Q 1

• Cost volume profit analysis is a technique that examines how profit changes with the changes in sales volumes, cost and selling price. Explain the assumptions that were used in this analysis.

• Margin of safety is the excess of budgeted sales over the break-even volume of sales. Discuss the significance of having margin in safety by giving an example.

Q 2

• Budget provides a comprehensive financial overview of planned company operations. Discuss with examples the key factors for budgets.

• Sales budget is the result of decisions to create conditions that will generate a desired level of sales. Discuss at least FIVE (5) factors to consider when doing the sales forecasting.

Q 3

• Budget variances is the differences between budgeted and the actual amounts. Discuss by giving examples what causes this variance and explain the meaning of "management by exemption".

• Explain the limitation for the management who used the budgetary control as performance evaluation and measurement.

Q 4

• The management used cost and efficiency standards to control the business activity. Explain the differences between cost variance and efficiency variance by giving examples in product cost.

• Explain the benefit of having a standard cost system.

Q 5.

Managers usually follow a decision model for choosing among different courses of action. Management accountants analyze and present relevant data to guide managers' decisions. Discuss the five-step decision-making process by giving example where appropriate.