subject: management accounting

QUESTION 1 A. Cost volume profit analysis is a technique that examines how profit change with the changes in sales volumes, cost and selling price. Explain the assumptions that used in this analysis. (10 marks) B. Margin of safety is the excess of budgeted sales over the break-even volume of sales. Discuss the significant of having margin in safety by giving an example. (5 marks) QUESTION 2 A. Budget provides a comprehensive financial overview of planned company operations. Discuss with examples the key factors for budgets. (15 marks) B. Sales budget is the result of decisions to create conditions that will generate a desired level of sales. Discuss at least FIVE (5) factors to consider when doing the sales forecasting. (15 marks) QUESTION 3 A. Budget variances is the differences between budgeted and the actual amounts. Discuss by giving examples what causes this variance and explain the meaning of "management by exemption". (10 marks) B. Explain the limitation for the management who used the budgetary control as performance evaluation and measurement. (10 marks) N MHT2133 QUESTION 4 A. The management used cost and efficiency standards to control the business activity. Explain the differences between cost variance and efficiency variance by giving examples in product cost. (10 marks) B. Explain the benefit of having a standard cost system. (10 marks) QUESTION 5 Managers usually follow a decision model for choosing among different courses of action. Management accountants analyze and present relevant data to guide managers' decisions. Discuss the five-step decision-making process by giving example where appropriate. (15 marks)