PRINCIPLES OF MANAGEMENT ACCOUNTING

QUIZ 1

Submission time: July 11, 2021 (2pm)

Question 1 Team Move produces standardized wardrobe for middle class workers. The company's Total cost (TC) function for a month is estimated as: TC=8,000+2,000Q (where Q represents quantity of wardrobe set sold).

Monthly fixed cost recur for the entire year.

A wardrobe set is sold at Ghc6,000.

Required: a. Prepare a statement of profit and loss for a year if Team Move sells 30 sets of wardrobe in a year. b. How many sets of wardrobe should team Move sell in a year in order to that they will neither make profit nor loss? c. How many sets of wardrobe should Team Move company sell in order to achieve annual after tax profit of Ghc60,000 ?

10 marks

Question 2 Calming Cuizines operates a sunday special restaurant. The business did not maintain detailed cost sheet. The following data was provided for the recent past 3 years Qty Profit Sales Units Ghc Ghc 2,000 8,000 4,0000 1,500 4,000 30,000 1,200 1,600 24,000 Required: a. Express the cost function of the company in the form: TC= TFC+VcQ

b. Estimate the profit if the company serves 1,600 plates of food.