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    Bmac5203 Assg

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    Madhu Sudhan
    This document contains an assignment submitted by a student named Y Nirmala Yellamalai for their BMAC 5203 Accounting for Business Decision Making course. The assignment contains questions related to sales, production, materials, and cash budgets. It also includes questions on break-even analysis, margin of safety, operating leverage, and references used to complete the assignment. The assignment provides the student's responses to budgeting and analytical questions relating to accounting concepts used for business decision making.

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    Bmac5203 Assg

    Uploaded by

    Madhu Sudhan
    140 views8 pages
    This document contains an assignment submitted by a student named Y Nirmala Yellamalai for their BMAC 5203 Accounting for Business Decision Making course. The assignment contains questions related to sales, production, materials, and cash budgets. It also includes questions on break-even analysis, margin of safety, operating leverage, and references used to complete the assignment. The assignment provides the student's responses to budgeting and analytical questions relating to accounting concepts used for business decision making.

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    BMAC5203 ASSG

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    This document contains an assignment submitted by a student named Y Nirmala Yellamalai for their BMAC 5203 Accounting for Business Decision Making course. The assignment contains questions related to sales, production, materials, and cash budgets. It also includes questions on break-even analysis, margin of safety, operating leverage, and references used to complete the assignment. The assignment provides the student's responses to budgeting and analytical questions relating to accounting concepts used for business decision making.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    140 views8 pages

    Bmac5203 Assg

    Uploaded by

    Madhu Sudhan
    This document contains an assignment submitted by a student named Y Nirmala Yellamalai for their BMAC 5203 Accounting for Business Decision Making course. The assignment contains questions related to sales, production, materials, and cash budgets. It also includes questions on break-even analysis, margin of safety, operating leverage, and references used to complete the assignment. The assignment provides the student's responses to budgeting and analytical questions relating to accounting concepts used for business decision making.

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    of 8

    OUM BUSINESS SCHOOL

    SEPT 2016

    BMAC 5203
    ASSIGNMENT 2

    ACCOUNTING FOR BUSINESS DECISION MAKING

    NAME : Y NIRMALA YELLAMALAI


    MATRICULATION NO : CGS01164101
    IDENTITY CARD NO. : 811030-08-5690
    TELEPHONE NO. : 019-2010565
    E-MAIL : nirmus2430@yahoo.com
    LEARNING CENTRE : GREENHILL LEARNING CENTER
    Question 1

    A) Sales Budget (In Units & Ringgit)

    Quarter
    1st 2nd 3rd 4th Year
    Sales in Unit 2000 6000 8000 4000 20,000
    Price Per Unit 25 25 25 25 25
    Sales In RM 50,000 150,000 200,000 100,000 500,000

    B) Cash Receipts Budget

    Quarter
    1st 2nd 3rd 4th Year
    Accounts Receivable 4th
    Quarter 2016 40,000 40,000
    1st Quarter Sales
    60%X 50000 30,000 30,000
    40% X 60,000 20,000 20,000
    2nd Quarter Sales
    60%X 150,000 90,000 90,000
    40% X 150,000 60,000 60,000
    3rd Quarter Sales
    60%X 200000 120,000 120,000
    40% X 200,000 80,000 80,000
    4th Quarter Sales
    60%X 100000 60,000 60,000
    Total Cash Collection 70,000 110,000 180,000 140,000 500,000

    2
    C) Production Budget

    Quarter
    1st 2nd 3rd 4th Year
    Budget Sales 50,000 150,000 200,000 100,000 500,000

    Add:Desired Ending Inventory 15000 20000 10000


    Total Needs 65,000 170,000 210,000 100,000 500,000
    Less: Beginning Inventory 200 15,000 20,000 10,000 200
    Required Production 64,800 155,000 190,000 900,000 499,800
    D) Direct Material Budget
    Quarter
    1st 2nd 3rd 4th Year
    Production 64,800 155,000 190,000 90,000 499,800
    Materials Per Unit(Kilogram) 2 2 2 2 2
    Productions Need 129,600 310,000 380,000 180,000 999,600

    Add: desired Ending Inventory 31,000 38,000 18,000 99,960


    Total Needed 160,600 348,000 398,000 279,960 999,600
    Less: Beginning Inventory 480 31,000 38,000 18,000 99,960
    Materials To Be Purchased 160,120 317,000 360,000 261,960 899,640

    E) Cash Disbursement Budget


    Quarter
    1st 2nd 3rd 4th Year
    Accounts Receivable 4th
    Quarter 2016 10,980 10,980
    1st Quarter Purchases
    70%X 800600 560,420 560,420
    30% X 800,600 240,180 240,180
    2nd Quarter Purchases
    70%X 158,5000 1,109,500 1,109,500
    30% X 158,5000 475,500 475,500
    3rd Quarter Purchases
    70%X 1800000 1,260,000 1,260,000
    30% X 1800000 540,000 540,000
    4th Quarter Purchases
    70%X 1309800 916,860 916,860
    Total Cash Collection 571,400 1,349,680 1,735,500 1,456,860 5,113,440

    3
    Question 2

    Variable Cost Ratio : Total Variable Cost


    A)
    Total Sales

    : 120,000
    200,000

    : 60%

    Contribution Margin Ratio : Contribution Ratio


    Sales

    : 80,000
    200,000

    : 40%

    B)

    Sales = Variable Expenses + Fixed Expenses + Profits


    Where:
    Q: Number of Bikes Sold
    RM 20 : Unit Sales Price
    RM 12 : Total Variable Cost
    RM64000 : Total Fixed Expenses

    RM 20 Q = RM12Q + RM64000 + 0
    RM8Q = RM64000
    Q = 8000 Units (Break- even in Units)

    Sales = Variable Expenses + Fixed Expenses + Profits


    Where:
    X : Total Sales Dollars
    0.60 : Variable Expenses As Percetage of Sales
    RM64000 : Total Fixed Expenses

    X = 0.60X + RM64,000 +RM 0


    0.40x = RM64,000
    X = RM160,000 (Beak-Even In RM)

    4
    C) Sales = Variable Expenses + Fixed Expenses + Profits
    RM20Q RM12Q + RM64000+RM30000
    =
    RM8Q RM94,000
    =
    Q 11750 Units
    =

    D)
    Total Total(RM) Per
    (RM) Unit
    Sales 225,000 200,000 RM20
    Total Variable Cost 135,000 120,000 RM12
    Contribution Margin 90,000 80,000 RM8
    Total Fixed Cost 64,000 64,000
    Operating Income 26,000 16,000

    * additional profit that Mira would earn is RM10,000

    5
    E)
    Margin of Safety = Totals Sales - Break-Even Sales
    RM200,000 - RM160,000
    RM40,000 (In RM)

    Margin Of Safety = Projected Units - Break-even Units


    = 10,000- 8,000
    = 2,000 ( In Units)

    F)
    Original (30 % Increased )
    Total(RM) Total (RM)
    Sales 200,000 260,000
    Total Variable Cost 120,000 156,000
    Contribution
    Margin 80,000 104,000
    Total Fixed Cost 64,000 64,000
    Operating Income 16,000 40,000

    Operating Leverage = Contribution Margin


    Net Income
    = 80,000
    16,000
    = 5

    (i)% Change in Operating Income= 5.0 x 30%


    = 150%

    (ii)Expected Operating Income = 16,000 + (1.5 X 16,000)


    = RM 40,000

    6
    Reference:

    Dr .Jaspal.Singh (April 2016). Accounting For Decision Making (1st ed.). London: Open
    University Malasysia

    Share research (2016). . Retrieved from http://www.academia.edu

    Share research (2016). . Retrieved from http://www.books.google.sg

    Share research (2016). . Retrieved from http://www.accountingtools.com.my

    Share research (2016). . Retrieved from http://www.wikepedia.com

    Share research (2016). . Retrieved from http://www.investopedia.com

    7
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