Material prices influence Research Paper Example | Topics and Well Written Essays - 3000 words

Material prices influence - Research Paper Example Question 2 a) Monthly profit position for each of L Ltd and M Ltd if the sales of L Ltd : i. at their present level Particulars M L Selling prices 9 20 Sales in litres 750000 250000 Sales in drums 30000 10000 Total sales 270000 200000 Raw materials - 9 Other cost 5 3 Total VC for a month 150000 120000 Fixed costs 60000 40000 total cost 210000 160000 Profit 60000 40000 Assumptions 1. 1 drum = 25 litres 2. Current production capacity of L ltd if 1000 kilolitres p.m 3. Current production level of L ltd is 75% 4. Production and sales are same, no stock in hand (ii) at their higher potential level indicated by the market research, subject to a cut in price of 20%. Particulars M L Selling prices 9 16 Sales in litres 750000 450000 Sales in drums 30000 18000 Total sales 270000 288000 Raw materials - 9 Other cost 5 3 Total VC for a month 150000 216000 Fixed costs 60000 40000 Total cost 210000 256000 Profit 60000 32000 b) i. Difficulties when the market prices are used as transfer price produces underthe conditions outlined in (a) (ii) above. When the market prices are used as the transfer prices, it is disadvantageous for L ltd. This is because, it is planning to reduce its selling price by 20%, thereby increasing its sales by 80%. If this reduction in selling prices happens, then the profits enjoyed by L Ltd decreases even though there is an increase in sales by 80 %. The raw material prices are same for L ltd. There is no decrease in the raw materials which is purchased from M Ltd. As the production increases for L ltd, the raw material consumption also increases and which should bring down the raw materials cost down. The raw materials cost charged by M ltd, is based on the market price and hence, it does not benefit L Ltd. (ii) Factors to be...This is because, it is planning to reduce its selling price by 20%, thereby increasing its sales by 80%. If this reduction in selling prices happens, then the profits enjoyed by L Ltd decreases even though there is an increase in sales by 80 %. The raw material prices are same for L ltd. There is no decrease in the raw materials which is purchased from M Ltd. As the production increases for L ltd, the raw material consumption also increases and which should bring down the raw materials cost down. The raw materials cost charged by M ltd, is based on the market price and hence, it does not benefit L Ltd. As an accountant, I would consider the dual approach to fix the transfer prices. M ltd is currently selling for two parties, one L Ltd and other external parties. For L Ltd, the transfer price can be based on full cost approach and for the external customers, it can be based on the market prices. The actual cost of production should be estimated, including the research and development cost and other costs that are traceable to the division. A full cost absorption approach can be adopted to overcome these kind of problems.

Food Properties Assignment Example | Topics and Well Written Essays - 2750 words

Food Properties - Assignment Example However, even though the baking chefs love their gluten products, physicians are of the opinion that one needs to avoid gluten products. The reason being the adverse health effects the gluten has on human health. This projects aims to compare the characteristics and sensory evaluation of each bread product and discuss about the advantages and drawbacks of the final products. For the purpose of this project breads will be made using different types of flour- chestnut flour, white rice flour and wheat flour using different proportions of each in the recipes. Gluten is a protein that has a potential of causing health problems. Celiac diseases are a disease of the immune system and intake of gluten initiates an immunological response which leads to damage of the stomach lining (A.D.A.M. Medical Dictionary, 2014). Gluten is also a well known allergen (Guandalini,2007) and it has been seen that children exposed to gluten at an early end become increasingly susceptible to celiac diseases. Chestnut flour is today used as a healthier alternative to other gluten-containing flours. Chestnut flour is derived by grinding dried chestnuts. It has a grayish appearance and a sweet flavor. Chestnuts being low in both calories and fat content are used as an healthier component in many recipes. Chestnut flour is gluten-free flour which means that the breads and other products that are prepared from this flour do not rise and therefore are dislike by many. The spongy texture of bread is lost owing to the absence of gluten which is primarily responsible for making the bread rise. However, this flour has nutritional and health benefits. Firstly, being low in fat content it is much healthier than common flour. Chestnut flour addition to any flour increases fiber and ash content (Jozinovic et al,2012,p26). Chest nut flour contains a large amount of vitamins