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CAH610S-COST AND MANAGEMENT ACCOUNTING FOR HOSPITALITY TOURISM-2ND OPP-DEC 2025 |
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nAmlBIA unlVERSITY
OF SCIEnCE Ano TECHnOLOGY
FACULTY OF COMMERCE, HUMAN SCIENCES AND EDUCATION
DEPARTMENT OF HOSPITALITY AND TOURISM
QUALIFICATION:
BACHELOR OF CULINARY ARTS & BACHELOR OF TOURISM INNOVATION AND DEVELOPMENT
QUALIFICATION CODE: 07BCNA & 07BTID
COURSE CODE : CAH610S
SESSION: DECEMBER 2025
DURATION: 3 HOURS
LEVEL: 6
COURSE NAME: COST & MANAGEMENT
ACCOUNTING FOR HOSPITALITY & TOURISM
PAPER: THEORY AND CALCULATIONS (PAPER 2)
MARKS: 100
SECOND OPPORTUNITY EXAMINATION QUESTION PAPER
EXAMINER
Gerhardt Sheehama
MODERATOR Lameck Odada
INSTRUCTIONS
• Answer ALL FOUR (4) questions in blue or black ink only. NO PENCIL.
• Start each question on a new page, number the answers correctly and clearly.
• Write clearly, and neatly showing all your workings/assumptions.
• Work with at least four (4) decimal places in all your calculations and only round off only
final answers to two (2) decimal places.
• Questions relating to this examination may be raised in the initial 30 minutes after the start
of the examination . Thereafter, candidates must use their initiative to deal with any
perceived errors or ambiguities and any assumptions made by the candidate should be
clearly stated .
PERMISSIBLE MATERIALS
• Silent, non-programmable calculators
THIS QU ESTION PAPER CONSISTS OF _8_ PAGES (including this front page)
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QUESTION 1
(30 MARKS)
Each of the following questions (1.1 - 1.15) has only ONE correct answer. Please answer
this question ON the answer sheet provided. E.g., 1. D
1.1 A company has fixed costs of N$60 000 per annum. It manufactures a single product
which it sells for N$20 per unit. Its contribution to sales ratio is 40%. The company's
break-even point in N$ is :
A. N$240 000
B. N$260 000
C. N$160 000
D. N$150 000
1.2 A company manufactures a single product which it sells for N$160 per unit. Fixed
costs are N$76 800 per month and the product has a contribution to sales ratio of
40%. In a period when actual sales were N$224 000, the company's margin of safety
was :
A. N$192 000
B. N$32 000
C. N$96 000
D. N$128 000
1.3 Fast-Food Ltd supplied the following details regarding its product:
Selling price per unit
Variable production cost per unit
Variable selling cost per unit
Fixed production cost per year
Fixed selling costs per year
Contribution margin per unit is:
N$60.00
N$12.00
N$4.00
N$35 800
N$6 000
A. N$16
B. N$56
C. N$44
D. N$48
The following details refer to questions 1.4 and 1.5:
Jairus Ltd currently sells 2 500 pairs of shoes per year. Other details for the past year are as
follows:
Selling price per pair of shoes N$400
Purchase cost per pair of shoes N$250
Annual fixed costs:
Salaries
N$130 000
Advertising
N$40 000
Miscellaneous
N$70 000
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1.4 The company's break-even in number of shoes is:
A. 1200
B. 1400
C. 1 600
D. 960
1.5 Assume that for the next year an additional fixed advertising campaign costing
N$17 400 is proposed, whilst at the same time selling price is increased by 12%. In
this case the new contribution margin per pairs of shoes will be:
A. N$150
B. N$198
C. N$155
D. N$195
1.6 A company that manufactures a single product supplied the following budgeted details:
~
Selling price per unit
150
Variable costs per unit:
Direct material
30
Direct labour
40
Variable overheads
20
Fixed overheads per month 40 000
During the past month, 3 000 units were manufactured while only 2 400 units were sold.
The net income for the month was:
A. N$360 000
B. N$144 000
C. N$140 000
D. N$104 000
1.7 A company that manufactures a single product supplied the following budgeted details:
~
Selling price per unit
150
Variable costs per unit:
Direct material
30
Direct labour
40
Variable overheads
20
Fixed overheads per month 40 000
During the past month, 3 000 units were manufactured while only 2 400 units were sold.
Total contribution margin for the month was:
A. N$360 000
B. N$144 000
C. N$140 000
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D. N$104 000
1.8 A company that manufactures a single product supplied the following budgeted detai
~
Selling price per unit
150
Variable costs per unit
Direct material
30
Direct labour
40
Variable overheads
20
Fixed overheads per month
40 000
During the past month, 3 000 units were manufactured while only 2 400 units were sold.
Total variable cost per unit for the month was:
A. N$95
B. N$70
C. N$90
D. N$20
1.9 Neumeister Ltd has a maximum capacity of 20 000 units of a certain product per year.
Other details regarding this product are as follows:
Selling price
N$250 per unit
Variable manufacturing cost
N$50 per unit
Variable marketing and administrative costs
N$120 per unit
Total fixed costs
N$105 000 per year
Because of a material shortage, only 2 000 units are expected to be sold this year.
Management has also estimated that total fixed costs will increase by N$20 000 per
annum. Sales price will remain at N$250 per unit. In order to earn a net income of
N$35 000 .
The new total contribution margin must be:
A. N$105 000
B. N$140 000
C. N$160 000
D. N$150 000
1.10 Neumeister Ltd has a maximum capacity of 20 000 units of a certain product per year.
Other details regarding this product are as follows :
Selling price
Variable cost
Variable marketing and administrative costs
Fixed factory overheads
Fixed marketing and administrative costs
N$250 per unit
N$170 per unit
N$120 per unit
N$60 000 per year
$45 000 per year
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Because of a material shortage, only 2 000 units are expected to be sold this year.
Management has also estimated that total fixed costs will increase by N$20 000 per
annum . Variable cost per unit will remain at N$250 per unit. In order to earn a net
income of N$35 000.
The new selling price per unit must be:
A. N$250 per unit
8. N$340 per unit
C. N$240 per unit
D. N$255 per unit
1.11 A firm's telephone account would normally be classified into the following category:
A. Fixed cost
B. Vari able cost
C. Stepped fixed cost
D. Semi-variable/mixed cost
E.
Questions 1.12 and 1.13 are based on the following :
Bushbuck Ltd supplied the following figures regarding the number of units produced during
the past six months together with the corresponding production cost:
Production units Production cost (NS)
2 000
64500
1000
60 000
3 000
68 000
2 000
65 000
4 000
72 000
5 000
75 000
1.12 According to the high-low method of separating fixed and variable costs, the variable
cost rate is :
A. N$1.75 per unit
B. N$4.75 per unit
C. N$2 .75 per unit
D. N$3 .75 per unit
1.13 According to the high-low method of separating fixed and variable costs, the fixed
cost is :
A. N$56 250
B. N$42 250
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C. N$37 500
D. N$47 500
1.14 The following statement is NOT true:
A. Selling expense is an example of a non-manufacturing cost.
B. Prime cost consists of direct material plus direct labour
C. If production increases, total fixed costs will remain constant but will decrease per unit.
D. If production increases, total fixed costs will remain constant but will increase per unit.
1.15 Under-recovery of overheads occurs when:
A. The basis of allocating overheads has changed during the period
B. Actual overheads have fallen in relation to what they were expected to be
C. The amount of budgeted overheads is less than the actual overheads incurred.
D. The amount of overheads charged to production is lower than the actual
overheads incurred.
(15 x 2 marks = 30 marks]
QUESTION 2
{20 MARKS)
The Patio is a manufacturer of garden furniture that has consistently used weighted average
costing (AVCO) in valuing inventory. The management of the Patio are now interested in
knowing the effect of using FIFO in valuing inventory instead of using AVCO. The following
transactions for the Patio were recorded for the period:
2 August Opening inventory
100 units @N$50 per unit
5 August Received
120 units @N$57.50 per unit
6 August Issued/sales
200 units
7 August Received
180 units @N$60 per unit
8 August Issued/sales
150 units
9 August Return to supplier units purchased on 7 August 20 units
REQUIRED:
Prepare an inventory ledger card of the Patio for the month of August using
a) four columns showing the date, receiving, issuing, and balancing columns.
Each column contains quantity, unit price and the total amount
Calculate the gross profit of the Patio. Assume that the selling price is N$300
b)
per unit.
MARKS
14
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QUESTION 3
[24 MARKS]
Chick McFarm has developed a new recipe to cook whole chickens and decides to open a take-way
restaurant in Katutura . Chick McFarm asks NUST for help with the market research. The University
finds that Chick McFarm should sell 700 chickens per month, on average selling price of N$190.
The following monthly variable costs are available:
Cost per chicken
N$45
Other ingredients on average per chicken used in cooking process.
Salt
N$0 .50
Onion powder
N$1.00
Garlic powder
N$1.S0
Olive oil
N$2.00
Chick McFarm provides you with total fixed costs to be occurred in take-way restaurant for
the month as follows :
Chef salary
N$25 000
Supervisor salary
N$50 000
Depreciation of cooking equipment N$15 000
Cleaner salary
N$5 000
REQUIREMENT
MARKS
Prepare the st atements of profit or loss for the period for management using
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the direct costing method.
QUESTION 4
(26 MARKS)
Tech Solutions CC sells "esms" software product for small and medium enterprises. Total sales
revenue for 2023 is N$300 000 based on a selling price of N$300. Variable costs of producing
the software are N$120 per unit sold . Tech Solutions CC annual fixed costs are N$126 000.
The company is planning the following changes:
• to increase the current selling price of its product by 5%.
• A market survey indicates that volume will decrease by 10% at this new price, but that
the lower volume of production will cause fixed costs to decrease by N$6 000 per
year.
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REQUIREMENTS
Advice m,rnagement whether the company should proceed with the changes
a) or not. Support your advice with necessary calculations and reasons for your
answer.
The precision and reliability of CVP analysis are limited by several underlying
b)
assumptions . Identify at least three (3) of these assumptions.
MARKS
20
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END OF EXAMINATION PAPER
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