrive by increasing productivity.

One of Petersen’s first moves was an appeal for help from quality guru W. Edwards Deming, who started by ‘focusing management attention on processes and the people involved in those processes. Next, under the banner “Quality is Job 1,” Petersen instituted an array of programs designed to increase quality and productivity by obtaining greater input from customers, employees, and suppliers. New consumer surveys, dubbed competitive new vehicle quality (CNVQ) studies are reviewed twice a month at meetings that typically involve 100 Ford people and List from four to seven hours, Consumer comments are used to tune the design and performance standards of Ford cars to better provide what customers want.

An employee involvement (El) program was designed to obtain as much input as possible from the company’s employees. In the spirit of participative management, managers and employees are now expected to share power in the workplace, solving problems jointly. Every week, more than 30 of these El warns meet to discuss new ideas for improving Ford cars. In the company’s new design for a Lincoln Town Car, over 2,600 suggestions from employees were incorporated into the final product.

From the above case study determine the following

1. How TQ organizations differs from the traditional organizations in terms of

a. Changing Relationship with Customers and Supplier 5

Answer : In traditional management, quality is defined as adherence to internal specifications and standards. Quality is defined as adherence to internal specifications and standards. Quality is measured only by the absence of defects. Inspection of people’s work by others is necessary to control defects. In TQ, quality is defined as products and services beyond present needs and expectations of customers. Innovation is required to meet and exceed customers’ needs. Traditional management places customers outside of the enterprise and within the domain of marketing and sales. TQ views everyone inside the enterprise as a customer of an internal or external supplier, and a supplier of an external or internal customer. Marketing concepts and tools can be used to assess internal customer needs and to communicate internal supplier capabilities.

b. Motivation 5

Answer : TQ organizations support the premise of workers are self-motivated, seek responsibility, and exhibit a high degree of imagination and creativity at work. TQ managers provide leadership rather than overt intervention in the processes of their subordinates, who are viewed as process managers rather than functional specialists. People are motivated to make meaningful contributions to what they believe is an important and noble cause, of value to the enterprise and society. TQ reward systems recognize individual as well as team contributions and reinforce cooperation.

c. Management and Leadership 5

Answer : Traditional management views people as interchangeable commodities, developed to meet the perceived needs of the enterprise. People are passive contributors with little autonomy-doing what they are told and nothing more. TQ views people as the enterprise’s true competitive edge. Leadership provides people with opportunities for personal growth and development. People are able to take pride and joy in learning and accomplishment, and the ability of the enterprise to succeed is enhanced. People are active contributors, valued for their creativity and intelligence. Every person is a process manager presiding over the transformation of inputs to outputs of greater value to the enterprise and to the ultimate customer. 5

2. How did Ford motors get competitive advantage on the basis of quality strategy? 5

Answer : Ford as company take the lead started by ‘focusing management attention on processes and the people involved in those processes.

Next move is “Quality is Job 1,” implement an array of programs designed to increase quality and productivity by obtaining greater input from customers, employees, and suppliers and further revised consumer surveys, dubbed Competitive new vehicle quality (CNVQ) studies are reviewed twice a month at meetings that typically involve 100 Ford people and lasted from four to seven hours, Consumer comments are used to tune the design and performance standards of Ford cars to better provide what customers want.

An employee involvement (El) program was designed to obtain as much input as possible from the company’s employees. In the spirit of participative management, managers and employees are now expected to share power in the workplace, solving problems jointly.