Managerial Accounting (ACCM3204)
Faculty of Economics and Management Science (FEMS)
Semester: Second Semester
Level: 300
Year: 2017
Section A; COST ANALYSIS
Question one; (20 marks)
The result account of Mukete limited on 31/12/2016 is given as follows:
RESULT ACCOUNT AS AT 31/12/2016
Expenses Amount Revenues Amount
Purchases of goods
Variation of stock of goods
Purchases of packaging
Variation of stock of packaging
Other charges
Depreciation
provisions
net profit
20,050,000
-400,000
1,215,000
-25,000
11,860,000
700,000
100,000
3,900,000
Sales of goods
Production sold
37,200,000
200,000
TOTAL 37,400,000 TOTAL 37,400,000
The reclassification of other expenses, depreciation and provisions is given as follows:
Element Total Fixed VARIABLE
On purchases On sales
Other expenses
Depreciation
provisions
11,860,000
700,000
100,000
4,800,000
700,000
100,000
1,750,000 5,310,000
TOTAL 12,660,000 5,600,000 1,760,000 5,310,000
The forecast of the year 2017 are given as follows:
-
Margin on variable cost is 25% of the turnover
-
Annual fixed charges of 6,000,000F for a turnover less than 40,000,000F
-
Annual fixed charges of 11,000,000F for a turnover of equal to or greater than 40,000,000F
First work required:
1.1. Present the differential management account knowing that the revenues on additional activities
(rentage) would permit to reduce the fixed cost. (8marks)
1.2. Determine the break-even point (BEP) (2 marks)
1.3. Determine the turnover which can permit to realize a profit of 3,000,000F (2marks)
1.4. Determine by calculation, the break-even point in cases where the turnover is more or less than
40,000,000F (4marks)
1.5. Show the graphical representation of the solution of 1.4 above. (2 marks)
1.6. Let’s assume that:
- The sales are regulated within 11 months (close in February)
- The forecasted turnover is 55,000,000F
- Determine the date that the BEP will be attained. (2marks)
THE UNIVERSITY OF BAMENDA
FACULTY OF ECONOMICS AND MANAGEMENT SCIENCES
2
nd
Semester Exam Course: Managerial Accounting: ACCT308
Credit Value:
Course Lecturers:
Time: Course Status: Date:
Venue: Instruction:
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Question two; (15 marks)
The company BUH-LENGI, located in KUMFUTU is a manufacturing company. Its total
overhead costs at various levels of activities are presented as follows:
MONTHS MACHINE HOURS TOTAL OVERHEAD COSTS (FCFA)
January 50,000 162,000
February 40,000 140,600
March 60,000 183,400
April 70,000 204,800
Assume that the overhead costs consist of utilities, supervisory salaries and
maintenance. The proportion of these costs at the 40,000 machine-hours level of activity is:
Utilities (V) 42,400FCFA
Supervisory salaries (F) 39,300FCFA
Maintenance (M) 58,900FCFA
Total overhead costs 140,000FCFA
V = Variable; F = Fixed; M = Mixed
The company wants to break the maintenance cost into its basic variable and fixed cost
elements.
Second work required;
1.1. As shown above, overhead costs in April amounted to 208,800 FCFA. Determine how much
this consisted of maintenance cost. (Hint; to do this, it may be helpful to first determine how
much of 204,800 FCFA consisted of utilities and supervisory salaries. Think about the behavior
of variable and fixed costs within the relevant ranges) (6marks)
1.2. By means of high-low method, determine the cost formula for maintenance. (6 marks)
1.3. What maintenance cost would you expect to be incurred at an operating activity level of 80,000
machine hours? (3 marks)
Section B: BUDGETARY ANAGEMENT
Maigod Ltd is a company located in Bamenda and registered under the actual tax system. The
company is specialized in the production and selling of two types of mattress (the uncovered
M1 and the covered M2). For your recruitment as the accountant of the company, you were
submitted a file containing:
- File one: production budget
- File two: cash budget
File one: 15 marks
The production of M1 and M2 passes through two workshops W1 and W2. For the monthly
productions and sales, you were provided with the following information:
Unit contribution margin: M1:5,400F and M2: 7,500F
Unit production needs of finished products per workshop;
Finished products Workshop 1 Workshop 2
M1 120 minutes 4 kg
M2 1 hour 2 kg
✓ Workshop capacities: maximum of 4,000 hours in workshop 1 and 2,000 kg in workshop 2
✓ Other information: minimum production of 500 units of M1 and no limit for M2
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Third work required:
1.1. Determine the objective function. (2 marks)
1.2. Express in form of in-equations all the nec1cessaries constraints, (2marks)
1.3. Present the production program for the two products. (2 marks)
1.4. Using the graphical method (with 1cm = 500 on axes
a. Present the feasibility or the solution zone (4 marks)
b. Determine the optimal solution. (3 marks)
1.5. Can Maigod ltd maximizes profit if the production manager decides to produce 300M1 and
5,000M2? Why?
File two: (20 marks)
For the first semester 2017, the forecasting for M2 was as follows;
✓ Unit selling price tax exclusive: 30,000F
periods January February March April May June
Quantities to be
sold
1,000 800 600 500 700 1,200
Purchase tax
exclusive
23,850,000 14,310,000 17,887,500 11,925,000 19,080,000 11,925,000
✓ Wages expenditures; 1,000,000F of wages are paid on the last day of each month
✓ Income tax: installment of 2.2% of monthly turnover is paid on or before the 15
th
of the
following month
✓ Dividend of 2016 to be received in March 2017, 1,000,000F
✓ VAT due of a month is paid on or before the 15
th
of the following month
✓ All purchases made are settled 30 days after the day of purchase
✓ All sales realized are done by cash (payment the same day)
✓ Initial cash balance as at 1/1/2017: 1,700,000F
✓ Only 80% of VAT paid on purchases are recoverable.
Fourth work required: present for the first semester 2017;
4.1. The cash receipt budget. (3 marks)
4.2. The VAT budget (5 marks)
4.3. The cash disbursement budget (5 marks)
4.4. The cash budget (4 marks)
4.5. Appreciate the forecasted cash situation of Maigod Ltd and make necessary suggestions to
management for the 1
st
semester 2017 (3marks)
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