Question oneZMWORKS LIMITED – AN EARLY STAGE MANUFACTURING COMPANYZMWorks Limited is young furniture...

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Question oneZMWORKS LIMITED – AN EARLY STAGE MANUFACTURING COMPANYZMWorks Limited is young furniture manufacturing company. The case provides an introduction to the setting up a cost and management accounting system.‘’It is commonly suggested that a management accounting system should be capable of supplying different measures of cost for different purposes. Costs maybe classified in a variety of ways according to their nature and the information needs of management’’a). As a Cost accountant for ZMWorks you are required to set out the many types of purpose for which cost information may be required. (20 marks)b). Explain and discus this statement, illustrating with examples of classifications required for different purposes 					(44 marks)Question twoKZ Ltd had the following transactions in one of its raw materials during June 2016:Opening stock			 40 units		@ K20,000 eachJune 14		bought			140 units		@ K22,000 eachJune 15		Used			 90 units		June 15		Bought			 60 units		@ K24,000 eachJune 18		Used 			100 unitsJune 19		Bought			200 units		@ K20,000 eachJune 21		Used			 70 units			June 24		Used			 80 unitsJune 27		Bought			 50 units		@ K24,000 eachJune 30		Used			 60 unitsJuly 11		Bought			 80 units		@ K24,000 eachJuly 30		Used			 90 unitsAs a cost Accountant, you are asked toWrite up the stores ledger card (table) usingFIFO,LIFO andWeighted Average methods of stock valuation		(30 marks)State the cost of material used for each system during June;		( 6 marks)NOTES:This assignment carries 10 marks of your CA.USE page limit of 6 – 10 excluding cover page and reference page. (Use Harvard reference style)Use font size 12, times new roman and 1.5 spacingThe due date is 10th March 2017, @ 23.59hrsLate submission will attract a penalty - 5 marks deduction per dayNo assignment will be accepted after 17th March 2017 except under circumstances beyond control.

Robert · Accepted Answer

Cost information 
    Broadly speaking, cost information is mainly used by management for three 
distinct activities. They are 
i) Programming and Budgeting 
ii) Operating  -- Management control 
iii) Operating – Decision making 
Programming and Budgeting: 
     Programming can be defined as a plan of things that are done in order to 
achieve a specific result.  Obviously every management’s objective is to minimize 
cost and maximize revenue.  By costing techniques and information, the 
management has an idea about the components of costs involved, segregating into 
fixed and variable, direct and indirect, factory, administration and selling and 
distribution.  By this method, various cost factors are identified and steps are taken 
to reduce costs. 
For example, if a company is paying 10000 rent and 5000 electricity and 2500 
depreciation, then these are fixed expenses.  If no of units are increased also these 
expenses will be the same.  Hence by increasing number of units, cost per unit can 
be drastically reduced thus maximizing profit.  
Similarly factory costs are trading costs which are directly related to number of 
units.  But selling,

Question one ZMWORKS LIMITED – AN EARLY STAGE MANUFACTURING COMPANY ZMWorks Limited is young furniture manufacturing company. The case provides an introduction to the setting up a cost and management...

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