 |
BAC621C-BUSINESS ACCOUNTING 2B-2ND OPP-JULY 2022 |
|
|
1 Page 1 |
▲back to top |
nAmlBIA unlVERSITY
OF SCIEnCE TECHnDLOGY
FACULTYOF COMMERCEH, UMANSCIENCESAND EDUCATION
CENTRE FOR ENTERPRISE DEVELOPMENT (CED)
QUALIFICATION CODE: 06DBPM
COURSE CODE: BAC621C
DATE: JULY 2022
DURATION: 3 HOURS
LEVEL: 6
COURSE NAME: BUSINESSACCOUNTING 28
MODE: PM
MARKS: 100
EXAMINER(S)
MODERATOR:
SECOND OPPORTUNITY EXAMINATION PAPER
Sheehama, K.G.H.
Odada, L.
INSTRUCTIONS
1. Answer ALL the questions.
2. Write clearly and neatly.
3. Number the answers clearly.
PERMISSIBLE MATERIALS
1. Examination paper
2. Examination script
THIS QUESTION PAPER CONSISTS OF 10 PAGES (INCLUDING THIS FRONT PAGE}
|
|
2 Page 2 |
▲back to top |
QUESTION 1
(40 Marks)
Answer this question ON the Answer Sheet on Page 8 of this question paper.
In each of the following questions, ON THE ATTACHED ANSWER SHEET(PAGE 11), only draw a cross over
the letter that, in your opinion, represents the correct answer:
1. New - Life Ltd has a maximum capacity of 15 000 units of a certain product per year. Other details
regarding this product are as follows:
Sales (selling price per unit N$50)
N$225 000
Contribution margin per unit
N$20
Fixed costs
N$52 500 per year
The number of units to be sold to earn a target net income of N$15 500 is:
A.
2 625
B.
4 500
C.
3 400
D.
3 500
2. New - Life Ltd has a maximum capacity of 15 000 units of a certain product per year. Other details
regarding this product are as follows:
Sales (selling price per unit N$50)
N$225 000
Contribution margin per unit
N$20
Fixed costs
N$52 500 per year
Break-even point in N$ is:
A.
N$131250
B.
N$130 250
C.
N$130 500
D.
N$131500
3. New - Life Ltd has a maximum capacity of 15 000 units of a certain product per year. Other details
regarding this product are as follows:
Sales (selling price per unit N$50)
N$225 000
Contribution margin per unit
N$20
Fixed costs
N$52 500 per year
|
|
3 Page 3 |
▲back to top |
The number of units New-Tura Ltd should sell to break-even are:
A.
2 525
B.
2 565
C.
2 600
D.
2 625
4. New - Life Ltd has a maximum capacity of 15 000 units of a certain product per year. Other details
regarding this product are as follows:
Sales (selling price per unit N$50)
N$225 000
Contribution margin per unit
N$20
Fixed costs
N$52 500 per year
Variable cost ratio to sales is:
A.
100%
B.
60%
C.
40%
D.
25%
5. New - Life Ltd has a maximum capacity of 15 000 units of a certain product per year. Other details
regarding this product are as follows:
Sales (selling price per unit N$50)
N$225 000
Contribution margin per unit
N$20
Fixed costs
N$52 500 per year
Contribution margin ratio to sales is:
A.
40%
B.
60%
C.
50%
D.
100%
|
|
4 Page 4 |
▲back to top |
6. New - Life Ltd has a maximum capacity of 15 000 units of a certain product per year. Other details
regarding this product are as follows:
Sales (selling price per unit N$50)
N$225 000
Contribution margin per unit
N$20
Fixed costs
N$52 500 per year
Number of units sold during the period are:
A.
15 000
B.
4 500
C.
5 400
D.
3 500
7. Fast-But-Sure Ltd. makes a high-quality wooden birdhouse; and during the month of May 2022
there were 4 000 units sold. The firm had generated a revenue of N$180 000, during the month of
May 2022. Contribution margin ratio to sales is 40%, and fixed costs total N$50 000 per month.
Break-even point in N$ is:
A.
N$150 000
B.
N$180 000
C.
N$125 000
D.
N$145 000
8. Fast-But-Sure Ltd. makes a high-quality wooden birdhouse; and during the month of May 2022
there were 4 000 units sold. The firm had generated a revenue of N$180 000, during the month of
May 2022. Contribution margin ratio to sales is 40%, and fixed costs total N$45 000 per month.
Break-even point in units are:
A.
2 500
B.
2 000
C.
3 000
D.
4 500
9. Fast-But-Sure Ltd. makes a high-quality wooden birdhouse; and during the month of May 2022
there were 2 000 units sold. The firm had generated a revenue of N$90 000, during the month of
May 2022. Contribution margin ratio to sales is 40%, and fixed costs total N$25 000 per month. Due
to an increase in demand, the company estimates that sales will increase by N$37 500 during
|
|
5 Page 5 |
▲back to top |
the next month. By how much should net income increase (or net loss decrease) assuming that
fixed costs do not change?
A. N$11000
B. N$26 000
C. N$15 000
D. N$25 000
10. Fast-But-Sure Ltd. makes a high-quality wooden birdhouse; and during the month of May 2022
there were 2 000 units sold. The firm had generated a revenue of N$90 000, during the month of
May 2022. Contribution margin ratio to sales is 40%, and fixed costs total N$25 000 per month. Net
profit for the month of May 2022 is:
A.
N$27 000
B.
N$11000
C.
N$11500
D.
N$36 000
11. Nawa CCproduces and sells only one product. The following budgeted data is available:
Inventory levels (2022}
1 May
31 May
Raw material (kilograms)
2 000
1 200
Finished products (units)
????
1500
Sales sold 3 600 units at N$150 per unit
Production units 3 800
The units of opening inventory (finished goods) are .....
A.
2 000
B.
1000
C.
1500
D.
1300
12. Wana CCproduces and sells only one product. The following budgeted data is available:
Inventory levels (2022}
1 June
31 June
Raw material (kilograms)
2 000
1 000
Finished products (units)
1 000
1 200
Budgeted sales 3 800 units
|
|
6 Page 6 |
▲back to top |
The budgeted production in units are .....
A.
4 000
B.
4 500
C.
5 300
D.
4 300
13. Wana CCproduces and sells only one product.
The following budgeted data is available:
Inventory levels (2022)
Raw material (kilograms)
Finished products (units)
Budgeted sales N$108 000
Production units 3 800
lJune
2 000
1000
Budgeted selling price per unit is...
A.
N$30
B.
N$25
C.
N$36
D.
N$40
31June
1000
1200
14. Vati-vati CC produces and sells only one product. The following
information is available
Standard cost
Direct Materials
Direct Labour
2.5kg per unit @ N$30 per kg
2 hours per unit @ N$50 per hour
Inventory levels (2022)
Raw material (kilograms)
Finished products (units)
Budgeted sales- April 2022
1 800 units at N$300 per unit
1 April
1000
500
30 April
600
600
Budgeted production units are .....
A.
1500
B.
1300
C.
1800
D.
1900
|
|
7 Page 7 |
▲back to top |
15. Vati-vati CC produces and sells only one product. The following
information is available
Standard cost
Direct Materials
Direct Labour
2.5kg per unit@ N$30 per kg
2 hours per unit @ N$50 per hour
Inventory levels (2022)
Raw material (kilograms)
Finished products (units)
Budgeted sales - April 2022
1 800 units at N$300 per unit
1 April
1000
500
30 April
600
600
Budgeted direct labour hours required to meet a production are ....
A.
3 300
B.
3 800
C.
3 900
D.
3 500
16. Vati-vati CC produces and sells only one product. The following
information is available
Standard cost
Direct Materials
Direct Labour
2.5kg per unit @ N$30 per kg
2 hours per unit@ N$50 per hour
Inventory levels (2022)
Raw material (kilograms)
Finished products (units)
Budgeted sales - April 2022
1 800 units at N$300 per unit
1 April
1000
500
30 April
600
600
Total budgeted direct labour cost is ....
A.
N$110 000
B.
N$190 000
C.
N$360 000
D.
N$180 000
17. Standard direct materials are 10kg at N$30 per kg; and actual direct materials are12kg at N$25 per
kg. Budgeted production units and actual production units are 600 units and 500 units, respectively.
The direct material price variance is .....
A.
N$36 000
B.
N$35 500
|
|
8 Page 8 |
▲back to top |
C.
N$30 000
D.
N$30 500
18. The following data relates to the Assembly Department of Katutura Manufacturer Limited:
Standard direct materials are 10kg at N$30 per kg; and actual direct materials are12kg at N$25 per
kg. Budgeted production units and actual production units are 600 units and 500 units, respectively.
The actual direct materials {kgs) used in production process are.....
A.
6 800
B.
6 000
C.
6 500
D.
6 200
19. The following data relates to the Assembly Department of Katutura Manufacturer Limited:
Standard direct materials are 5kg at N$30 per kg; and actual total direct materials are 3 000kg at
N$25 per kg. Actual production units are 500 units. The direct material usage variance is....
A.
N$15 500
B.
N$13 000
C.
N$12 500
D.
N$12 000
20. Vinia CCproduces and sells only one product.
The following information is available
Standard cost:
Direct Labour
2 hours per unit @ N$20 per hour
Actual direct labour production:
Direct labour cost
N$275 000
Direct labour rate per hour N$25
Actual production units 15 000
The actual direct labour hours are .....
A.
12 000
B.
12 500
C.
11000
D.
11500
|
|
9 Page 9 |
▲back to top |
QUESTION 2
{20 Marks)
Leader Ltd manufactures a single product. The budget information for the following year
was as follows:
Per unit
Sales at N$23.50 per unit
fil
23.50
Production costs:
Direct material - 5 kg @ N$2 per kg 10.00
Direct labour -1 hour @ N$5 per hour 5.00
Variable overheads -1 labour hour 2.00
10 000 units
fil
235 000
100 000
so000
20 000
By the end of the year, the following actual figures were recorded:
Actual production
Direct material
Direct labour
11000 units
54 000 kg at N$27 500
10 500 hours at N$57 750
REQUIRED:
2.1 Calculate the following variances:
1. Direct material price
(4)
2. Direct material usage
(4)
3. Direct labour rate
(4)
4. Direct labour efficiency
(4)
2.2 What is a variance and why is it important to calculate and analyse variances? (4)
|
|
10 Page 10 |
▲back to top |
QUESTION 3
(40 Marks)
Angie Silva has recently opened The Sandal Shop in Rundu, a store that specializes in
fashionable sandals. Angie has just received a degree at the Polytechnic and she is
anxious to apply the principles she has learned. In time, she hopes to open a chain of
sandal shops. As a first step, she has prepared the following analysis for her new store:
N$
Sales price per pair of sandals
Variable expenses per pair of sandals
Contribution margin per pair of sandals
Total fixed expenses
400
160
240
60 000
REQUIRED:
3.1 Calculate Variable cost ratio and contribution ratio.
(4)
3.2 Calculate how many pairs of sandals must be sold each year to break even. Also
state what this represents in total dollar sales.
(6)
3.3 Angie has decided that she must earn at least N$31 200 the first year to justify her
time and effort. Calculate how many pairs of sandals must be sold to reach this
target profit.
(4)
3.4 Angie now has two salespersons working in the store - one full time and one part
time. It will cost her an additional fixed cost of N$75 000 per year to convert the
part-time position to a full-time position. Angie believes that the change will bring
in an additional N$120 000 in sales each year. Make a recommendation whether she
should convert the position. (assuming current sales value is N$320 000 before
additional N$120 000)
(10)
3.5 Refer to the original data. During the first year, the store sold only 300 pairs
of sandals and reported the following operating results:
N$
Sales (300 pairs)
Less: variable expenses
Contribution margin
120 000
(48 000)
72 000
Less:Total fixed expenses
(60 000)
Net income
12 000
3.5.1
3.5.2
Calculate the store's degree of operating leverage.
(3)
Angie is confident that with a more intense sales effort and with a more
creative advertising program she can increase sales by 25% next year.
Calculate the net income by using the degree of operating leverage. (3)
3.6
Discuss five important assumptions underlying the cost-volume-profit analysis. (10)
The End!
10