Group Assignment
Part- I: Discussion
1. Explain the role of the managerial accounting decision making
2. Understand the steps in decision making process
3. Understand the characteristics of relevant information.
4. Distinguish relevant costs and benefits from irrelevant costs and benefits.
5. Analyze situations that involve special decisions.
Part –II: Workout
Assume BGI Furniture Manufacturing Company during the process of budgeting for the
upcoming fiscal year, 2014. The following is information used to prepare the operating budget.
i.
The inventor able cost is Br.200/chair in a year.
ii.
Direct materials:
Timber----------------- 4 sheet /chair
Pewter ------------------- 5 Sheet /chair
iii.
Direct labor:
Assembling labor------0.15Hrs/chair
Machine labor---------2.5Hrs/chair
iv.
Inventory information in physical units for 2014.
Beginning Inventory
Target Ending Inventory
Direct materials:
Timber------------- 10,000 Sheets
15,000 Sheets
Pewter--------------- 15,000 sheets
18,000 sheets
Finished goods:
Chairs ------------- 3,000 chairs
v.
2,000 chairs
Revenue expected from sales of tables for 2014 are:
Selling price-----------Br. 280/chair
Units’ sales------------- 40,000 chair
vi.
Costs expected for 2014.
2013
Timber /sheet ------Pewter/sheet----------
2011
Br. 2.50
Br. 3.50
4.00
5.00
vii.
Assembling labor/ Hr. ---- 15.00
20.00
Machine labor/ Hr. ------- 25.00
26.00
Other budgeted costs and amounts for a year are:
 Variable non-manufacturing costs-------------
10% of sales
 Fixed non-manufacturing costs---------------- Br. 700,000
 Variable MOH costs----------------------------
Br. 5/DL Hr.
 Fixed MOH costs-------------------------------
Br. 550,000
 Prepare the operating budget using the budget information given above.