MANAGERIAL ACCOUNTING ASSIGNMENT

Q: No: 1 Salwa is considering renting a booth at a country fair. Salwa plans to sell travel
posters for $3.50 each. She can purchase the poster for $2.10 each and can return all
unsold items for a full refund. Rent for the both will cost $700.
Required:
A) Break even sales level by using equation approach and contribution margin approach.
B) Suppose the rental on the both were $ 1050 instead of $700. What is Salwa breakeven
point in units sold and dollar sales?
C) Suppose that sales price per poster is $3.85 rather than $3.50 variable expenses per unit
remains at $2.10 and fixed expenses stay at $700. What are the Salwass revised break even
sales in units and in dollars?
D) Suppose variable cost per unit is $2.38 instead of $2.10 the unit sales price remains $3.50
and fixed cost stay at $700 compute break even sales in units and dollars.
E) suppose Salwa would be context with operating income of $490 for a weeks work in the
both assuming a unit sales price of $3.50 variable expenses of $2.10 per unit and fixed
expenses of $700 how many posters must Maria sell to earn a profit of $490?
Q: NO2 Adidas Company sells T shirts for $8; management expects October sales to be
between 12000 and 20000 units, the business will incur fixed expenses of $10000 and
variable expenses of 50% of sales.
Required:
A) Use the both equation approach and contribution margin approach to compute the
companies break even monthly sales in units and in dollars.
B) Compute the monthly sales level needed to earn operating income of $14000 use either the
equation approach or contribution margin approach.

Q: NO3 Adidas sales reached 18000 units during October cost of goods sold makes up
60% of variable expenses operating expenses are the other 40% of variable expenses
and all fixed expenses.
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Required:
A) Prepare a contribution margin income statement for Adidas for the month of October.
B) Compute income from operations if sales decreases by 10%.
Q: NO4 Fateh Textile Mills incorporated the following inventories at the end of 2015:
Material. $20000
WIP$17000
Finished Goods.

$11000

During January 2015 Fateh Textile Mills completed the following transactions.
A) Purchased material on account $31000.
B) Requisitioned (placed in to production) direct material $39000.
C) Faculty payroll incurred $40000
D) Allocate factory labour as follows. Direct labour 90%, indirect labour 10%.
E) Requisitioned (placed into production) indirect material $3000.
F) incurred other factory overhead $13000(credit account purchase)
G) Applied factory overhead to production at 50% of direct labor
H) Completed production $99000.
I) sold goods on account $172000, cost of goods sold $91400
Required:
I)

Record the transactions in General Journal

Q 05 Scotch Company uses a predetermined overhead rate based on direct labor hours
to apply manufacturing overhead to jobs. At the beginning of the year, the company
estimated manufacturing overhead would be $400,000 and direct labor hours would
be 40,000. The actual figures for the year were $430,000 for manufacturing overhead
and 42,000 direct labor hours. Is manufacturing overhead underapplied or overapplied for
the year? By how much?
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Q 06 Mauro Products distributes a single product, a woven basket whose selling price is $15
and whose variable expense is $12 per unit. The companys monthly fixed expense is $4,200.
Required:
1. Solve for the companys break-even point in unit sales using the equation method.
2. Solve for the companys break-even point in sales dollars using the equation method and
the CM ratio.
3. Solve for the companys break-even point in unit sales using the formula method.
4. Solve for the companys break-even point in sales dollars using the formula method and
the CM ratio.
Q 07 Fixed cost per unit remains fixed. Do you agree?
Q 08 How variable cost per unit behaves? Give two examples.

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