Unknown Course Unknown Question Paper

1. (a) Explain the term break-even with an example. (b) Khan companion's contribution format income statement for the most recent year is given below for the year ended December, 2025: | | Total | Per unit | % of Sales | | :------------------- | :---------- | :--------- | :---------- | | Sales (10,000 Units) | Tk.5,00,000 | 50 | 100 | | Variable expenses | 3,00,000 | 30 | ? | | Contribution margin | 2,00,000 | 20 | ? | | Fixed expenses | 1,70,000 | | | | Net operating income | 30,000 | | | Management is anxious to increase the company's profit and has asked for an analysis of a number of items. Required: I. Compute the company's CM ratio and variable expenses ratio. II. Compute the company's break-even point in both units and sales taka. III. Assume that sales increase by Tk.1,00,000 next year. If cost behavior patterns remain unchanged, by how much will the company's net operating income increase? Use the CM ratio to compute your answer. IV. Assume that next year management wants the company to earn a profit of at least Tk.50,000. How many units will have to be sold to meet this target profit? [CLO-3: L-3] 2+2+2+2+2 = 10 marks 2. (a) Identify the reasons for Material Price variance. (b) From the following information of Shovon Com. Ltd. calculate the variances: a) Labor Cost Variance b. Rate of Pay Variance c. Efficiency Variance d. Mix Variance e. Yield Variance f. Idle time variance Standard Labor Cost of 100 Units: | Item | Rate/Quantity | Total | | :------------------- | :------------ | :---------- | | Skilled Worker 720 hours | @ Tk.3 | = 2,160 | | Unskilled Worker 630 hours | @ Tk.2 | = 1,260 | | | 1,350 | 3,420 | Actual Labor Cost of 100 Units: | Item | Rate/Quantity | Total | | :------------------- | :------------ | :---------- | | Skilled Worker 650 hours | @ Tk.3.5 | = 2,275 | | Unskilled Worker 950 hours | @ Tk.1.0 | = 950 | | | 1,600 | 3,225 | Abnormal idle time of 20 hours for both skilled and unskilled workers [CLO-3: L-3] 2+8=10 marks 3. Aziz Manufacturing Company manufactures and sells a single product. The following costs were incurred during the company's first year of productions-2025: Variable cost per unit: Direct materials Tk.10.00 Direct labor Tk.8.00 Variable manufacturing overhead Tk.5.00 Variable selling and administrative Tk.4.00 Fixed costs per year: Fixed manufacturing overhead Tk.2,50,000 Fixed selling and administrative Tk.1,00,000 During the year, the company produced 30,000 units and sold 25,000 units. The selling price of the company's product isTk.50 Per unit. Required: You are required to prepare an income statement under the following methods (a) Absorption costing and (b) Direct costing. [CLO-4: L-3] 5 + 5 = 10 marks 4. The following information at 50% capacity is given. Prepare a flexible budget and forecast the profit or loss at 60%, 75%, and 85% capacity of Kajol Manufacturing company-2025. Fixed Expenses: Salaries Tk.50,000 Rent and Taxes Tk.40,000 Depreciation Tk.60,000 Administrative Exp. Tk.30,000 Variable Expenses: Materials Tk.2,25,000 Labor Tk.2,50,000 Others Tk.35,000 Semi-Variable: Repairs Tk.1,25,000 Indirect labor Tk.1,50,000 Others Tk.90,000 It is estimated that fixed expenses will remain constant at all capacities. Semi-variable expenses will not change between 45% and 60% capacity, will rise by 10% between 60% and 75% capacity, a further increase of 5% when capacity crosses 75%. Estimated sales at various level of capacity are: 60% = Tk.11,00,000, 75% = Tk.13,00,000 and 85% = Tk.15,00,000/- [CLO-4: L-5] 10 = 10 marks