PART 1. PROBLEM SOLVING AND SYNTHESIS (50 Marks) Direction: Answer all questions: Show your solutions and discuss your recommendation concisely, if required. 1. Winston Corporation produces and sells a single product. Data concerning that product appear below: (25 Marks) Total (In BD) 3,000,000 1,000,000 200,000 Particulars Sales (60.000 units) Direct Materials Direct Labor Manufacturing Overhead: Variable Fixed Selling & Administrative: Variable Fixed 300,000 400,000 400,000 100,000 Required: A. As a management accountant, what strategy will you adopt in ascertain the following performance indicators for the company? (1 mark each=5 marks) 1. Unit contribution margin. 2. Contribution margin ratio. 3. Break-even in sales (BD). 4. Margin of safety percentage. 5. Break-even in units B. Assume that the sales volume increases by 20% with no change in total fixed expenses, what strategic approach will you adopt to determine the operating income? (5 marks). (Marking scheme: Computation = 3, correctness of figures = 2) = a C. If you want the profit percent to increase by 5 percent how much will be the breakeven sales. (5 marks). (Marking scheme: Computation = 3, correctness of figures = 2) D. Now assume that your variable cost per unit has decreased by BD 6.67 and your overall fixed expense increased by 100,000 calculate the new breakeven level in units and break even in sales. (5 marks). (Marking scheme: Computation = 3, correctness of figures = 2) E. As a managerial accountant, write a strategic recommendation to the management board to show how the breakeven point as found in (d) can be achieved (5 marks) (Marking scheme: Content quality = 2, appropriateness = 3) 2. Super Bike Manufacturing Company presents the following data for 2020: Opening inventory 0 Units Sales 8,000 Units Production 10,000 Units Units Sold 8,000 Units Direct materials BD 240 Direct labor BD 280 Variable manufacturing overhead expenses BD 100 Variable selling and administrative expenses BD 40 Fixed manufacturing overhead expenses BD 1200,000 Fixed selling and administrative expenses BD 800,000 You are required to do the following: A) How much is the product cost using; a. Variable Costing b. Absorption Costing B) Prepare the income statement using; a. Variable Costing b. Absorption Costing Rubric for A and B C) Explain why there is a difference in the net income in the two approaches to costing using the relation of cost to inventory. PART 1. PROBLEM SOLVING AND SYNTHESIS (50 Marks) Direction: Answer all questions: Show your solutions and discuss your recommendation concisely, if required. 1. Winston Corporation produces and sells a single product. Data concerning that product appear below: (25 Marks) Total (In BD) 3,000,000 1,000,000 200,000 Particulars Sales (60.000 units) Direct Materials Direct Labor Manufacturing Overhead: Variable Fixed Selling & Administrative: Variable Fixed 300,000 400,000 400,000 100,000 Required: A. As a management accountant, what strategy will you adopt in ascertain the following performance indicators for the company? (1 mark each=5 marks) 1. Unit contribution margin. 2. Contribution margin ratio. 3. Break-even in sales (BD). 4. Margin of safety percentage. 5. Break-even in units B. Assume that the sales volume increases by 20% with no change in total fixed expenses, what strategic approach will you adopt to determine the operating income? (5 marks). (Marking scheme: Computation = 3, correctness of figures = 2) = a C. If you want the profit percent to increase by 5 percent how much will be the breakeven sales. (5 marks). (Marking scheme: Computation = 3, correctness of figures = 2) D. Now assume that your variable cost per unit has decreased by BD 6.67 and your overall fixed expense increased by 100,000 calculate the new breakeven level in units and break even in sales. (5 marks). (Marking scheme: Computation = 3, correctness of figures = 2) E. As a managerial accountant, write a strategic recommendation to the management board to show how the breakeven point as found in (d) can be achieved (5 marks) (Marking scheme: Content quality = 2, appropriateness = 3) 2. Super Bike Manufacturing Company presents the following data for 2020: Opening inventory 0 Units Sales 8,000 Units Production 10,000 Units Units Sold 8,000 Units Direct materials BD 240 Direct labor BD 280 Variable manufacturing overhead expenses BD 100 Variable selling and administrative expenses BD 40 Fixed manufacturing overhead expenses BD 1200,000 Fixed selling and administrative expenses BD 800,000 You are required to do the following: A) How much is the product cost using; a. Variable Costing b. Absorption Costing B) Prepare the income statement using; a. Variable Costing b. Absorption Costing Rubric for A and B C) Explain why there is a difference in the net income in the two approaches to costing using the relation of cost to inventory