Independent University, Bangladesh

Course code: ACN-202

Course Title: Management Accounting
Semester: Spring 2022
Section: 08

Submitted to:
Mr. Nafees reza
(School of business, IUB)
Submitted by:
Name: Humayon Ahmed Tamim
ID: 1921374

Table of Contents

1|Page
Answer 01:......................................................................................................................................3

Answer 02:......................................................................................................................................3

Answer 03:......................................................................................................................................3

Answer 04:......................................................................................................................................4

Answer 5A:.....................................................................................................................................5

Answer 5B:.....................................................................................................................................5

Answer 5C:.....................................................................................................................................5

Answer 5D:.....................................................................................................................................6

Answer 5E:.....................................................................................................................................6

Answer 5F:.....................................................................................................................................6

Answer 5G:.....................................................................................................................................7

Answer 5H:.....................................................................................................................................7

Answer 5I:......................................................................................................................................8

Answer 01:
Fixed cost of Aussie pie

2|Page
 Details $
Rent 11900
Cooking Equipment 8000
Fixtures 5000
Salaries of Chefs 3600
Sales Assistance 1200
Lighting 300
TOTAL 30000

Answer 02:
Variable cost per unit of Aussie Pie

Details $
Food Supplies 1.2
Packaging 0.03
Utilities 0.02
TOTAL 1.25

Answer 03:
Monthly profit or loss of Aussie Pie for the sales of 6000 pies.

Details $
Sales (6000*3.25) 19500
Variable cost (6000*1.25) -7500
Fixed Cost -30000
NET LOSS 18000

Answer 04:
Details $

3|Page
 Selling Price 3.25
Variable Cost 1.25
Fixed Cost 30000

CM per unit = Selling price per unit – Variable cost per unit
CM per unit= $3.25 - $1.25

= $2 per unit

Break Even Units= Fixed Cost/CM per unit

Break Even Units= $30000/$2

= 15000 units

Break Even in Sales Revenue= Fixed Cost/CM per %

Break Even in Sales Revenue= $30000/ ($2/$3.25)

=$48750

Answer 5A:
Monthly fixed Manufacturing overhead cost to produce meat pies

Details $
4|Page
 Chef Salary 3600
Rent 11900
Utility Bill 300
Equipment 8000
Fixture 5000
Supplies 200
TOTAL 29000

Answer 5B:
Monthly fixed selling and administrative cost

Details $

Rent 1000
Salaries executive salary 1200
Owners Salary 2000
Depreciation Cost 200
TOTAL 4400

Answer 5C:
Variable per unit cost of production of meat pies.

Details $
Raw materials 1.2
Utility Bill 0.03
TOTAL 1.23

Answer 5D:
Per unit selling and administrative cost

5|Page
 Details $

Sales Commission 0.5

Packaging 0.02
TOTAL 0.52

Answer 5E:

Break Even point Units= Fixed Cost/CM per unit

Break Even point Units= ($29000+4400) / ($3.25-1.75)

= 22,267 UNIT

Answer 5F:

Margin of Safety (%) = (Actual Units- Break Even Point units)/ Actual Units X 100%

Margin of Safety (%) = (25000-22,267) / 25000*100%

= 10.93%

Answer 5G:
Variable Costing: $1.25
6|Page
Absorption Costing:

JANUARY ($) FEBRUARY ($)

Variable Cost 1.23 1.23
FMOH 1.18 1.12
$2.41 $2.35

Variable costing Income Statement for the month of February

Details $
Sales Revenues (25000*3.25) 81250
Variable Cost:
Variable COGS (25000*1.25) -30750
Variable selling & admin cost (25000*0.52) -13000
Contribution Margin 37500
Fixed Cost:
Fixed MOH -29000
Fixed Selling & admin -4400
NOI 4100

Answer 5H:
Reconciliation Statement

Details $
Variable Costing NOI 4100
FMOH differed in ending in absorption costing 1680
FMOH differed in beginning in absorption costing -590
5190

Answer 5I:

7|Page
The absorption costing method is better. Yes, a greater working income is proven because the
cure on closing stock and fixed MOH is fair within that method.

8|Page