Management accounting

Case:Realizing the dream

By group 2

NUR FARHAH NAJIHAH BINTI ROSDI

XU HAONAN
SHI JIAXU
NOOR AN NISA BINTI MOHAMAD MARITI
 Question 1
TYPE OF SERVICES laboratory services (40%) Scan services (60%)
SALES 300 PATENTS PER
120 patient =120*11.25=$135 180 patients =180*9=$1620
MONTH

Reagent $150.00 gel $225.00

Syringer $15.00 thermal print paper $450.00
ultrasonographer
Test kits $150.00 $97.20
Variable costs (2)(6%)
Test tubes $37.20
Rent, utilities and janitorial Rent, utilities and
$540.00 $648.00
services janitorial services
Total variable cost $892.20 Total variable cost $1,420.20
Contribution margin $457.80 $199.80

Computer and printer =15*40%=$6 Computer and printer =15*60%=$9

furniture and fitting =21*40%=$8.4 furniture and fitting =21*60%=$12.6
laboratory equipment $236.667 Scan equipment $150
Depreciation expences: $251.07 Depreciation $171.60
A4 paper =5*40%=$2 expences:
A4 paper =5*60%=$3
Envelope =6*40%=$2.4 Envelope =6*60%=$3.6
Gloves =30*40%=$12 Gloves =30*60%=$18
Tissue =5*40%=$2 Tissue =5*60%=$3
Toner =16.67*40%=$6.666 Toner =16.67*60%=$10
Fixed Cost
alcohol $2.50
bandages $7.50
cotton $2.50

Admin $50.00 Admin $75.00

Lab technician $400.00
labor cost $450.00 $75.00
Total Fixed cost $738.63 Total Fixed cost $284.20

Operating Income -$280.83 -$84.40

Question 2
Assume that the lab only provide scan services

Type of serScan services (100%) - $9

Sales (180 p180 patients
p m 1,620.00

gel 225.00
thermal print paper 450.00
Variable cos ultrasonographer (2) 194.40
Rent, utilities and janitorial s 648.00
Total variable cost 1,517.40

Contribution Margin 102.60

Computer and printer 15.00
furniture and fitting 21.00
scan equipment 150.00

Depreciation expences:
Computer and printer 5.00
furniture and fitting 4.20
Scan equipment 30.00
Fixed Cost
A4 paper 5.00
Envelope 6.00
Gloves 30.00
Tissue 5.00
Toner 16.67

Admin 125.00

Total Fixed cost 412.87

Total Operating income -310.27

Scan ServicSales = 180 patients *$9 1,620.00
VC 1,517.40
CM 102.60
FC 412.87

412.87 per month 99.008 units ~ 100 patients

4.17 per unit

100 patients* $9 $ 900.00

 Assume that the lab only provide Lab services

Type of serLab services (100%) - $11.25

Sales (120 p120 patients
p m 1,350.00

Reagent 150.00
Syringer 15.00
Test kits 150.00
Variable cos
Test tubes 37.20
Rent, utilities and janitorial s 540.00
Total variable cost 892.20

Contribution Margin 457.80

Computer and printer 15.00

furniture and fitting 21.00
Lab equipment 236.67

Depreciation expences:
Computer and printer 5.00
furniture and fitting 4.20
Lab equipment 47.33

A4 paper 5.00
Envelope 6.00
Gloves 30.00
Fixed Cost
Tissue 5.00
Toner 16.67

Alchohol 2.50
Bandages 7.50
Cotton 2.50

Admin 125.00
Ceo 200.00
Lab technician 200.00

Total Fixed cost 929.37

Total Operating income -471.57

Lab ServiceSales = 120 patients *$11.2 1,350.00

VC 352.20
CM 457.80
FC 929.37

929.37 per month 111.77 units ~ 112 patients

8.32 per unit

112 patients* $11.25 $ 1,260.00

Thus, based on above calculations, we conclude that scan service need less patients which is 100 patients
* to achieve breakeven point, compared to lab services 112 patients
Sales = 180 patients *$9 1,620.00
VC 1,517.40
CM 102.60
FC 412.87

break-even point (units) 724.33 units patients

question 3
Lab Services ($) Scan services ($) Total
Sales 1,350.00 1,620.00 2,970.00
VC 892.20 1,420.20 2,312.40
CM 457.80 199.80 657.60
FC 738.63 284.20 1,022.83
Operation i -280.83 -84.40 -365.23

Operating l f 657.60
-365.23

-1.800509268
The company will experience very low return but at low risk due to GEO Medical is lowly leveraged
 question 4
weighted Average Contribution margin Ratio =(457.8+199.8)/(1350+1620)=0.22
Total Fixed Cost 1022.83
Total Revenues to break even 4649

Break-even point in dollar to scan 2790

Break-even point in dollar to lab 1860
Total dollars to Break-even point 4649

Break-even point in patients to scan 310

Break-even point in patients to lab 165
Total Patients to Break-even point 475

question 5
weighted Average =(457.8+199.8)/(1350+1620)
Contribution margin =0.22
Total Ratio
Fixed Cost 1022.83
+ Target profit 3000.00
4022.83
Total Revenue (for $3000
=4022.83/0.22=18168
Target profit)

sales for scan(dollar) =18168*60%=10901

sales for lab(dollar) =18168*40%=7267

sales for scan (patients) =10901/9=1211

sales for lab (patients) =10901/11.25=646
total 1857

question 6
sales for scan(dollar) 10901
sales for lab(dollar) 7268
total 18169

question 7
item male cost female cost total cost
Blood grouping reagents
$152.50 $187.50 $340.00
and sickle cel
Gloves $12.20 $15.00 $27.20
Optician $56.07 $68.94 $125.01
Other consumables $65.88 $81.00 $146.88
Pregnancy test kits $187.50 $187.50
Transportation and
$44.85 $55.15 $100.00
logistics
Total costs $331.50 $595.09 $926.59

Sales 3*272=816
Total costs 926.59
eye costs 125
the cost of logistics,
transportation, fuel, and
100
payments made to
volunteers
loss (335.59)

They shouldn't accpect.Because the income obtained isn't able to cover the variable costs
Question 8

(1) Social responsibility, offering services to schools can be seen as a sign that wallas is full of social

responsibility, offering checks to school students can have a positive impact on the local community

and increase its influence.

(2) Reputation and visibility, accepting offers from schools can increase the visibility of GEO

laboratories, which can lead to increased visibility of the laboratories and attract more potential

customers.

Hazards and challenges

(1) Operational capacity challenges, due to lack of staff and the need to prepare sufficient information,

there may be a situation where the text is closed for a day, which requires proper planning and

arrangements.

(2) Financial risks, the school may not be able to make ends meet as the price offered is lower than the

market rate, which may lead to financial losses for itself.

(3) Loss of reputation, if the acceptance of the school's offer attracts more customers than it can carry,

this may lead to loss of reputation of the laboratory.

Question 9

(1) Renew your marketing strategy by accepting the school's offer and promoting your laboratory to

other schools through the school's pathway, building a good reputation within the school by advertising

and giving free experience tickets to teachers, etc. to increase your influence.

(2) Re-negotiation of fees, as the expansion of the business will make the labs pay more for the number

of participants, so a fixed fee can be negotiated to reduce their costs.

(3) Optimize operations: Wallas can look for ways to optimize operations and reduce costs. This may

include negotiating better deals with suppliers, improving scheduling to maximiser the use of its

facilities and staff, and implementing cost-saving measures such as energy efficiency. Find more

reasonably priced consumables.