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Cost and Sales Details of Product X The following are some of the cost and sales details of Product X being manufactured by Oman Ceramic

Cost and Sales Details of Product X

The following are some of the cost and sales details of Product X being manufactured by Oman Ceramic Tiles Company LLC for the period August 2020

(b) Costs and Sales Details of Product Y

Product Y is manufactured by the Company as well.The cost and sales details of Product Y are given below:

(c) Performance of two subsidiary companies of OCTC

OCTC has two subsidiary companies (A & B).The cost and sales details of the current situation and proposed situations are given below:

The top management of both the companies (A & B) wants to evaluate both existing and proposed situations based on the information given above.

Required

(1) Business decisions are crucial for any organization.For making good and approximate decisions, role of information is vital.Management accounting helps an organization to be more focused and goal oriented.

In this context, Discuss the role of management accountants highlighting the benefits of management accounting mechanism for an organization like OCTC (15 marks)

(2) Prepare the schedule of cost of goods manufactured for Product X based on the information given above in (a). (10 marks)

(3) For Product Y (as given above in b), calculate the following

(i) Breakeven Point in units (5 marks)

(ii) Determine the operating income for the current situation given in b above: (5 marks)

(iii)Calculate the sales (units) required to earn a profit of $ 1,000,000.Prove your answer (10 marks)

(4)Compute the operating leverage for the two subsidiaries of OCTC (Company A and Company B) for both the situations given (existing & proposed) and comment on the leverage

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