[shank68]

QUESTION 1

Sedili enterprise is a manufacturer of school uniforms. The company's income statement for year 2016 is shown below.

Sales (49,000 units @ RM26.00)	RM1,274,000
Cost of goods sold (49,000 units @ RM20.00)	980,000
Gross Profit	294,000
Sales and Administrative expenses	99,000
Net income	RM195,000

The General Manager went to a seminar in management accounting and learn about variable costing method. As he was trying to improve the Company’s profitability, he gathered the following data to assess the behavioural patterns of the cost. The following is incurred:

Direct material, direct labour & variable manufacturing overhead cost	RM15 per unit
Sales and Administrative expenses	RM 1.00 per unit

Required:

a) Compute the cost of a pair of uniforms based on variable costing method.

b) Prepare the income statement for the Company using variable costing approach.

c) Explain why the net income reported under variable costing method different from that recorded by the absorption method (show the calculation the income reconciliation).

d) Based on the answers obtained in (b) and using cost-volume-profit analysis, determine:
i. Break-even point (in unit and ringgit).

ii. Calculate the unit sales given that the Company is targeting an operating income of RM250,000.
iii. The marketing manager believe that an increase of RM 5,000 in advertising expenditures will generate sales of 50,000 units. Should this action be taken? QUESTION 1

Sedili enterprise is a manufacturer of school uniforms. The company's income statement for year 2016 is shown below.

Sales (49,000 units @ RM26.00)	RM1,274,000
Cost of goods sold (49,000 units @ RM20.00)	980,000
Gross Profit	294,000
Sales and Administrative expenses	99,000
Net income	RM195,000

The General Manager went to a seminar in management accounting and learn about variable costing method. As he was trying to improve the Company’s profitability, he gathered the following data to assess the behavioural patterns of the cost. The following is incurred:

Direct material, direct labour & variable manufacturing overhead cost	RM15 per unit
Sales and Administrative expenses	RM 1.00 per unit

Required:

a) Compute the cost of a pair of uniforms based on variable costing method.

b) Prepare the income statement for the Company using variable costing approach.

c) Explain why the net income reported under variable costing method different from that recorded by the absorption method (show the calculation the income reconciliation).

d) Based on the answers obtained in (b) and using cost-volume-profit analysis, determine:
i. Break-even point (in unit and ringgit).

ii. Calculate the unit sales given that the Company is targeting an operating income of RM250,000.
iii. The marketing manager believe that an increase of RM 5,000 in advertising expenditures will generate sales of 50,000 units. Should this action be taken?

[paraclete]

This your assignment not ours but you might want to take a second look at some of these numbers

[shank68]

Thanks for the reply

RM = Ringgit Malaysia (Malaysian Currency)

If you could send me the solution/answer... I will be really thanking you.

Tq.

[ma0641]

Sorry, we don't do your work. You do the problem first, give us your answers and we can see what is needed.

[paraclete]

Thanks for the reply

RM = Ringgit Malaysia (Malaysian Currency)

If you could send me the solution/answer... I will be really thanking you.

Tq.

I don't supply model answers, now for some of those ringgit I might be persuaded to work on it