Case Study Jumping Flash Pty Ltd is an innovative organisation that produces environmentally friendly pumps for water management. The design of this pump is unique and represents an efficient and environmentally friendly system that may be used on any mine site. These pumps combine positive features of economy, efficiency and innovation. The company has just completed its second year of operations. You are now employed as the management accountant for Jumping Flash Pty Ltd and you have been requested to produce a performance report (using Excel) and the calculate all the relevant variances. Information The following details are available: 1. SALES AND SALES REVENUE Jumping Flash Pty Ltd Units and revenue details for the period 01 July - 30 September 2018 Sales (units) Sales revenue Actual Master (Fixed) Budget 16,500 15,000 $ $ 5,362,500 5,250,000 Note: Both these production levels are within the relevant range. 2. STANDARD COST DETAILS Jumping Flash Pty Ltd Standard cost schedule - Manufacturing costs Per unit Usage Direct material 7 kilos Per unit Rate $5 per kilo Per unit $ 35.00 Direct labour 8 hours $10 per hour 80.00 Variable manufacturing overhead 8 hours $2 per hour 16.00 Fixed manufacturing overhead 8 hours $4 per hour 32.00

Your manager has asked you to advise your client Kofi Gyato, owner and director of Kofi Gyato Limited, on the implications of the proposed transaction.Your client has identified an opportunity to develop his business by manufacturing the products which he sells. To do this he would need to buy a machine which will have an expected life of ten years. He has received this quotation for the machine.GHȼPrice of machine70,000Delivery and installation3,500Commissioning costs1,500Annual maintenance costs3,500Required:Prepare a report to your client. Your report should:(a) Explain the difference between capital and revenue expenditure, and how each type of expenditure affects the accounts of a business.(b) Indicate which of the costs of the machine should be considered as capital cost and which should be considered as revenue cost.(c) Define depreciation and explain how the accounting entries for depreciation affect each element of the accounting equation.(d) Indicate:(i) What the annual…

Current Designs faces a number of important decisions that require incremental analysis. Current Designs is always working to identify ways to increase efficiency while becoming more environmentally conscious. During a recent brainstorming session, one employee suggested to Diane Buswell, controller, that the company should consider replacing the current rotomold oven as a way to realize savings from reduced energy consumption. The oven operates on natural gas, using 17,000 therms of natural gas for an entire year. A new, energy-efficient rotomold oven would operate on 15,000 therms of natural gas for an entire year. After seeking out price quotes from a few suppliers, Diane determined that it would cost approximately $250,000 to purchase a new, energy-efficient rotomold oven. She determines that the expected useful life of the new oven would be 10 years, and it would have no salvage value at the end of its useful life. Current Designs would be able to sell the current oven today for…

An industrial engineer proposed the purchaseof RFID Fixed-Asset Tracking System for the company’s warehouse and weave rooms. The engineerfelt that the purchase would provide a better systemof locating cartons in the warehouse by recording thelocations of the cartons and storing the data in thecomputer. The estimated investment, annual operating and maintenance costs, and expected annual savings are as follows.• Cost of equipment and installation: $85,500• Project life: 6 years• Expected salvage value: $5,000• Investment in working capital (fully recoverable atthe end of the project life): $15,000• Expected annual savings on labor and materials:$65,800• Expected annual expenses: $9,150• Depreciation method: five-year MACRSThe firm’s marginal tax rate is 35%.(a) Determine the net after-tax cash flows over theproject life.(b) Compute the IRR for this investment.(c) At MARR = 18%, is the project acceptable?