Rajshahi University of Engineering and Technology

Department of ME
Course No-HUM 2121 (Accounting)
Assignment 2
1. What is cost sheet? Describe the objectives of cost sheet. 2 marks
2. From the books of accounts of XYZ Company Ltd., the following details have been
extracted for the year ending December 31, 2015.
Particulars Taka
Stock materials: Opening 188,000
Closing 200,000
Work-in-progress: Opening 40,000
Closing 30,000
Material purchased during the year 832,000
Direct wages paid 238,000
Direct expenses 50,000
Indirect wages 16,000
Salaries to administrative staff 40,000
Freight: Inward 32,000
Outward 20,000
Repairs to plant and machinery 42,000
Rent, rates, taxes: Factory 12,000
Office 6,400
Travelling expenses 12,400
Salesman salaries and commission 33,600
Depreciation written off: Plant and Machinery 28,400
Furniture 2,400
Director fees 24,000
Electricity charges (factory) 48,000
Fuel (for boiler) 64,000
General Manager's salary 48,000
Profit 25% of sales.
From the above details you are required to prepare a statement showing: 8 marks
i) Prime cost
ii) Factory cost
iii) Total cost and
iv) Sales.
3. Describe the use of Break-even point. 2 marks
4. Voltar Company manufactures and sells a specialized cordless telephone for high
electromagnetic radiation environments. The company’s contribution format income statement
for the most recent year is given below:
Total Per Unit
Sales (25,000 units) .....................Tk.1,500,000 Tk.60
Variable expenses .......................... 1,125,000 40
Contribution margin ........................ 375,000 Tk. 20
Fixed expenses .............................. 300,000
Net operating income .....................Tk. 75,000
Management is anxious to increase the company’s profit and has asked for an analysis of a
number of items.
Required: 8 marks

i. What is the break-even point in units sold and in sales taka?

ii. Without resorting to computations, what is the total contribution margin at the
break-even point?
iii. How many units would have to be sold each month to earn a target profit of tk.
200,000?
iv. Refer to the original data. Compute the company’s margin of safety in both taka and
percentage terms.
v. Assume that sales increase by Tk.500,000 next year. If cost behavior patterns remain
unchanged, by how much will the company’s net operating income increase? Use the
CM ratio to compute your answer.
vi. If the selling price is reduced by 10%, how does the revised selling price affects the Break
Even Point and the Profit/Volume Ratio?

Instructions:
1. Solve the problems and prepare an assignment for submission (make a pdf file of your hand
writing document)
2. Last date of the submission: 5 January, 2021
3. email: saifuddink@ymail.com (please use Y)