Part A. Question 1:. Concept Of Management Accounting:.

1029 WordsMay 1, 20175 Pages
Part A Question 1: Concept of management accounting: “Management Accounting is the utilization of proper strategies and ideas in preparing chronicled and anticipated financial information of a substance to help administration in setting up arrangements for sensible monetary goals really taking shape of judicious choices with a view towards these destinations." Management accounting helps organizations to generate and preserve value: Management accounting provides information for three major purposes as follow: 1. External reporting: These reports are utilized financial specialists, leasers, government experts, and other outside gatherings. 2. Routine internal reporting: These reports which are intermittently created are utilized by…show more content…
otal Sales price per unit 60 180 200 (-) Variable Cost per unit (30) (60) (140) contribution 30 120 60 sales mix 3 2 1 6 Weight contribution 90 240 60 390 Weighted Average Contribution per unit = Total weighted contribution _______________________ Total weights = 390 ________ = $ 65per unit 6 Break Even Point (Units) = Fixed Costs _______________________ Weighted Average Contribution per unit = 162,500 __________ = 2500 units 65 Proof: Information A B C Total Sales units A – 2500 x 3/6 B – 2500 x 2/6 C – 2500 x 1/6 1250 833 417 2500 Sales 75,000 149,940 83,400 308340 Less: Variable Cost 37,500 49,980 58,380 145860 Contribution 453,750 99,960 25,020 162480 Less: Fixed Cost 162500 Operating Income 0 (approx.) Question 3 (ii): Break Even Point (Units) = Fixed Costs + Target Profit ____________________________ Weighted Average Contribution per unit = 162,500 + 227,500 _________________ = 6,000 units 65 Break Even Point ($) Information A B C Total Sales units A – 6,000 x3/6 B –6,000 x 2/6 C –6,000 x 1/6 3000 2000 1000 6,000 Sales 180,000 360,000 200,000 740,000 Question 4: Exiting situation: Information/Products A B C Sales Units 1500 1000 500 3000

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