The Islamic University of Gaza

Faculty of Commerce
Department of Accounting

Advanced Managerial Accounting.

Mid- Term Exam 2016.
Master for Accounting and Finance.
Master of Business Administration.

Student Name……………………………………………………
Student No………………………………………………………

Prof. Salem Abdalla Helles

2 April, 2016

Question No. (1)

 Suppose DP Corporation's breakeven point is $1,100,000. Fixed
costs are $660,000.
Required:
1- Compute the contribution margin percentage.
2- Compute the selling price if variable costs are $16 per unit.
3- Suppose 95,000 units are sold. Compute the margin of safety in
units and degree of operating leverage.

Question No. (2)

TM's Trophies makes trophies and plaques and operates at capacity.
TM does large custom orders, such as the participant trophies for the
MLL.
TM's Trophies
Budgeted Information
For the Year Ended November 30, 2016
Forming Department Trophies Plaques Total
Direct materials $13,000 $11,250 $24,250
Direct labor 15,600 9,000 24,600
Overhead Costs Setup 12,000
Supervision 10,386

Assembly Department Trophies Plaques Total

Direct materials $2,600 $9,375 $11,975
Direct labor 7,800 10,500 18,300
Overhead Costs Setup 23,000
Supervision 10,960
Other information follows:
Setup costs vary with the number of batches processed in each
department. The budgeted number of batches for each product line in
each department is as follows:
Trophies Plaques
Forming Department 40 116
Assembly Department 43 103
Supervision costs vary with direct labor costs in each department.
Required:
Calculate the budgeted cost of trophies and plaques if TM allocated
overhead costs in each department using activity-based costing.
Question No. (3)
Bob’s Textile Company sells shirts for men and boys. The average
selling price and variable cost for each product are as follows:
Men’s Boy's
Selling Price $28.80 Selling Price $24.00
Variable Cost $20.40 Variable Cost $16.80
Fixed costs are $38,400.
Required:
A. What is the breakeven point in units for each type of shirt,
assuming the sales mix is 2:1 in favor of men's shirts?
B. What is the operating income, assuming the sales mix is 2:1 in
favor of men's shirts, and sales total 9,000 shirts?
C. How many units for each type of shirt would be sold if the
company desired an after- tax net income of $24,000, facing a tax
rate of 20%?

Question No. (4)

Each Multiple – choice question has four suggested answers, letter
(A), (B), (C), or (D). You should read each question and then decide
which choice is best.
1.DC Co. has identified an activity cost pool to which it has allocated
estimated overhead of $19,200. It has determined the expected use
of cost drivers for that activity to be 160 inspections. W require
40 inspections, G 30 inspections, and T 90 inspections. The
overhead assigned to each product is:
a) W $ 4000 , G $ 3000, T $9000.
b) W $ 6400, G $ 6400, T $6400
c) W $ 3600 G $ 4800 T $ 10,800.
d) W $ 4800 , G $ 3600, T $10,800.

2.CC Company sells 100,000 wrenches for $12 a unit. Fixed costs are
$ 300,000 and net income is $200,000. What should be reported as
variable expenses in the CVP income statement?
a) $ 700,000
b) $ 900,000
c) $500,000
d) $1,200,000
3.GA Company is planning to sell 200,000 pliers for $4 per unit. The
contribution margin ratio is 25%. If the company will break even
at this level of sales, what are the fixed costs?
a) $100,000
b) $160,000
c) $200,000
d) $300,000

4. Helping Hands is a nonprofit organization that supplies electric

fans during the summer for individuals in need. Fixed costs are
$200,000. The fans cost $20 each. The organization has a
budgeted appropriation of $480,000. How many people can
receive a fan during the summer?

A) 12,000 people
B) 14,000 people
C) 24,000 people
D) 34,000 people
Good Luck