Dear Tutor,

Please kindly help with the 7 questions as shown in attached file.

BMAC5203/HUTECH/JULY/F-KK PART A INSTRUCTIONS Part A contains TWO questions. Answer BOTH questions. QUESTION 1 Marks Setia Selalu Company reports the following results for the month of November: $600,000 420,000 180,000 110,000 $ 70,000 sh is ar stu ed d vi y re aC s o ou urc rs e eH w er as o. co m Sales (10,000 units) Variable costs Contribution margin Fixed costs Net income The management of Setia Selalu Company is considering the following independent courses of action to increase its net income. 1. Increase selling price by 6% with no change in total variable costs. 2. Reduce variable costs to 65% of sales. 3. Reduce fixed costs by $20,000. Required: a) Determine the break-even point in units and $. (6) Th b) If maximizing net income is the objective, which is the best course of action (1, 2 or 3)? Show your working. (9) c) Looking back at each possible course of action (1, 2 or 3), rank the actions according to the level of difficulty in implementing it. Explain two (2) non-financial considerations would affect the decision. (5) (Total: 20) https://www.coursehero.com/file/14082129/BMAC5203-Exam-25-July-2015pdf/ 1 BMAC5203/HUTECH/JULY/F-KK QUESTION 2 Marks ARJIMIM Sdn Bhd has been set up to sell a line of kitchen equipment. The company began its operations on January 2 with the following assets: Cash Inventory Land Buildings and equipment $14,000 $29,000 $31,000 $250,000 (useful life 20 years, no residual value) sh is ar stu ed d vi y re aC s o ou urc rs e eH w er as o. co m Sales for the first quarter (January, February, and March) is expected to be $140,000. The expected sales for the second quarter is $280,000 and for the third quarter is $325,000. Certain expenses are expected to vary with sales as follows: Cost of goods sold Bad debts Variable selling expenses Variable administrative expenses Percent of Sales $ 60 2 14 5 The following are expenses not expected to vary with sales: Selling Administrative Depreciation $25,000 per quarter $18,550 per quarter $3,125 per quarter In addition: Three-fourths of the receivables will be paid in the quarter in which the sale is made and 24 percent in the following quarter. Sixty percent of merchandise purchased and two-thirds of the operating expenses will be paid in the quarter in which the purchase is made, and the balance in the following quarter. The ending inventory of each quarter should be equal to one-third of the amount of estimated cost of sales for the coming quarter. An additional $22,500 equipment investment will have to be made at the end of the second quarter to handle the increased sales volume expected in the third quarter. Th 2 https://www.coursehero.com/file/14082129/BMAC5203-Exam-25-July-2015pdf/ BMAC5203/HUTECH/JULY/F-KK Required: a) Prepare a cash budget for the first and second quarters. (12) b) Assuming that a minimum cash balance of $5,000 is desired at all times, what are the options that you would advise ARJIMIM Sdn Bhd to take at the end of each of the first two quarters? (4) c) Discuss why a cash budget is important to an organisation. Th sh is ar stu ed d vi y re aC s o ou urc rs e eH w er as o. co m (4) (Total: 20) https://www.coursehero.com/file/14082129/BMAC5203-Exam-25-July-2015pdf/ 3 BMAC5203/HUTECH/JULY/F-KK PART B INSTRUCTIONS Part B contains FIVE questions. Answer THREE ONLY. QUESTION 1 Marks sh is ar stu ed d vi y re aC s o ou urc rs e eH w er as o. co m Jamie Teh is the manager of Inhouse Training, a company that provides in-house management development training courses. The company offers two basic training packages: two-day short courses covering topics such as leadership skills, managing change and learning organisations, and five-day courses in areas such as strategic management, total quality management and developing performance measurement systems. Before setting prices for these courses, Jamie Teh bumped into a friend who was a management consultant. He suggested that activity-based costing would provide a more accurate estimate of the costs of the two types of courses. With his help, Jamie Teh has identified the following activities and costs for 2015: Activity Advertising Costs Technical support Hiring of presenters Provision of handouts Activity Cost ($) 150,000 40,000 200,000 20,000 Activity Driver Number of courses Maintenance hours Presentation hours Total pages Expected Quantity 1,200 10,000 16,000 100,000 Additional information related to the training courses: Th Direct materials Direct labour Number of participants Direct labour hours Number of courses Number of maintenance hours Presentation hours Number of pages The company's normal activity is 20,000 direct labour hours. 4 https://www.coursehero.com/file/14082129/BMAC5203-Exam-25-July-2015pdf/ (Two-Day) $ 2,250 $ 3,000 375 90 6 8 180 90 (Five-Day) $ 2,500 $ 1,875 300 110 8 15 150 120 BMAC5203/HUTECH/JULY/F-KK Required: a) Determine the unit cost for each package using direct labour hours to apply overhead. (8) b) Determine the unit cost for each package using the four activity drivers. (8) Which costing method (a) or (b) do you think would provide a more accurate cost information? Explain your answer. (4) (Total: 20) sh is ar stu ed d vi y re aC s o ou urc rs e eH w er as o. co m c) QUESTION 2 Marks Anika Company (Anika) manufactures 30,000 components per year. The manufacturing cost per unit of the component is as follows: Direct materials Direct labour Variable overhead Fixed overhead Total unit cost $10 15 5 8 $38 Assume that the fixed overhead reflects the cost of Anika's manufacturing facility. This facility cannot be used for any other purpose. An outside supplier has offered to sell the component to Anika for $35. Required: Th a) Should Anika purchase or manufacture the component? Show your working. (8) b) Assume that Anika can avoid $200,000 of the total fixed overhead costs if it purchases the components from outside. Determine the effect on income if Anika purchases the component from the outside supplier. (6) c) Identify three (3) qualitative (non-financial) factors that might influence Anika's decision in (a). (6) (Total: 20) https://www.coursehero.com/file/14082129/BMAC5203-Exam-25-July-2015pdf/ 5 BMAC5203/HUTECH/JULY/F-KK QUESTION 3 Marks Hitetel Company has developed the following standard costs for its product for 2015: HITETEL COMPANY Standard Cost Card Standard Price $3 8 4 = Standard Cost $12 24 12 48 sh is ar stu ed d vi y re aC s o ou urc rs e eH w er as o. co m Product A Cost Element Standard Quantity Direct materials 4 pounds Direct labour 3 hours Manufacturing overhead 3 hours The company expected to produce 25,000 units of Product A in 2015 and work 75,000 direct labour hours. Actual results for 2015 are as follows: 26,000 units of Product A were produced. Actual direct labour costs were $630,800 for 76,000 direct labour hours worked. Actual direct materials purchased and used during the year cost $283,500 for 105,000 pounds. Actual variable overhead incurred was $130,000 and actual fixed overhead incurred was $170,000. Required: Compute the following variances, showing all the computations to support your answers. Indicate whether the variances are favourable or unfavourable. Direct materials price variance. Direct material quantity variance. Direct labour rate variance. Direct labour efficiency variance. Provide a possible cause for each of the variances above. Th a) b) c) d) e) 6 https://www.coursehero.com/file/14082129/BMAC5203-Exam-25-July-2015pdf/ (4) (4) (4) (4) (4) (Total: 20) BMAC5203/HUTECH/JULY/F-KK QUESTION 4 Marks a) The general manger of Bulat Sdn Bhd is required to estimate machine-related costs. The cost includes the maintenance cost. Data presented below show the maintenance cost and the machine hour utilised for the first six months: Machine hour utilized (hour) 32,000 37,000 30,000 40,000 47,000 55,000 Maintenance cost ($) 66,340 71,000 64,200 72,343 77,090 80,450 sh is ar stu ed d vi y re aC s o ou urc rs e eH w er as o. co m Month October 2014 November 2014 December 2014 January 2015 February 2015 March 2015 Based on the above information, you are required to use the High-Low method to determine the following: i) Variable cost per unit ii) Fixed costs iii) Cost formula iv) Maintenance cost incurred if 45,500 machine hours are utilised in April 2015. (8) b) Lisa Company makes Vietnamese traditional cloth in Ho Chi Minh City and has the opening and closing inventories for year 2014 as follows: Direct Raw Materials Work in Process (WIP) Finished Goods Beginning ($) 48,000 176,000 128,000 Ending ($) 70,000 150,000 104,000 Th During the year, the following costs were incurred: Raw Material purchased Direct labour cost Factory Overhead $240,000 $360,000 $640,000 Prepare the statement of cost of goods manufactured for Lisa Company for the year ended 31 December 2014. (12) (Total: 20) https://www.coursehero.com/file/14082129/BMAC5203-Exam-25-July-2015pdf/ 7 BMAC5203/HUTECH/JULY/F-KK QUESTION 5 Marks HiLate runs a large number of retail stores. The performance of each store is based on a target return on investment (ROI) of 15%. Store managers will get a bonus of 8% of their salary if their stores annual ROI exceeds the target. HiLite has a store in the center of Ho Chi Minh City. The store's financial data over the past four years is as follows: 2012 180 63 10 60 2013 170 51 8 40 sh is ar stu ed d vi y re aC s o ou urc rs e eH w er as o. co m Sales ($'000) Gross profit ($'000) Net profit ($'000) Operating assets ($'000) Required: a) Calculate the store's financial performance for the last two years using ROI. (6) b) Calculate the store's financial performance for the last two years using Residual Income (RI). The minimum rate of return is 12 %. (6) c) Discuss the performance of this store over the two years period based on your answer in (a). (4) Th d) \"Non-financial measures are equally important in measuring performance.\" Do you agree? Explain. (4) (Total: 20) END OF QUESTION PAPER 8 https://www.coursehero.com/file/14082129/BMAC5203-Exam-25-July-2015pdf/ Powered by TCPDF (www.tcpdf.org)