Logistics Economics

Logistics Economics Workshop 3 - Accounts costs budgets.doc 1 You will be organised into teams. Each member chooses one of the tasks. All tasks need to be completed by the team Workshop 3 – Basic accounts, cost behaviour & budgets Task 1 Use a logistics, supply chain or IT example to critically compare the difference between fixed, variable, direct and indirect costs. Task 2 A fuel depot has two operatives working varied hours with different rates of pay. The company pays 12% NI and 3% pension contributions. Use the following information to calculate direct labour cost. Operative Hours £/hour 1 8 9.00 2 12 6.00 Task 3 XYZ Logistics Ltd uses 10,000 litres of fuel a month although this varies widely. The following are extracts from the overhead statement for the transport department showing the make-up of the budget and actual for March. Budget for fuel Actual fuel for March 10,000 litres 11,500 Litres Indirect Labour £ £ (i) Fixed 9,000 10,000 (ii) Variable 11,000 11,600 Consumable (variable) 16,000 15,250 Variable overheads 21,000 19,200 Fixed overheads 21,000 22,000 Show two budgetary control statements for March, (a) One based on the fixed budget for 10,000 litres, and (b) One based on a flexible budget for the actual usage. M22AAE Logistics Economics Workshop 3 - Accounts costs budgets.doc 2 Deliverables: Using flipchart paper or slides/word processor for the reflection and list: ? Your answers to each of the tasks ? Any assumptions you have made ? Justify your responses with referenced evidence Groups should expect their findings and outputs to be peer reviewed at least once by the end of the semester Hints & tips: Let’s keep it simple. For the purposes of this exercise, if you find that you are getting into lengthy discussions on certain points, please use an “Assumptions parking lot” PHOTOGRAPH OR SCAN YOUR FINAL NOTES, OR INPUT TO A WORD PROCESSING DOCUMENT AND POST IT IN THE WORKSHOP AREA ON MOODLE DO NOT FORGET TO INCLUDE YOUR GROUP MEMBER’S NAMES ON YOUR CONTENT! RECORD YOUR FINDINGS FROM THIS ACTIVITY IN THE WORKSHOP AREA IN MOODLE