Question 1: (5 Marks) The Aseel Co. produces 3 products, A, B and C. All are made from the same materials. The company used to use the traditional absorption costing. The company now want to consider the activity-based costing system in order to improve the profitability. The Information for the three products are as following: A B C Production and sales volumes (units) Selling price per unit (OMR) Raw material usage (Kg) per unit Direct labor hours per unit Machine hours per unit 15,000 12,000 18,000 7.500 12 13 2 3 4 0.1 0.15 0.2 0.5 0.7 0.9 Number of productions runs per year 16 12 8 Number of purchase orders per year 24 28 42 Number of deliveries to retailers per year 48 30 62 The price of the raw material remains constant throughout the year at OMR 1.200 per Kg. Similarly, the direct labor cost for the whole workers is OMR 14.00 per hour. The annual overhead cost will be as following: OVERHEADS Machine Setup costs Machine running costs Procurement Costs Delivery Costs OMR 26,550 66,400 48,000 54,320 Required: (a) Calculate the full cost per unit for products A, B and C under traditional absorption costing, using direct labor hours as the basis for apportionment. (b) Calculate the full cost per unit of each product using activity-based costing. Question: 2 (5 marks) Expected sales for the next (5) months (February - Jun,2016) in "CNN" company is as the following: (by Units) Feb March 20000 U. 22000 U. April May June 25000 U. 28000 U. 30000 U. Expected sale price per a unit is OMR 4 for the first (3) months and expected to increase by 10% for the next (3) months. Sales policy is to receive 30% of the sales in cash at the same month of sale, 40% in the next month, and the rest in the third month. Purchases cost is expected to be 60% of each month sales and is paid completely a month after the purchases. Other cash incomes: Rent to be received OMR 3,000 in May and OMR 5000 in July Loan is expected to be borrowed in May OMR 10000. Interest is to be received OMR 4,000 on May and OMR 4000 in July Other expenses: Wages 25% of each month sale and is paid in the same month. Rent OMR 12,000 paid on March and OMR 10,000 on June Taxes OMR 5000 to be paid in two equal parts in May and July, Other Miscellaneous OMR 5000 is paid monthly Opening balance: for April is OMR12,000. Instructions: 1-Prepare the Cash Budget for the second quarter of 2016(April-June)? QUESTION 3 (5 marks) The following information furnished by Ravi Sharma Manufacturing for measuring financial performance by calculating the ratios. The list of assets, equity and liability is given below:- Assets Land and Building Plant and Equipment Furniture and Fitting Inventories Accounts and other receivables Cash Bank Amount (OMR) 400,000 250,000 35,000 200,000 55,000 20,000 50,000 Equity & Liabilities Equity Share Capital 400,000 Bonds Payable 200,000 Accounts Payable 220,000 Outstanding expenses Short term Bank borrowing The list of Income statement items is given below:- 40,000 150,000 Sales Cost of goods sold Amount (OMR) 1,650,000 300,000 65,000 35,000 20,000 30,000 45,000 General and Administrative Expenses Selling and Marketing Expenses Depreciation Expenses Interest Expenses Taxes Additional Information: 1. Dividend paid by the company in the year 2020 is RO 15,000 2. The face value of each share is RO 0.500. 3. The market price of shares at end 2020 is RO 0.500. Requirement: You are required to calculate:- 1. Earnings per share 2. Interest cover 3. Dividend cover 4. Price/Earnings ratio 5. Gross Profit Margin Ratio 6. Operating profit Ratio 7. Return on Assets. 8. Return on Working Capital Ratio 9. Current Ratio 10. Quick Ratio 15 Marks]