Question

NO PHOTO OR HANDWRITING CLEAR SCHEDULE

YOU CAN PUT ANY FIGURE ITS ASSUMPTIONS

1. Akbar Company is producing two types of products i.e. Product A and Product B. You are required to show quantitative analysis of one constrained resource i.e. total available machine hours. The following is a contribution income format of the company.                                                                                                  

(use your own figures in the following table)

	Product A	Product B
Selling Price Per Unit
Variable Cost Per Unit
Contribution Margin Per unit
Contribution Margin Ratio
Required Machine Hour/Unit

            Assume a figure for total available machine hours as a constrained resource.

            Determine the following:

1. What is the total contribution margin if only Product A is produced?
2. What is the total contribution margin if only Product B is produced?

Solution: The answers of all the students will differ.

2. Prepare a cash flow statement from the following information under indirect method.

(Assume your own figure)                                                                              

	Amount ($)
Net Income
Cash and Cash Equivalent in the beginning
Amortization of Intangible Assets
Depreciation
Gain on sale of furniture
Purchase of Machinery
Borrowed from Bank
Issued Preference Shares
Increase in Receivable
Decrease in Outstanding Expenses
Depreciation Expense
Sale of Furniture

Solution: There will be different answers for all students.

3-You are required to allot the support department cost to operations department by taking any Saudi based operating company.

Solution: There will be different answers for all students.

Answer 1

ANSWER TO QUESTION NO 1.

ANSWER TO QUESTION NUMBER 2.

ANSWER TO QUESTION NUMBER 3.

SUPPORT DEPARTMENT COSTS ARE NOT DIRECTLY LINKED TO PRODUCTION.WE NEED TO INCUR THESE COSTS IRRESPECTIVE OF OUR ACTUAL PRODUCTION.EXAMPLE:RENT

FORMULA TO DIVIDE COST

TOTAL COST INCURRED IN THE DEPARTMENT/NUMBER OF UNITS PRODUCED .