Costing Part Fma
Costing Part Fma
Lukuta has been operating a small scale enterprise involved in the selling of oranges to
various customers in Chilenje South. Lukuta , with the assistance of a friend , has
prepared the following budget for the year 31st December, 2018.
Required
(c) Calculate the number of units required to be sold in order to meet a profit target of
K60,000
(d) Calculate the Break – even Point if the selling price was increased by 15% and variable
costs are reduced by 2%. Fixed costs remain unchanged .Discuss the limitations of Break
– Even Analysis.
QUESTION TEN – NOVEMBER 2017
Martina Phiri Mudede plans to start a small shop selling bread in January, 2018. She has
budgeted for the following for the year ended to 31st December, 2018.
Required
(a) Calculate the Break – Even Point in Quantity and in value terms.
(c ) Calculate the number of units required to be sold in order to meet a profit target of
K10,000
(d) Calculate the Break – Even point if the selling price was increased by K2.00
(e) Discuss the factors that a manager should take into account in deciding whether to
close down department or cease production of a product.
QUESTION ELEVEN – MAY 2017
Kalunga has been operating a small scale enterprise involved in the selling of Chikanda
to students at University of Lusaka. Chikanda is sold in pieces of equal weight . For the
year to 31st December, 20017 , the following budgeted information is available.
Required
(a) Calculate the break Even point in pieces and in value terms.
(c) Calculate the number of units required to be sold in order to meet a profit target of
K50,000
(d) Calculate the Break – Even Point if the selling price was increased by 10%.
(e) Discuss the uses , underlying assumptions and limitations of Break – Even Analysis.
TUTORIAL EXAM QUESTION
Cranks Machine Parts Limited is a spare parts manufacturing company. The following budget
information relates to the assembling department for the year to 31st December 2015:
Required:
a) Calculate the overhead absorption rates for the assembling department using each of the
following methods:
i. Direct material cost
ii. Direct labour cost
iii. Prime cost
iv. Direct labour hours
v. Machine hours.
b) If the budgeted selling price per unit is K200.00, prepare the budged statement of
comprehensive income for the year ending 31st December 2015 using:
i. Marginal costing
ii. Absorption costing using direct labour hours absorption rate
TUTORIAL EXAM QUESTION
Looking ahead to the financial year ending 31 March 2012, the directors of Problems Limited are faced
with a budgeted loss of K10,000. This is based on the following data.
Contribution 20,000
The directors would like to aim for a profit of K20, 000 for the year to 31 March 2012. Various
proposals have been put forward, none of which require a change in the budgeted level of fixed costs.
These proposals are as follows:
Required:
(ii) The number of units required to be sold in order to meet the profit target.