RUNNING HEAD: Accounting Questions 1

Accounting Questions

Chirayu Bar Singh Thapa

BUS 535: Managerial Accounting

August 18, 2020

Professor: Yvan Nezerwe

Westcliff University
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Abstract

The CLA answers the questions that have been asked. The break even in units is

found of the old machinery mix and then the new machinery mix.

Key Words: Break Even Point, Net Income, Variable Overheads

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1. Predetermined Variable overhead rate allocates the rate which is going to be applied in the

manufacturing over-head costs that are assumed to objects of cost for a significant time

period[ CITATION Hie18 \l 1033 ].

VOH assumption can be seen being 2% of the selling price per unit of a mobile device.

Selling Price/ Unit 100,000

DM 30,000
DL 20,000
VOH per unit 2,000
FOH per quarter 80,000

Sold Units 10
Manufactured Units 10
DM cost 300,000
DL Cost 200,000
Total VOH 20,000
VOH per unit 2,000
Total VC 20,000
Total CoGS 540,000
Sales 1,000,000
Gross Margin 460,000
FC 80,000
Income: 380,000

2.

Exp Adv Purchase

Total 698,000 24,000 34,000 42,5000 90,000 125,000
Adv Dept - (24,000) - 13,200 5,280 5,520
Purchase - - (34,000) 14,620 10,200 9180
Dept
Total 698,000 - - 452,820 10,5480 139700

3. a)

Particular Type Amt/unit Amt/Year

Sales Variable 200 -
DM Variable 65 -
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DL Variable 15 -
Machine Repair Variable 4 -
Depreciation Fixed - 300,000
Utilities Mixed 3 150,000
Plant Salary Fixed - 200,000
Packaging Variable 5 -
Shipping Variable 7 -
Sales Salary Fixed - 250,000
Advertising Fixed - 125,000
Salary Fixed - 241,000
Entertainment Fixed - 90,000

b) Unit Variable Cost:

DM 65
DL 15
MR 4
Utilities 3
Packaging 5
Shipping 7
Total VCPU 99

c) VC 1/5 @ 15,000 units

Sales @ 200 3,000,000

Less: VCPU @ 99 (1,485,000)
Contribution 1,515,000
Less: Fixed Costs
Depreciation 300,000
Utilities 150,000
Plant Salary 200,000
Sales Salary 250,000
Adv. 125,000
Admin Salary 241,000
Entertainment 90,000 (1,356,000)
159,000
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d) BEP = FC/CMPU

= FC/ (Sales – VCPU)

= 1,356,000/ (200-99)

= 13,425.75

= 13,426 units

Sales (13,426 * 200) 2,685,200

VCP (13426 * 99) (1,329,174)
Contribution Margin 1,356,026
Less: FC (1,356,000)
26

e)

12,000 14,000 16,000 18,000

Sales @ 200 2,400,000 2,800,000 3,200,000 3,600,000
VC @ 99 (1,180,000) (1,386,000) (1,584,000) (1,782,000)
CM 1,212,000 1,414,000 1,616,000 1,818,000
Less: FC (1,356,000) (1,356,000) (1,356,000) (1,356,000)
Income (144,000) 58,000 260,000 462,000
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