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3

Intermediate Management Accounting

Copyright 202

1

Chartered Professional Accountants of Canada. All rights reserved.

(CONTINUED ON PAGE

4

)

Constructed

-

Response Questions (

6

questions

120 minutes)

Enter your responses in

one word processor

file

(.docx format) and one spreadsheet

fi

l

e

(.xlsx format)

.

Question 1 (

4

marks)

Pua Kai, the new accounting analyst

at MAUI

Inc., is

budgeting

for

the

upcoming year

and has compiled the following per

-

unit information:

Selling price

$52.50

Direct materials

$15.00

Direct labour

$16.75

Variable overhead

$

9.35

Pua

estimates that the fixed costs for MAUI Inc. are $785,000.

MAUI Inc. is subject to tax at a rate of 32%.

Required:

a)

Calculate MAUI Inc.s break

-

even point in units.

(2

marks)

b)

Calculate the number of units that MAUI

Inc.

must sell in order to earn an af

ter

-

tax

profit of $72,500.