Section "A"

1)Lyka is the brand manager for the Nintendo Wii.She sells her product to Walmart for $199 and Walmart sells it at a retail price of $269 to consumers.Sales were going well; in 2008, Lyka sold 3 million units of the Wii.But now, sales were beginning to slow down.To get sales moving again, Lyka wanted to launch a $20 million advertising campaign targeted to senior citizens which would feature the new Wii Fit game.Lyka knew that her product was very profitable, with variable costs of $100, so it seemed like she could afford to spend money advertising the product.She submitted her advertising plan to her boss Tess.Tess liked the idea, but asked Lyka few questions:

a)How many incremental units of product she would have to sell to breakeven on the advertising investment, and whether this quantity was feasible, given current sales levels.

b) What is the breakeven point?

c) Can Lyka feasibly sell this quantity if she runs her advertising campaign?Why or why not?

2)Analyze the below questions based on equivalent units concept:

a)Suppose you have a work-study job in the office of your college's president, and she asks you to compute the cost of instruction per full-time equivalent student at your college. The college's vice president for finance provides the following information.

Costs:

Total cost of instruction$9,000,000

Student population:

Full-time students900

Part-time students1,000

Part-time students take 60% of the classes of a full-time student during the year.

b)The Mixing Department's output during the period consists of 20,000 units completed and transferred out, and 5,000 units in ending work in process 60% complete to materials and conversions costs.Beginning inventory is 1,000 units, 40% complete to materials and conversion costs.Calculate the equivalent units of production.

3)

a)Discuss briefly the different forms of business organizations prevalent in the UAE.

b)Illustrate the basic difference between Management & Financial Accounting.

4) Northwestern Company sells several products. Information of average revenue and costs are as follows:

Selling price per unit $20.00

Variable costs per unit:

Direct materials $4.00

Direct manufacturing labor $1.60

Manufacturing overhead $0.40

Selling costs $2.00

Annual fixed costs $96,000

a)Calculate the contribution margin per unit.

b)Calculate the number of units Northwestern's must sell each year to break even.

c)Calculate the number of units Northwestern's must sell to yield a profit of $144,000.

d)Calculate Margin of safety in units and percentage terms