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Khartoum University

MBA Program 2013


Managerial Accounting
Group (1)
Assignment No:1
Problem 2 - A1 Fi xed and Variable -Cost Behavior:
1-a. Prepare a table.
Solution:

Cost of cleaning supplies for (1) time = 5000 / No.of cleaning time = $ 1250

No.

Month

Number of
cleaning Labor Cost
time

Cleaning
Supplies cost

Total Cost

March

24,000.00

5,000.00

29,000.00

April

24,000.00

6,250.00

30,250.00

May

24,000.00

7,500.00

31,500.00

10,000.00

34,000.00

4
Jun
8
24,000.00
1-b. Total cost of next quarter (April, May & Jun) =

95,750.00

2. will Boeing save money with the outside cleaning company over the next quarter
with charge rate for cleaning is = 5,900
Solution:
Number of
No.

Month

cleaning
time

Total Cost

April

29500

May

35400

Jun

47200

Total cost
quarter

of

next

112,100.00

Option (1-a) is the Best choice , Boeing will not save money by hiring the cleaning Cle
Company for the next quarter.

Khartoum University
MBA Program 2013
Managerial Accounting
Group (1)
Assignment No:1
Problem 2 - A2 Cost -Volume - Profit and Vending Machine:
1. What is the monthly break-even point in number of units/in dollar sales?
Solution:
Fixed Cost / Contribution Margin
5000 / 0.2
=
$ 25,000 per unit
In dollar sales =
1 * 25,000 =

$25,000

2. If 36,000 units were sold, what would be the company's net income?
Solution:
Net income = Revenue - Total cost (Fixed + variable cost)
(1 * 36,000) - (5000 + 0.8*36,000)
=
$2,200
3.If the space rental cost doubled, what the break-even point
Solution:
Fixed cost = 5000 +1152 = 6,152
Break even point = 6,152/ 0.2
$ 30,760 per unit
In dollar sales =
1 * 30,760

$30,760

4. What the break even point in number of unit /in dollar if machine manufacture $0.0
Solution:
Cost of soft drink = 0.8 + 0.02 = $ 0.82
C.M = 1 - 0.82 = $ 0.18
Break - even point = 5000/ 0.18
27,778.00 Units
=
$27,778
5. What the new net income if 36,000 were sold - if in addition to the fixed rent
Solution:
Break-even point = revenue = $ 25,000
No. of unit includes $ 0.04 = 36,000 - 25,000 = 11,000
Fixed cost = 5000
Variable cost = 0.8 + 0.04 = 0.84
0.84 * 11,000 = $ 9,240
Variable cost = (0.84 * 11,000) + (0.8 *25,000)
9,240 + 20,000
$29,240
Variable Cost.

Khartoum University
MBA Program 2013
Managerial Accounting
Group (1)
Assignment No:1
Net income = (36,000 *1) - (5000 + 29,240)
$1,760

artoum University
BA Program 2013
agerial Accounting
Group (1)

Assignment No:1

Total cost/per
feet
0.29
0.24
0.21
0.17

ing will not save money by hiring the cleaning Cleaning

artoum University
BA Program 2013
agerial Accounting
Group (1)

Assignment No:1

mber of unit /in dollar if machine manufacture $0.02

0 were sold - if in addition to the fixed rent

artoum University
BA Program 2013
agerial Accounting
Group (1)

Assignment No:1

Chapter 4 Group (1)


4 - A1

BELTRAN DOORS COMPANY

STATEMENT OF OPERATING INCOME (FOR EXTERNAL REPORTING


PURPOSES)
Sales
Cost of good sold:
Direct materials
Indirect manufacturing
Subtotal

$
$
$

$
$
$

Unallocated expenses
Admin Salaries
Others
Subtotal
Operating Income before Taxes

$
$
$

150,000.00

69,000.00

43,600.00

31,600.00

40,000.00
41,000.00
81,000.00

Gross profit
Selling & Admin expenses
Commissions
Distribution
Subtotal
Income before Unallocated Expeses

15,000.00
10,400.00
25,400.00

8,000.00
4,000.00
12,000.00

4 - A2
1- Inventory section for BOE (Merchandise), 1000 Tents at 96 USD = 96000 USD
2- Inventory section for CSI (Manufacturing):
Direct materials
Work in process inventory
Finished good inventory (1000)
Total Inventory

50000
0
96000
146000

3BASE ONE EQUIPMENT


INCOME STATEMENT
FOR YEAR ENDED DEC.31/20X4

Sales
Inventory at beginning
purchases
Cost of good available for sale
Ending Inventory
Cost of good Sold
Gross profit
Total Selling & Admin expenses
Net Income

1,620,000.00

$
$
$
$

864,000.00
756,000.00
185,000.00
571,000.00

$
$ 960,000.00
$ 960,000.00
$
96,000.00

4CAMPING SUPPLIES INTERNATIONAL


INCOME STATEMENT
FOR YEAR ENDED DEC.31/20X4

Sales
Inventory at beginning
Cost of goods Manufactured
Direct materials
Direct labor
Indirect Manufacturing
Total Cost of Products
Ending Inventory
Cost of good Sold
Gross profit
Total Selling & Admin expenses

1,620,000.00

$
$
$

864,000.00
756,000.00
185,000.00

571,000.00

$ 520,000.00
$ 290,000.00
$ 150,000.00
$ 960,000.00
$
96,000.00

Net Income
5- The difference between BOE & CSI :
BOE: Mechandiser has inventory for purchasing goods for resale.

CSI: Manufacturer has work in process inventory and finished goods (Direct Materials , Direct
labors & Indirect Manufacturing Overheads).

6The purpose is to provide all inventories for all users interested in Cost Management Accounting

AN DOORS COMPANY
COTRIBUTION TO CORPORATE COSTS & PROFIT (FOR
INTERNAL STRATEGIC DECISION MAKING
PURPOSES)
Custom Doors
Large Doors
Small Doors
$
30,000.00 $
40,000.00 $
80,000.00
$
$
$

5,000.00 $
28,000.00 $
33,000.00 $

15,000.00 $
5,000.00 $
20,000.00 $

20,000.00
8,000.00
28,000.00

(3,000.00) $

20,000.00

52,000.00

$
$
$
$

1,500.00
1,000.00
2,500.00
(5,500.00)

3,500.00
3,000.00
6,500.00
13,500.00

$
$
$
$

10,000.00
6,400.00
16,400.00
35,600.00

$
$
$
$

USD = 96000 USD

3-53

X1 Direct Labor Hours

X2 No of Board Completed

X3 Average Cycle Time

X3 Average Cycle Time

3- The cost driver is X3


4- The economics meaning of the function using cycle time as cost driver is:
Fixed Cost = 7727.5 USD per week , Variable Cost = 325 USD per hour of
average cycle time.

Hours

mpleted

cle Time

week
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

y
66,402
65,943
60,337
50,096
64,241
60,846
43,119
63,412
59,283
60,070
53,345
65,027
58,220
65,406
35,268
46,394
71,877
61,903
50,009
49,327
44,703
45,582
43,818
62,122
52,403

X1
7,619
7,678
7,816
7,659
7,646
7,765
7,685
7,962
7,793
7,732
7,771
7,842
7,940
7,750
7,954
7,768
7,764
7,635
7,849
7,869
7,576
7,557
7,569
7,672
7,653

X2
2,983
2,830
2,413
2,221
2,701
2,656
2,495
2,128
2,127
2,127
2,338
2,685
2,602
2,029
2,136
2,046
2,786
2,822
2,178
2,244
2,195
2,370
2,016
2,515
2,942

X3
186.44
139.14
151.13
138.3
158.63
148.71
105.85
174.02
155.3
162.2
142.97
176.08
150.19
194.06
100.51
137.47
197.44
164.96
141.95
123.37
128.25
106.16
131.41
154.88
140.07

cle Time

s cost driver is:

D per hour of