Account paper

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EXAMINATION
SEMESTER II ACADEMIC SESSION 2012-2013
MASTER IN BUSINESS ADMINISTRATION EXECUTIVE

APRIL 2013

DURATION: 3 HOUR

COURSE CODE

:

ZCZA 6213

COURSE TITLE

:

ACCOUNTING FOR DECISION MAKING

INSTRUCTIONS

:

1.

There are FOUR (4) questions.

2.

Answer ALL questions in the provided answer booklet.

3.

Total marks are 100.

This paper consists of 6 printed pages excluding this cover page

0

QUESTION 1 (25 MARKS)
La Diva Dress Shop produces custom designed dresses for retail sales on the premises. Costs incurred during last month include the following:
Costs of fabric used in dress
Wages of dressmakers
Wages of dress designers
Wages of sales personnel
Wages of designers who
…show more content…
(7 marks)
b) Suppose sales revenue are RM200,000 greater than expected. What would the total profits be? (3 marks)
c) Calculate the margin of safety in sales revenue.
(3 marks)
d) How many units must be sold to earn an after tax profit of RM180,000. Assume the income tax rates is 40 per cent.
(5 marks)
e) Suppose the company’s income tax rises to 45 per cent. What will happen to the breakeven level of Katayama Company?
(2 marks)
f) If Katayama’s variable manufacturing costs increase by 10 per cent, calculate the selling price that would yield the same contribution margin ratio as expected.
(5 marks)

3

QUESTION 4 (25 MARKS)
PART A (18 MARKS)
Fun Sporty Company manufactures toys and sporting equipment, including golf kits for preschoolers. A national sporting goods chain recently submitted a special order for 7,600 golf kits. Fun Sporty was not operating at capacity and could use the extra business. Unfortunately, the order’s offering price of RM16.50 per golf kit was below the cost to produce the sets. The controller was opposed to taking a loss on the deal. However the personnel manager argued in favour of accepting the order even though a loss would be

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