• Use the following data which have been provided by the company On December , 2020 to help it identifying some financial information regarding its manufacturing operations. In order to do so you have to:
• Apply a range Management accounting techniques including: 1-Methods of pricing decisions (Absorption Cost Method & marginal Cost Method) 2- Contribution Margin calculation. 3- Break-Even Analysis 4-Target Profit Analysis 5-The Margin of Safety
• Calculate costs using appropriate techniques of cost analysis. (Absorption & marginal)
• Produce financial reports (marginal income statement and absorption income statement)
• Interpret the use and data presented in both statements.

Marginal cost Method

Account	Balance	Cost classification Based on Behaviour	Cost classification Based on Functions	Exclude or include in the cost classification
Direct material per unit	9
Direct Labour per unit	6
Variable Manufacturing Overheads	3
Variable Administrative and Selling expenses	1.5
Fixed Manufacturing Overheads	60,000
Fixed Administrative and Selling expenses	20,000
Number of units	100,000
Expected (Budgeted Sales)	20,000
Target profit	400,000

1. Cost per unit =
2. Contribution margin % =
3. Price =

Prepare income statement under marginal costing

Income Statement	Calculation	In total

Absorption cost Method

Account	Balance	Cost classification Based on Behaviour	Cost classification Based on Functions	Exclude or include in the cost classification
Direct material per unit	9
Direct Labour per unit	6
Variable Manufacturing Overheads	3
Variable Administrative and Selling expenses	1.5
Fixed Manufacturing Overheads	60,000
Fixed Administrative and Selling expenses	20,000
Number of units	100,000
Expected (Budgeted Sales)	20,000
Target profit	400,000

1. Cost per unit =
2. Contribution margin % =
3. Price =

Prepare income statement under absorption costing

Income Statement	Calculation	In total

1. Contribution margin
2. Contribution margin ratio
3. Breakeven point Quantities (BEQ)
4. Breakeven point sales $
5. Margin of safety ( quantities )
6. Margin of safety %units
7. Margin of safety in sales dollars
8. Margin of safety in sales dollars%
9. Target profit in quantities

Target profit in sales