Reference no: EM132217158

Question 1

a) Discuss the role of management accounting in the management process?

b) Describe the decision making process

c) The following information is available for XYZ Company

Budgeted activity is expected to average 150,000 units per period and there is no opening stock for period 1. Unit selling price is Ksh 10, Unit variable cost is Ksh 6, fixed costs per period is Ksh 300,000 while non manufacturing overheads are 100,000 per period.

Required:
Prepare a profit and loss statement based on variable and absorption costing 10mks d) KPLC plans inventory levels (at cost) at the end of each month as follows: May, $275,000; June. $220,000; July, $270,000 and August, 240,000. Sales are expected to be June, $440,000: July, $350,000; August, $420,000. Cost of goods sold is 60% of sales. Purchases in April were S250,000; Mav $180,000. Payments for each month's purchases are made as follows: 10% during that month; 80% the next month and the final 10% the next month. Prepare budget schedules for June, July and August for purchases and for disbursement for purchases

Question 2

A company is considering whether to develop a new product or consolidate existing product. New product development can either be undertaken through thorough development at a cost of Shs.150,000 or through rapid development at a cost of Shs 80,000 while product consolidation can either be achieved through strengthening the products at a cost of shs 30,000 or through reaping the products at no extra cost. The following are the expected outcomes, accompanying probabilities and the projected revenue for of the options.

Should the company develop a new product or consolidate existing product?

Question 3
Assume that the product manager of ABC Ltd is concerned about the apparent fluctuations in efficiency and therefore work done by employees which are related to the volume. The result of this in most 12 weeks research carried out is as shown below;

Find the indirect labor costs associated with 90 machine hours and (b) the machine hours that $1,000 of indirect labor cost would produce. Use the regression method 20mks

Question 4

Auto Robot Ltd which manufactures two products P & Q has provided the following information.

                                                                                 P (shs)   Q (shs)

Selling price per unit                                                           10        12

Variable cost per unit                                                           2          8

Fixed cost                                                                      50,000   34,000

Required:-

iv) Calculate the B. E. P. of each product in units and in shs.

v) Calculate the margin of safety if budgeted sales are 10,000 units each

vi) Compute the profit of each product if sales in units are 20% above the B. E. P.

Question 5

Consider the following data concerning Copy Cat Photocopying Limited

Copy cat is trying to decide whether to replace the old equipment. Because of the rapid changes in technology, copy cat expect the replacement equipment to have a 3year useful life only. ignore the effects of taxes