MANAGEMENT ACCOUNTINNG EXERCISES

1. ASSIGNMENT 1
BBCA 2153 MANAGEMENT ACCOUNTING TECHNIQUE
Question 1:
a) Throughput time = Process Time + Inspection Time + Move Time + Queue Time
= 2.0 + 0.4 + 0.6 + 5.0
= 8.0 days
b) Manufacturing Cycle Efficiency (MCE) = Value Add Time / Throughput Time
= 2.0 / 8.0
= 0.25
c) Percentage of the Production Time, if MCE = 0.25
= 25%
= 100% - 25%
= 75%
d) Delivery Cycle Time = Wait Time + Throughput Time
= 17.0 + 8.0
= 25.0 day
Question 2: a)

2. b)
c)

3. Question 3:
Contribution Margin / (Direct materials/Material Cost)
A = 32 / (24/3) B = 14 / (15/3) C = 21 / (9/3)
= 32/8 = 14/5 = 21/3
= 4 = 2.8 = 7
Therefore, 1st
C, 2nd
A and 3rd
B.
Question 4
a) Variable expenses per unit = RM 40 x (100%-30%)
= 28
b) Break even point = Fixed cost / CM
= Fixed cost of RM180,000 / CM per unit (12)
= 15,000 x 40
= 600,000
c) Rm40x = 28x + 180,000 + 60,000 If Annual Profit 60,000
12x = 24,000 = 20,000 x RM40

4. X = 20,000 = 80,000
d) Rm40x = 24x + 180,000 + 0
16x = 180,000
X = 11,250
Question 5:
Question 6:
A B C
Contribution Margin Per Unit 54 108 60
Direct Material Cost Per Unit 24 72 32
Direct Material Cost Per Pound 8 8 8
Pound of Materials Required Per Unit 3 9 4
Contribution Margin Per Pound 18 12 15
Worksheet :
Pound of Material Required Per Unit = Direct Material C.P.U /Direct Material C.P.P
A = 24/8 B = 72/8 C = 32/8
Puget Sound Divers Flexible Budget
For The Month Ended 31st
May 2015
Budgeted Diving Hours 105 hour
RM
Revenue (RM365/hour) 38325
Expenses:
Wages and Salaries (RM8,000+RM125/hour) 21,125
Supplies (RM3/hour) 315
Equipment Rental (RM1,800+RM32/hour) 5,160
Insurance (RM3,400) 3,400
Miscellaneous (RM630+RM1.80/hour) 819
Total Expenses 30,819
Net Operating Income RM 7,506

5. = 3 = 9 = 4
Contribution Margin Per Pound = Contribution Margin P.U / Pound of Materials Required P. U
A = 54/3 B = 108/9 C = 60/4
= 18 = 12 = 15
b) The company should concentrate its available material on product A:
A B C
Contribution margin per pound (above) 18 12 15
Pounds of material available 5,000 5,000 5,000
Total contribution margin 90,000 60,000 75,000
Although product A has the lowest contribution margin per unit and the second lowest
contribution margin ratio, it is preferred over the other two products since it has the greatest
amount of contribution margin per pound of material, and material is the company’s constrained
resource

6. = 3 = 9 = 4
Contribution Margin Per Pound = Contribution Margin P.U / Pound of Materials Required P. U
A = 54/3 B = 108/9 C = 60/4
= 18 = 12 = 15
b) The company should concentrate its available material on product A:
A B C
Contribution margin per pound (above) 18 12 15
Pounds of material available 5,000 5,000 5,000
Total contribution margin 90,000 60,000 75,000
Although product A has the lowest contribution margin per unit and the second lowest
contribution margin ratio, it is preferred over the other two products since it has the greatest
amount of contribution margin per pound of material, and material is the company’s constrained
resource