BKAL1013 BUSINESS ACCOUNTING

SEMESTER A221
BKAL1013 BUSINESS ACCOUNTING
TUTORIAL 1 (TOPIC 9)
SUBMISSION: 15 JANUARY 2023

This tutorial assignment is to be done in a group. Each group will submit ONLY ONE PDF or
EXCEL file to the UUMOL.

PART A : TRUE AND FALSE

1. CVP analysis does not assume that total fixed cost vary inversely with units of output

2. The equation which reflects a CVP income statement is Sales - Variable Costs-Fixed Costs +
Net profit

3. The break-even point is where total sales equals total fixed costs

4. An increase in the unit variable cost will generally cause an increase in the breakeven point

5. The impact on net operating income of any given dollar change in total sales can be
estimated by multiplying the CM ratio by the dollar change in total sales

6. If the variable expense per unit increases and all other factors remain constant, the
contribution margin ratio will increase

7. On a CVP graph for a profitable company, the total revenue line will be steeper than the
total cost line

8. One way to compute the total contribution margin is to add total fixed expenses to net
operating income

9. In two companies making the same product and with the same total sales and total expenses,
the contribution margin ratio will be lower in the company with a higher proportion of fixed
expenses in its cost structure

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10. The break-even point cannot be determined by reading the prior’s year financial statements

11. In evaluating th margin of safety, the break-even point is not relevant

12. The break-even point in units is computed by dividing fixed costsby totl contribution margin

13. In a CVP graph, the break-even point is at the intersection of the sales line and the total cost
line

14. If a company has a CM per unit of RM18 and CM ratio of 40%, the unit selling price is
RM45

15. If a company requires RM850,000 in sales to meet its target profit, has a CM ratio of 30%
and fixed cost of RM150,000, the target nt profit is RM105,000

PART B

Uncle Qi Wang runs a coffee stall. His daily fixed costs are RM40. His variable costs are RM4
per cup of coffee. Uncle Qi Wang sells an average of 80 cups of coffee per day.

REQUIRED:

1. What price would Uncle Qi Wang have to charge per cup of coffee in order to generate a
profit of RM600 per day
2. What price would Uncle Qi Wang have to charge per cup of coffee in order to generate a
total CM of RM600 per day?
3. Assume that Uncle Qi wang wants to charge RM9.00 per cup of coffee and at this price he
can sell 90 cups of coffee daily. What would the variable cost per unit have to be in order to
generate a profit of RM500 per day.
4. Assume that the daily fixed costs are RM50 and Uncle Qi wang wants to charge RM10.00
per cup of coffee. What would be the number of cups of coffee have to be sold in order to
generate a profit of RM610 per day.

END OF QUESTION