Financial Accounting Exam Question 2022

FINANCIAL ACCOUNTING EXAM

Table of Contents
Question 4........................................................................................................................................3
Question 1........................................................................................................................................4
Question 5........................................................................................................................................5
Question 2........................................................................................................................................7
Reference List..................................................................................................................................9
2

Question 4
a)
Option 1
New s.p(selling price) = {10-(10*1%)} =9
V.c (variable cost) = 150000/20000 =7.5
New contribution = new s.p- v.c = 9-7.5 =1.5
Break even point = fixed cost/ contribution = 40000/1.5 =26667[rounded off]
Option 2
S.P(selling price) = 10
New V.c (variable cost) = 7.5+1.30 = 8.80
New contribution = new s.p- v.c = 10-8.80 = 1.20
Break even point = fixed cost/ contribution = 40000/1.20 = 33333[rounded off]
Option 3
s.p(selling price) = 10
V.c (variable cost) =7.5
New contribution = new s.p- v.c = 10 -7.5 =2.5
New fixed cost = 40000+ 15000 = 55000
Break even point = fixed cost/ contribution = 55000/2.5 = 22000
Option 4
s.p(selling price) = 10
V.c (variable cost) = 7.5
New contribution = new s.p- v.c = 10 -7.5 =2.5
New fixed cost = 40000+22500 =62500
Break even point = fixed cost/ contribution = 62500/2.5 = 25000
b) i.
Cost of machine 68500
Budget 50000
Shortage of fund (685000-50000) =18500
3