1- Differentiate between incremental cost and avoidable cost. (M – 3)
2- Margin of safety Rs. 75000
Budgeted sales Rs. 650000
Calculate Margin of safety Ratio. —– (M – 3)
3- Give the formulas of the following:
Production budget
Sales budget —– (M – 3)
4- Hussain Corporation annually produces 10,000 units of assembly part number 206. An outside supplier has offered to manufacture the part at Rs. 9 per unit. If Hussain Corporation decides to buy the part, they will be able to rent the existing area for Rs. 8,000 per year. Listed below are Hussain’s total costs to produce part 206:
| Rs. | Total (Rs.) | |
| Direct material | 2.50 | 25,000 |
| Direct Labor | 4.00 | 40,000 |
| Variable overhead | 2.25 | 22,500 |
| Fixed Overhead | 0.75 | 7,500 |
| Total | 9.50 | 95,000 |
Assuming that no additional costs are incurred in purchasing the part, what should be the opportunity cost for Hussain Corporation if it will buy? Support your answer with computations. (M – 5)
5- Following cost were incurred during a period.
Direct material cost Rs. 4000000
Direct labor and FOH Rs. 3000000
Beginning inventory cost Rs. 1000000
Ending inventory cost Rs. 2000000
Ending inventory decreased by Rs. 75000
How much was the sales for that period? (M – 5)
6- One question was about calculating profit under absorption costing method. (M – 5)
(You will find full question in uzair hussain’s mgt402 solved subjective file)
7- T & M Wild Corporation anticipates sales of Rs. 9, 00,000 for the current year. The percentage of gross profit from sales has been 40% in past years. Operating expenses are expected to be Rs. 2, 00,000, of which 45% is administrative expenses and 55% is selling expenses. Assuming 40% tax rate. Prepare a Budgeted income statement for the for the T & M Wild Corporation year 2009. (M – 5)
8- There are two approaches of accounting treatment of ‘’By-Product’’ define it. (M – 5)