QUESTION 21 Arma Ltd manufactures notebooks and is considering increasing the price by 20p per unit for the coming month This is expected to lead to fall in demand by 2.000 units. Currently Proje cted 30.000 Demand units 28 000 units Selling price 2 Cost per unit of Arma implemented the price increase, operating profit is expected to (2 marks) increase by 2.000 Increase by 1.200 decrease by 14.200 4 None of the above 2 points QUESTION 22 Answer questions 22 & 26 using the information below: MyCarShop is a chain of used car-dealers with showrooms in Leicester, Derby and Chesterfield and a separate Head Office. The management accountant is reviewing the profitability of each showroom. The rent and staff costs incurred by each showroom can be saved in the event of closure. Marketing costs are allocated to each showroom, but would not be saved, if any shop were to close. Head office cost is charged at a rate of 7% of sales The data regarding costs and sales revenues for each showroom are presented below Chesterfield 1,230 1,184 78 E000 Leicester Derby Sales 1,500 1375 Cost of sales 1,250 1.240 Rent of showroom 50 Showroom staff 21 28 salaries Marketing costs 45 22 What type of costs are the marketing costs (1 mark)? 12 18 Sunk Relevant c. Opportunity Non relevant points 1 points QUESTION 23 The total costs to process the beginning 7,000 units in progress was 21,000. 38,000 units were started and completed. There were no ending units in progress. Costs added during the period were: materials, 78,000, and labour and overhead, 36,000. The change in the per unit cost of the units started and completed and the beginning units completed is (2 marks): a. 0.5 decrease b. No change 10 increase d. 2.7 increase MyCarShop is a chain of used car-dealers with showrooms in Leicester, Derby and Chesterfield and a separate Head Office. The management accountant is reviewing the profitability of each showroom. The rent and staff costs incurred by each showroom can be saved in the event of closure. Marketing costs are allocated to each showroom, but would not be saved. if any shop were to close. Head office cost is charged at a rate of 78 of sales The data regarding costs and sales revenues for each showroom are presented below. 2000 Leicester 1.500 1.250 1,375 Chesterfield 1,230 1,154 1.240 so 57 78 Cost of sales Rent of showroom Showroom staff salaries Marketing costs 21 28 12 45 22 18 What are the total relevant costs for each showroom, as ordered in the table above (1 mark) 1275 1.240 1357 1.292