The document outlines various managerial accounting problems and solutions pertaining to projected income statements, cost analysis, and budgeting for different companies. It includes details on sales forecasts, cost of goods sold, administrative and selling expenses, as well as requests for calculations related to production costs, breakeven analysis, and pricing strategies. The document covers multiple case studies requiring financial calculations and statements for effective management decision-making.

1. PAF KIET
ANALYSIS OF MANAGERIAL ACCOUNTING
Sir Hummayun Farid Uddin
Cost of goods Sold, Income Statement, Budgeting and Forecasting
Question 1.
Ahmed manufacturing company’s projected sales of Rs. 1, 850,000 for the next
Year. The budgeted data proposed by Cost Accountants are as follows:
Material: Rs. 1,115,000
Labor: 195,000
FOH: 165,000
The company’s opening finished goods inventory is Rs. 135,000 and ending
Finished goods inventory are Rs. 155,000. The fixed portion of administrative
And selling expenses is estimated as 9% and 13% of sales respectively and
Variable portion of administrative and selling expenses is estimated as 5% and
15% of sales respectively.
The financial charges are estimated Rs. 5,500 and the tax rate is 33%.
Required: Prepare the projected income statement for the period with schedule of COGS
(Marks: 2)
Question 2.
The T & M Wild Corporation anticipates sales of Rs. 9, 00,000 for the current. The
percentage of gross profit from sales has been 40% in past years. Operating expenses
are expected to be Rs. 2, 00,000, of which 45% is administrative expenses and 55% is
selling expenses. Assuming 40% tax rate.
Required:
A Budgeted income statement for the for the T & M Wild Corporation year 2012

2. Question 3
Pemcon Industries Ltd. Sumits the following data for October.
The marketing department provided the following sales estimates for the month of November and
December.
Description November December
Commercial sales Rs. 250,000 Rs. 300,000
Government sales Rs. 100,000 Rs. 115,000
Other relevant information pertains to following data:
 Cost of goods sold: 46% of total sales
 Advertisement expenditure: 4,000 each month.
 Selling expenses: 10% of total sales.
 Administrative expenses 16.8% of gross profit.
 General office expense 12% of gross profit
 Other income Rs. 8,000 per month
 Corporate income tax rate: 40%
Required:
A forecast income statement with schedule showing cost of goods manufactured and sold.
Question 4 (Mark 5)
Use the following information to draw up a production cost statement for Excell Ltd for the year
ended 30 June 2002. The following information is provided:
Stock on 01/07/2001 : Stock on 30 June 2002
Raw material 5 600 8 600
Incomplete cork 2 400 3 900
Finished goods 5 800 11 300
Transaction for the year.
Material purchased R 34 000
Direct labor cost- (R25 per hr.) R138 000

3. Direct material issued 30 000
Indirect labor cost 65 000
Indirect material issued 700
Insurance 2 000
Water and electricity 5 300
Factory rent 14 000
Sundry factory expenses 5 700 Depreciation equipment 7 500
Factory overheads are recovered at R18 per labor of direct labor cost.
Required: Calculate the production cost of the finished goods in a Production cost statement to present to
management.
Question 5
The following data pertain to the operations of Falcon Company for the month:
On October 1, the company had the following inventories:
Material Rs. 24,000; finished goods Rs. 36,000.
During the month, materials purchased totaled Rs. 56,000; direct labor for October was Rs. 40,000, at a
uniform wage rate of 6.40 per hour.
Marketing and administrative expenses for the month amounted to 10% of the net sales.
Inventories on Oct 31 were as follows.
Materials Rs. 20,000; finished goods Rs. 40,000. Net sales for October totaled Rs. 200,000. Factory
overhead is applied to production on the basis of Rs. 8 per direct labor hour.
Required: (Mark 5)
(1) Prime cost; (2) Conversion cost; (3) Cost of goods manufactured; (4) Cost of goods sold
CostBehavior/ CostComputation
Question 6
General Furniture Manufacturers CC, manufactures washing machines. In June, General Manufacturers
CC sold 75 washing machines for R1500.00 each. General Furniture Manufacturers CC incurred the
following costs:
Material cost per unit R350.00
Direct Labour per
unit
R300.00

4. Factory overheads at 100% of direct labour costs as from 1July, material costs decreased by 10% per unit,
while direct labour costs increased by 15% per unit.
The expected sales for July are 100 units.
Required:
a) Calculate the sale price per unit that will provide the same ratio of gross profit, assuming no change in
the rate if factory overheads in relation to direct labour costs.
b) Calculate the sales price per unit that will produce the same ratio of gross profit, assuming that R120 of
June factory overheads consists of fixed costs and that the variable factory overhead ratio to direct costs is
unchanged from June.
Question 7:
The following data pertain to the operations of Mc Donald Company for the year:
Sales in Kilograms: 75,000
Finished goods Inventory, January 1: 12,000 Kilograms
Finished goods Inventory, December 31: 17,000 Kilograms
Sales Price: 10 per kilogram.
Manufacturing Cost:
Variable cost per kilogram of production: Rs. 4
Fixed factory overhead: 160,000 (normal capacity: 80,000 kilogram)
Marketing and administrative expenses:
Variable cost per kilogram of sales: Rs. 1
Fixed marketing and administrative expenses: 150,000
Required:
The year’s income statement under the (a) absorption costing method and (b) direct costing method.
Planning Profit, Sales and Cost and DM.
Question No: 8 (Marks 5).
International Brands Ltd. Is operating at 70% capacity and producing 3,150 pieces of product A. The cost
of production for the month of August 2012 was:

5. Rs.
Direct Material 54,000
Direct wages 8,100
Variable Overheads 9,900
Fixed Overheads 18,000
The products are currently sold at an average price of Rs. 72.
A tender for supply of 900 pieces per month has been received. To submit tender the following information
has been ascertained.
• Variable Overheads attributable to various activity level is:
% Per month Rs.
50 8,280
60 9,900
70 11,520
80 13,500
90 15,300
100 16,920
Required:
(a) Calculate the bidding price which will yield a 25% profit.
(b) Prepare a statement showing the effect on the monthly profit if the company’s tender is
accepted.
Cost Volume Profit Analsis
Question 9 (Marks 5)
The following is the Corporation's Income Statement for last month:
Sales Particulars Rs. 4,000,000
Less: variable expenses 1,800,000
Contribution margin 2,200,000
Less: fixed expenses 720,000

6. Net income 1480,000
The company has no beginning or ending inventories. A total of 80,000 units were
Produced and sold last month.
a. What is the company's contribution margin ratio?
b. What is the company's break-even in units
c. How many units would the company have to sell to attain a target profit of
Rs. 600,000?
Question 10 (Marks 5)
Lindale Inc. manufactures and sales a specialize product which is a fundamental to fix before a lockers
locks and its doors. The breakeven of the said product manages while hitting a sales of is Rs. 1000,000 by
selling total units of 37,500. The price of this specialize lock is set by the management of the company
basedon the recommendation of management accountant who suggest the price at29%. The manufacturing
cost is composed of factory overhead of Rs. 175,000 for producing 20,000 locks and Rs. 131,250 for
producing 15,000 locks.
Required.
1. Fixed cost and variable cost of producing a lock.
2. Contribution margin ratio.
3. Breakeven in units.
4. Suggest price of a lock if the management plans to make desired profit of Rs. 1,500,000 based on
the same units at breakeven?
Question 11 (Marks 5)
The following information is given for Indexia Manufacturing cc.
Unit sales price R30
Variable cost per unit R18
Total fixed cost R150 00
Required
Determine the following:
2.3.1 Contribution margin per unit
2.3.2 Contribution margin Ratio
2.3.3 Break-even sales in unit
2.3.4 Break-even sales in Rand

7. 2.3.5 Sales in units required to achieve a net income of R18 000
2.3.6 Sales in units required to achieve net income of 20% on sales
Question 12. (Mark 5)
The Rose Williams Company has a C/M ratio of 36%. Breakeven sales are Rs. 160,000. The company
earned a profit of Rs. 28,800 during the year.
Required:
5. Fixed expense. (b) Variable expense for the year
6. Sales for year (d) Margin of safety ratio.
Specific order / job order Costing/FOH
Question 13:
A Ltd. employs a job-order costing system. The factory expenses incurred in the month of March of the
current year (as shown by the factory overhead control account) are:
Amount in Rs.
Cutting shop 36,250
Assembly shop 4,755
Spraying shop 670
Finishing shop 7,900
Overheads have been debited to jobs as follows:
Cutting – 1.30 per machine-hour for 22,000 hours.
Assembly – 140% of direct labor cost. Direct labor cost is Rs. 3,300
Spraying – Rs. 0.60 per piece for 925 pieces.
Finishing – Rs. 0.75 per direct labor-hour for 11,000 hours
All expenses are charged to a factory overhead control account and are transferred from this account at
the end of each month to the departmental overhead account.

8. You are required to (a) record the necessary journal entries for factory overhead incurred and
absorbed and (b) state the amount of over- or under-absorption of overhead in each department. Assume
that the company maintains both factory ledger and generalledger.
Question No. 14
Budgeted fixed costs $70,000
Budgeted variable costs per kilowatt hour
(kWh) $ 0.18
Additional data for 19X3: Dept. X Dept. Y
Long-run demand (kWh) 420,000 280,000
Budgeted for 19X3 (kWh) 310,000 200,000
Actual for 19X3 (kWh) 320,000 160,000
Actual power plant costs for 19X3 are:
Fixed $78,000
Variable $90,000
Required:
Compute the 19X3 allocation ofpower plant costs to departments Xand Y:
a. Fixed b. Variable

9. Dept. X $ $
Dep. Y $ $
Price Determination (high-low method).
Question 15.
David Industries Ltd. Produces a single product and has a manufacturing capacity of 12,600 units per
week of 48 hours. The output data for three consecutive weeks is given below:
Units Produced Direct Material Direct Labour Total FOH
(Variable & Fixed)
4,320 86,400 108,000 66,960
5,040 100,800 126,000 69,120
6,480 129,600 162,000 73,440
Required:
Work out the selling price assuming an activity level of 7,200 units per week and a profit of 20% on
selling price?
Question 16.
ABC LTD. estimates factory Overheads of R225 000.00 for the next year. An estimated
25 000 units will be produced. Material cost was estimated at R500 000.00. Conversion will require
an estimated 56250 labor hours at a cost of R8.00 per hour and estimated 75 000 machine.
Required:
Calculate the predetermined overhead rate to be used in applying factory overheads to production on each
of the following basis:
1. Units of Production
2. Material Cost
3. Direct labor hours
4. Direct labor cost
5. Machine hours

10. Activity Based Costing: (NOT INCLUDED IN MIds)
Question 17.
The budgeted overheads and cost drivers volumes of Barklays Corporation are as follows.
Cost pools Budgeted Over
Heads
Cost Drivers Budgeted
Volumes
Material
Procurement
1,044,000 No. of orders 1980
Material
Handling
450,000 Numbers of
movements
1224
Set-up 747,000 No. of set-ups 936
Maintenance 1,746,000 Maintenance
hours
15,120
Quality Control 316,800 No. ofInspections 1,620
Machinery 1,296,000 No. of Machine
hours
43,200
The company has produced a batch of 4,680 components of product A-1. Its cost data are as follows.
Material Rs. 234,000
Labor cost Rs. 441,000
The actual usage activities of the said batch are as follows.
Material orders 47
Material movements 32
Set-ups 45
Maintenance hours 1,242
Inspections 50
Machine hours 3,240

11. Required:
(a) Calculate cost drivers rates that are used for tracing appropriate amount of overheads to the said
batch.
(b) Ascertain the cost of batch components using Activity based Costing.
MIDS ANALYSIS:
COGS 3
Job Order Costing/Consumption 3
Break Even Analysis 3
Planning Profit, Sales and Cost and DM. 1
FINAL ANALYISIS
Planning Profit, Sales and Cost and DM. 4
Specific order / job order Costing/ FOH 2
Cost Volume Profit Analsis 5
Cost Behavior / Cost Computation 5
Price Determination (high-low method). 2
Activity Based Costing: 5
Absorption Costing Vs Direct Costing: Income Statement. 1
MostImportant topics:
Specific order / job order Costing/ FOH
Price Determination (high-low method).

12. Activity Based Costing
Cost Behavior / Cost Computation
Planning Profit, Sales and Cost and DM.