managerial accounting

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Assignment -Group-(4%)

Semester : Spring Year / : 2020

Course Title : Managerial Accounting

Course Code : ACT310 Version :

Instructor(s) : Dr. Abdulhadi Ramadan & Dr. Susith Fernando

Date : Start Time :

Duration : No. of Pages : 4 (includes cover page) (Student Must Verify)

To be completed by the students

Student Name Student ID: Section

1.

2.

3.

4.

5.

6.

Grading Scheme

Question Earned Points Max. Points

80

20

Total Earned Points Total Available Points Instructor Signature

100

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Question 1: (75 Marks: 25 each)

Gary’s Pizza delivers pizzas to residences and apartments near a major state university. The

company's annual fixed costs are $72,000. The sales price averages $18, and it costs the firm $6

to make and deliver each pizza.

Required:

A. Determine how many pizzas must Gary sell to break even?

B. Determine many pizzas must the company sell to earn a target profit of $54,000?

C. If budgeted sales total 8,500 pizzas, determine how much is the company's safety margin in

dollars?

Solution:

3

Question 2: (25 Marks)

ABC Corporation's product code. A132 has a negative contribution margin. How can such a

situation arise? Should the company continue to stock and sell this product? Explain.