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1.
2.
Period costs are costs that are matched against revenues on a time period basis (8). T
3.
Fixed cost per unit varies with changes in volume of output (8).F
4.
5.
A cash flow statement indicates how much profit the company make during the fiscal year
(2). F
6.
7.
8.
9.
10.
Which of the following item is not reported in the Income (Profit & Loss) statement (2)?
A. Expenses
B.
Sales
C. Depreciation
D. Liabilities/
14.
15.
The gross profit margin is unchanged, but the net profit margin declined over the same
period. This could have happened if (2)
A. cost of goods sold increased relative to sales.
B. sales increased relative to
expenses.
C. the government increased the tax rate. /
D. dividends were decreased.
6,800,000
1,020,000
560,000
443,000
200,000
??
120,500
6,480,000
150,000
i. If the companys Debt ratio is 28%, determine the amount total financing supplied by
the creditors. Write the formula that you used.
Debt ratio = Total Debt/Total Assets; 0.28 = X /9,009,000; X = 2,520,000 financing
supplied by creditors
ii. Calculate the amount of Account Receivables (or Debtors Account) owned by the
company.
iii. Determine BROSs Quick ratio for 2015. Write the formula that you used
Current ratio = (CA Inventories) /CL or (Cash + Receivables)/ CL
= 1.18
iv. You are to prepare the Balance Sheet for BROS Company on 30th March 2015. Use the
figures you have calculated in i ii, and iii if deemed necessary.
Balance Sheet for BROS Company on 30th March 2015
Fixed Assets
Owner's Equity
6,800,000
Vehicles
Office Equipment
1,020,000
560,000
Current Assets
Inventories
Receivables
Cash
TOTAL ASSETS
443,000
56,500
120,500
9,000,000
Equity
6,480,00
0
2,370,00
0
Current Labilities
Accounts Payable
TOTAL OWNERs EQUITY &
LIABILITIES
150,000
9,000,00
0
1)
2)
3)
4)
5)
6)
7)
Cost
Lubricants for sewing machines
Interest on bank overdraft
Woven silk
Wages of security guards for factory
Cost of advertising products on television
Wages of operators in the pattern & cut department
Wages of forklift truck drivers who handle raw materials
Cost analysis
MOH
AE
DM
MOH
S&D
DL
MOH
b) Siti Moon has a catering business. One day she has to decide whether to accept Lizas or
Fazlis order, as she could not take both order at the same time.
If she accepts Lizas, she has to incur total cost of RM 3,000, and get net income of
RM1,500.
If she accepts Fazlis, she has to incur total cost of RM 4,500, and get net income of
RM1,000.
If she declines both orders, she still has to incur RM500 on the cook fixed salary (this
was included in both orders total costs)
Time factor is the only the defining aspect of any engineering economic decisions. F
Profit maximization output level is at marginal revenue equals to marginal costs. T
Accounting focuses on the past, while engineering economics focuses on the future. T
It is better to receive money earlier than later because our purchasing power will increase
in the future. F
5. Fixed costs are zero when production is equal to zero. F
6. Steel in bridge construction is a direct raw material. T
7. Heat and light costs associated with a companys administrative function is a
nonmanufacturing costs. T
8. Fixed cost per unit varies with changes in volume. T
9. The quantity of a variable at which revenues and costs are equal is known as the maximum
cost point. F
10. The type of cost given below is a variable cost. T
Volume
Cost
1 unit
RM 18
10 units
180
100 units
1800
Section B: Problem Solving Questions
QUESTION 1 [ 7 marks]
OfficePro Manufacturing Company produces programmable models of graphic calculators that
can hold large amounts of data for the storage of programs and formulas.
(a) State at least TWO roles of engineers in this company. [2 marks]
Create & Design: Engineering Projects
Analyze: Production Methods, Engineering Safety, Environmental Impacts, Market
Assessment
Evaluate: Expected Profitability, Timing of Cash Flows, Degree of Financial Risk
Evaluate: Impact on Financial Statements, Firms Market Value, Stock Price
(b)
List down THREE prediction about the future made by OfficePro to manufacture the
calculators. [3 marks]
Estimating a Required investment
Forecasting a product demand
Estimating a selling price
Estimating a manufacturing cost
Estimating a product life
(c)
e.g. Now is the time to replace the old machine? If not, when is the right time to replace
the old equipment?
(a)
RM
30
10
10
10
500,000
300,000
160
P-AVC; AVC : 30+10+10+10 = RM60; 160-60 = RM100 [1 mark]: To cover for AFC and
profit per unit
(b)
TR= 160Q; TC= 800,000 + 60Q; 160Q= 800,000+60Q; Q= 800,000/100 = 8000; 8000 *
160 = RM1,280,000
(c)
Calculate the total non manufacturing cost per unit at the break-even point.
(300,000 /8,000) + 10 = 37.5 + 10 = RM47.50
(d)
i. Do you agree that the quantity manufactured and sold should increase by 25% to make
a profit of RM200,000 compared to the break even point? Show your calculations.
(FC + PROFIT)/ MC; (800,000 + 200,000)/ 100 = 10,000 units; 10,000 units -8,000 units=
2,000 units
an increase of 2,000/8,000 = yes, 25% Or
160Q (800,000+60Q)= 200,000; Q = 10,000 units
From part (b), break-even units are 8,000 thus 10,000 units - 8,000 units= 2,000 units
an increase of 25%
ii.
(e)
Due to the shortage of supply of materials used to make the seat pan, the cost of direct
material per unit increases by RM5, all else remain constant. What will be the effect on
quantity to maintain a profit of RM200, 000?
160Q (800,000 + 65Q) = RM200,000; Q = 1,000,000 / 95 = 10526 units; an increase of
526 units to produce
and sell.]