Question 1

a. Prince Rupert special events society is planning to run Winter Fest in Prince Rupert. They are planning to hire local band and they have given quotation of fixed amount of $ 60,000.

i. If 60 people attend the Fest, what would be the total cost? And the unit cost per person?

ii.If 200 people attend the Fest, what would be the total cost? And the unit cost per person?

iii.Should the manager be using the total cost or the unit cost in the decision making in the above scenario?

b.Are the following cost fixed or variable, direct or indirect for a baking company?

i. Accounts manager's salary ( sales manager)

ii. Flour used in making croissants

iii.Bakery manager's salary

iv.Depreciation of commercial ovens used in baking.

v.Wages of bakers who are paid on a piecework basis

2. Question 2

a. Please complete the following table.

Case	Revenues	Variable Cost	Fixed Cost	Total cost	Operating Income	Contribution Margin %
A	$ 8,000	$	$ 800	?	?	40%
B	$ ?	$ 6,000	?	$7,000	$14,000	?
C	$ 6,000	?	$4,000	?	$ 500	?

b. Rupert fish sells average fish for $ 12.00 which it purchases from various individuals for $ 5.00 each. Rupert fish has to pay $ 1,000.00 for rent every month, utilities of $ $500.00 and salary of $ 12,000 every month. The income tax rate is 10%.

i. How many fish does Rupert fish need to sell to breakeven per month?

ii.How many fish does Rupert fish needs to sell to get operating income of $ 5,000

iii. How much fish does Rupert fish needs to sell to get after tax net income of $ 4,900. Assume tax rate as 11%

3. Question

a. Which one would be better for the following companies (Job Costing or Process Costing) and why and why not?

i. Royal Dutch Shell ( an integrated oil and gas production company)

ii. Rupert automobile repair

iii. MNP ( does accounting/auditing services)

iv.Valeant Pharmaceutical company ( pharmaceutical )

v.Rupert furniture manufacturer.

4. Question 4 ( 20 marks)

Rupert wood and furniture produces tables and chairs.

	Tables	Chairs
No of production per year	30,000	45,000
Direct Lumber Cost	$ 150,000	$ 110,000
Direct labor hours	3,100 hours	4,200 hours
Direct labor cost	$ 3,100,000	$ 4,200,000
Machine hours	40,000	60,000
No of production run	35	35
Inspection hours	900	700

Total manufacturing cost is as follows;

Machining cost: $ 200,000

Setup cost: $ 98,000

Inspection Cost: $ 60,000

Calculation:

a. Choose a cost driver for reach overhead cost pool and calculate the manufacturing overhead cost per for each manufacturing cost.

b. Calculate manufacturing cost for each product.

5.Question

a) Rupert store in Prince Rupert sells 11,000 diet free coca cola for $ 4 each and 12,000 regular coca-cola for $ 3.5 each in 2019. Because of new regulation and awareness among consumer consumer are decreasing consumption of regular coca-cola and is expected to decrease by 10% next year. However, awareness of sugar is expected to result in a 7% increase in diet coca-cola volume. Rupert store feels that if they lower his price for regular coca cola to $ 3.40 per can, he will have to face only a 4% decline in coca-cola sales in 2020.

Required; - Prepare a 2020 sales budget for Rupert store assuming that Rupert store prices at 2019 levels. - Prepare a 2020 sales budget for Rupert store assuming that Rupert store lowers the price of a regular coca cola to $ 3.40 per can.

- Should Rupert store lower the price of a regular coca cola to $ 3.40 per can if its goal is to maximize sales revenue?

b) What is budgetary slack and what are the advantages and disadvantages of budgeting?