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value 6:18 moodle.bbk.ac.uk Required: What is meant by the Break-even point (BEP) for an activity? How is it calculated? Explain why MDG 1.d should know

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value 6:18 moodle.bbk.ac.uk Required: What is meant by the Break-even point (BEP) for an activity? How is it calculated? Explain why MDG 1.d should know the BEP (8 marks) Calculate the BEP for next year, expressed both in quantity of headsets and sales 16 marks) Calculate the level of activity (headsets) that is required to generate profit of 40,000 5 marks) Calculate the margin of safety for next year, expressed both in quantity of headsets and sales value (5 marks) Compare and contrast the incremental budgetary approach to the zero-base budgeting approach to budgeting 16 marks) (Total: 30 marks) Question 13 STV is a building supplies company that sells products to trade and private customers. Budget data for each of the six months to March are given below: Den fer 31 SI Order Kathering Yexcluding special Eighty per cent of the value of credit sales is received in the month after sale, 10 per cent two months after sale and 8 per cent three months after sale. The balance is written off as a bad debi Seventy-five per cent of the value of credit purchases is paid in the month after purchase, and the remaining 25 per cent is paid two months after purchase All other operating costs are paid in the month they are incurred STV has placed an order for four new forklift trucks that will cost 27,500 cach. The scheduled payment date is in February The cash balance at 1 January is estimated to be 25,000. Required: Prepare a cash budget for each of the THREE months of January, February and March (Total: 30 marks) 300 300 31 Code sh 3 230 2 361 120 6:17 moodle.bbk.ac.uk (Total: 40 marks) Section C Answer 1 question from this section. All questions carry the same mark. Total in this section is 30 Marks. Question 12 MDG Ltd makes a standard model of headsets, which it sells to retailers for 60 cach. Next year the business plans to make and sell 20,000 headsets. The business's costs are as follows Manufacturing Variable Variable E14 per hestet Otherwible costs per hohet I Last perde Find per The management of MDG Ltd has little knowledge about management accounting and Required: What is meant by the Break-even point (BEP) for an activity? How is it calculated? Explain why MDG Lid should know the BEP. (8 marks) Calculate the BEP for next year, expressed both in quantity of headsets and sales value marks) Calculate the level of activity (headsets) that is required to generale profit of 40,000 is marks) . Calculate the margin of safety for next year, expressed both in quantity of headsets and sales value (5 marks) Compare and contrast the incremental budgetary approach to the zero-base budgeting approach 10 budgeting 16 marks) (Total: 30 marks) Question 13 STV is a building supplies company that sells products to trade and private customers. Budget data for each of the six months to March are given below: or to Lomaths in a 00 300 31 75 Sedach 20 2100 23 kither Kending depic Habtooth Kiwi Kassles

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