QUESTION ONE a) Explain the meaning and significance of the following terms in the context of the cost-volume profit analysis: i) C.V.P analysis. ii) Margin of safety iii) Contribution margin per unit (3 Marks) b) The following data relates to output and total cost of Simba Moja limited over the past 6 months period; Period 1 2 3 4 5 6 Outputs (Units000) 12 13 11 14 13 15 Total costs (Sh000) 900 1,100 700 1,300 1,100 1,500 REQUIRED Using the linear expression of the form Y=a+bx, compute the variable cost per unit and fixed cost using i). High-low method (3 Marks) ii). Regression analysis (3 Marks) iii) What will be the total cost for the 7th month if output is 17,000 units? (2 Marks) Question Two a) State and explain three assumptions that underlie the cost-volume-profit analysis. (3 Marks) b) Centermo Company has 3 major products whose contribution margins are shown below; Products (Shs) A B C Sales price 15 10 8 Variable cost per unit 10 6 5 Contribution per unit 5 4 3 Total fixed costs is Ksh 100,000 Calculate i. Break-even point for each product (3 Marks) ii. Profit for each product at 30% above BEP (3 Marks) QUESTION Three a. Briefly describe the following concepts i. Relevant costing ii. Differential costs iii. Fixed costs iv. Flexible budget (4 Marks) b) Using suitable illustrations, describe relevant and irrelevant costs for decision making purposes (4 Marks) c) Explain the following decision making rules i. Maximin rule ii. Minimax regret rule iii. Maximax rule iv. Expected value (2 Marks