Question Answer-02

2(b)(i)
Palner Manufacturing
Statement of Cost of Goods Manufactured

Particulars Tk.

Direct Material 20000

Direct Labour 35000
*Prime Cost

Factory Overhead

*Total manufacturing Cost Added

Add: Beginning Inventory of Work in Progress
Less: Ending Inventory of Work in Progress

*Cost of Goods Manufactured

Add: Opening Inventory of Finished Goods

Less: Closing Inventory of Finished Goods (830x65000/10000)
*Cost of Goods Sold

b) (ii) Palner Manufacturing

Income Statement (Absorption Costing Method)

Particular Tk.
Sales (9800x12) 117600
Less: Cost of Goods Sold -63700

Gross Mergin

Less: Operating Expenses

Administrative Expense
Selling Expense
*Operating Income
Tk. Tk.

55000

10000

65000
0
0

65000

4095
-5395
63700

Tk.

53900

-6250
-14400
33250
3 (C) (i)
Cutlass Company

Break Even Point (units) = (Fixed Costs/Contribution Margin Per Units)

= (64000/8)
= 8000 units

(ii) To Earn a profit of Tk. 80,000 units to be sold = (Fixed Cost+Expected Profit)/Contribution M

= (64000+80000)/8
= 18000 units

(iii) Contribution Margin Ratio = (Total Contribution Margin/Sales)

= (80000/200000)

= 0.4

(iv) When the sales increase by Tk. 30000 the new sales will be Tk. ( 200000+30000)= Tk. 230000

New Variable cost will be Tk. (120000+10000)= Tk. 130000

so, new contribution margin will be Tk. (230000-130000)= Tk. 100000

Thus, New contribution margin Ratio will be = (100000/230000)= 0.435

Since the contribution margin ratio increases it will be a good decision to advertise Tk. 10000 for marketi
n Margin Per Units)

Expected Profit)/Contribution Margin per unit

ibution Margin/Sales)

+30000)= Tk. 230000

o advertise Tk. 10000 for marketing

5(B)
Question-06
Berger King
Cash Flow Statement (Indirect Method)
For the period ended on 31 December 2017

Particular
Net Income

Cash Flow from Operating Activities:

+ Depreciation
+ Prepaid Expense charge
+ Drecease in Account Receivable
-Increase in Inventory
+Increase in Account Payable
+Loss in sale of Equipment

Net Cash Provided from Operation

Cash Generated from Operating Activities

Investing Activities:
+Sale of Land
-Purchase of Equipment
+Sale of Equipment

Cash Flow from Investing Activities

Financing Activities:

-Dividend Paid

Cash flow from Financing Activities

Add: Beginning Cash Balance 31 Dec 2016

= Closing Balance of Cash on 31 Dec 2017
Tk. Tk.
42000

42000
5720
21000
-9450
7730
4000

71000

113000

25000
-88000
6000
-57000
56000

-20000

36000

45000
81000