ACT-500: Managerial Accounting- CT2
Fmm2020
Assignment-CriticalThinking2.docx
Assignment Question(s): [100 marks]
Q1. Discus how static budget failed to analyze cost and revenues variances and how flexible budget has overcame static budgets’ deficiencies and explain how does the flexible budget actually work?
[15 marks]
Q2. Hamed Company is preparing budgets for the quarter ending June 30, 2019.
Budgeted sales in units for the next five months are:
|
April |
May |
June |
July |
|
20,000 |
50,000 |
30,000 |
25,000 |
Required:
a. Prepare Sales budget for April, May & June assuming selling price per unit is SR 15.
[10 marks]
b. Prepare production budget for April, May & June if the company wishes ending inventory as
10 % of next month sales units. [10 marks]
Q3.Oraby Industries is a division of a major corporation. Last year the division had total sales of SAR 23,380,000, operating income of SAR 2,828,980, and invested assets of SAR 10,000,000.
Required:
a. What is the division's profit margin? [5 marks]
b. What is the division's investment turnover? [5 marks]
c. What is the division's return on investment (ROI) using DuPont formula? [5 marks]
d. What is the residual income if investors require a minimum return of 20%? [5 marks]
Q4. Taha Company produces joint three products: Product A, Product B, and Product C.
During the year, joint costs of processing the three products were SAR400, 000. The following information were given to you as follows:
|
Product |
Units Produced |
Selling price per unit at split-off point(SR) |
Expenses per unit after split-off point ( (SR) |
Selling price per unit after split-off point(SR) |
|
A |
400,000 |
20 |
20 |
40 |
|
B |
400,000 |
18 |
15 |
28 |
|
C |
800,000 |
12 |
14 |
17 |
Required:
a. Allocate the joint costs using the physical output method. [15 marks]
b. Allocate the joint costs using the net realizable value method. [15 marks]
c. Allocate the joint costs using sales value at split-off point method. [15 marks]
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