Reference no: EM132522598

Question 1: You are the New management Accountant of DownTown Micro Ltd, which manufactures a specialized micro chip that enables any ordinary remote control to operate all kinds of televisions. The variable cost of each chip is $25 and the selling price per chip is $40. Due to the entry of a major American player into the U.K. market, this has proven to be quite challenging. The company has an annual fixed cost of $2.5 million, management would like to advise on a break-even output showing your calculations.

Question 2: You are required to discuss budgets and budgetary control to your new head of department who has never thought budgeting was of any kind of importance. Discuss the various functional budgets and discuss the importance of each functional budget and how senior management may use that in support of the development of the organisation. Finally highlight the advantages and the advantages of a budgetary control system.