Management Accounting

QUESTION 1 (12 MARKS)

i. Distinguish between financial accounting and management accounting. (4 marks)

ii. Elaborate FOUR (4) stages of evolution of management accounting. (8 marks)

QUESTION 2 (15 MARKS)

Puffler Bhd manufactures a single product called PUFF since 2015. The manager of Puffler Bhd is keen to know the performance of PUFF. He is given the following information for the year 2017 that is based on 50,000 units of production and sales.

Selling price for PUFF is RM50.

Direct costs are RM20.40 per unit.

Manufacturing overhead for the year 2017 is RM350,000. (The variable cost is RM100,000)

Selling overhead is RM220,000. This includes sales commission of 5% on sales value.

General overhead is RM250,000. (The variable cost is RM80,000)

For the year 2022, direct cost is expected to decrease by RM1.50, production and sales units will increase by 20%.

Required:

A. Calculate the followings for the year 2022 and show all your workings.

i. The break-even point (in units and RM value). (6 marks)

ii. The margin of safety (in units). (3 marks)

iii. Profit or loss if the sales volume is 49,375 units. (3 marks)

iv. Number of units that need to be sold if the required profit is RM520,000. (3 marks)

B. State FOUR (4) assumptions of CVP analysis. (4 marks)