# CERVEZA Economics assingment Help With Solution

## CERVEZA Economics assingment Help With Solution

The Cerveza company produces beer crates.
The raw materials needed for this (raw material A and raw material B) are mixed in certain ratios. The paste created by this process is shaped into crates in an injection-moulding machine and then hardened.

The company uses the integral cost price calculation (Absorption Costing).

The normal capacity of the injection-moulding machine is 2,000 hours per year.
The machine’s fixed costs budgeted for 2012 are €708,000.
The machine’s capacity forecasted for 2012 is 1,500 hours.

The normal sales quantity is 600,000 beer crates per year.
The sales quantity forecasted for 2012 is 500,000 beer crates.
The budgeted sales price is €210 per item.
The fixed sales costs forecasted for 2012 are €240,000.
The forecasted variable sales costs are €0.30 per item.

The norms for producing a crate are:
• Raw material A 500 grams @ €3.60 per kg (budget for 2012)
• Raw material B 100 grams @ €3 per kg (budget for 2012)
• Proportional variable labour costs 1/30 hour @ €35.10 per hour (budget for 2012)
• Proportional variable energy costs 0.5 kWh @ €0.30 per kWh.
• Processing time of the injection-moulding machine: 1/300 machine hours

There are no other costs besides the ones mentioned above.

The actual data over 2012 are:
• The actual production was 605,000 beer crates.
• The injection-moulding machine ran 1,900 hours.
• The actual fixed costs of this machine were €725,000.
• Raw material A: 290,000 kg used, costs were €1,073,000.
• Raw material B: 62,000 kg used, costs were €182,900.
• Proportional variable labour costs: 19,400 hours, costs were €694,520.
• Proportional variable energy costs: 320,000 kWh, costs were €99,200.
• The actual sales quantity was 590,000 items.
• The turnover was €3,481,000.
• The actual fixed sales costs were €253,000.
• The actual variable sales costs were €170,000.

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ASSIGNMENT: CERVEZA

Assignment 1
a) Calculate the budgeted production and the normal production in items produced.
b) Calculate the manufacturing cost price per item and the commercial cost price per item according to the integral method (AC).

Assignment 2
a) Compile the budgeted profit & loss account according to the integral method in case of direct calculation of the result.
b) Provide an analysis as detailed as possible of the result using the analytical method.

Assignment 3
a) Compile the actual profit & loss account according to the integral method in case of direct calculation of the result.
b) Provide an analysis as detailed as possible of the result using the analytical method.

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