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Q1. The following data has been taken from the records of ABC Company for the year 2015:

Month	Units Produced	Total Cost (SAR)
January	3,500	35,500
February	3,750	35,750
March	4,000	36,000
April	4,250	36,250
May	4,500	38,000
June	4,750	43,000
July	2,750	32,000
August	3,250	32,500

Required:

Using the high-low method of analysis, find out variable cost, fixed cost and determine a cost function.

Answer:

Q2. MNM Corporation provides you the following accounting information related with a particular product:

Particulars	Amount (SAR)
Selling price per unit	500
Variable cost per unit	200
Total fixed cost	240,000

Use cost volume profit analysis to answer the following questions:

1. Determine the break-even point in units?
2. Determine the break-even point in sales value SAR?
3. What will be the pretax profit if company sells 1,200 units of the product?
4. How many units the company will be required to sell to reach a target pretax profit of SAR 150,000?

Answer:

Q3. X Ltd. makes metal products and sells a metal product for SAR 150 per units. The companys variable cost is SAR 35 per units and total fixed cost are SAR 51,750. The companys estimated next year budgeted sales are 1,500 units. You are required to calculate:

1. Degree of operating leverage
2. Margin of safety in units
3. Margin of safety in SAR value