Name: Mohammad Nur Newaz Oyon

ID: 20-42788-1
Section: Managerial accounting [E]

Answer to the Question no 1

ERA Textile Limited

Cost Of Goods Sold Statement
Tuesday, December 31, 2019

Particulars Amount Amount

Raw materials Beginning inventory 25000
(+) Purchase of raw materials 225000
Raw materials Available for use in production 250000
(-)Raw materials Ending Inventory 30000
Direct Material 220000
Direct labor 70000
Indirect labor 15000
Depreciation factory 27000
Utilities factory 18000
Maintenance factory 40000
Supplies factory 17000
Insurance factory 14000
Factory Overhead 131000
Total Manufactuing Cost (TMC) 421000
(+)Work in process inventory 27000
448000
(-)Work in process Ending Inventory 40000
Cost Of Goods Manufactored (COGM) 408000
(+)Finished Goods Beginning Inventory 40000
Cost of goods avaliable for sale (COGAFS) 448000
(-)Finished Goods Ending Inventory 20000
Cost Of Goods Sold (COGS) 428000
 Answer to the question no 2

a. High Level (April) = 268,400 ........................................ 8960

Low Level (July) = 188,800 ........................................ 6970

Variable Cost per kilowatt= high total - low total / High unit - Low unit
=(8960-6970)/(268400-188800)
= 0.025/ kilowatt

At high level of 268400 hours:

Total Cost : 8960

Total Variable Cost (268400*0.025) = 6710

Total fixed Cost = 2250

b. Cost Formula Y = a+bX

=2250 + 0.025 X

c. 275000 Killowat were used

Y = a+bX
= 2250+0.025*27500
=2250+ 6875

Total Cost = 9125 Tk

 Answer To the question no 3

a. Contribution margin per unit = selling price- variable cost

=60-45
=15 units

C/M ration= selling price- variable cost/ selling price

=60-45/60
=0.25 or 25%

b. Break-even Point (In units)= Total Fixed Cost/ Contribution margin per unit
=240000/15
=16000 units

Break-even point (In amount)= Total Fixed Cost/ Contribution margin ratio
=240000/0.25
=960000 TK
c. Desired Level of sales ( In Unit) = Total Fixed Cost + Desired profit / Contribution margin
=240000+125000/15
=365000/15
=2433.33 units

Desired Level of sales ( In amount ) = Total Fixed Cost + Desired profit / Contribution margin ratio
= 240000+125000/0.25
=365000/0.25
=1460000 TK

d. Margin of Safety (in units) = Actual sales (Unit) - Break-even point (Unit)
=25000-16000
=9000 units

Profit = Margin of safety (in unit) x Contribution margin per unit

= 9000 x 15
=135000 Tk