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Managerial Accounting Question Paper

Managerial Accounting

Course:Business Management (Business)

Institution: Machakos University question papers

Exam Year:2011

STAGE EXAM JULY
TIME: 2 1/2 HOURS
Answer any five questions

1.a) The following information shows the cost of carrying out medical tests in a hospital.
2008----------Number of patients seen----------Total cost (Sh)
July----------400------------------------------1,050,000
August--------600-----------------------------1,700,000
September-----550-----------------------------2,100,000
October-------800----------------------------2,000,000
November------750---------------------------2,300,000

The hospital uses the high-low method to estimate costs:-

Calculate:
i) variable cost per unit
ii) fixed cost per month
iii) Costs for December 2008 if 950 patients will be attended to.(20 Marks)

2.Matei Limited produces a single product for the local market. The estimated production costs per unit are as follows:-
-------------------------Sh
Direct materials--------3,000
Direct labor------------2,000
Indirect manufacturing costs:
Fixed------------------4,000
Variable--------------10,000

These costs are based on an expected production of 8,000 units. The company expects to sell the products in the local markets at sh. 18,000 each. An overseas customer has offered to pay Sh.9,000 each for 2,000 units. The customer will also meet the selling and transport costs.
Determine whether the overseas order should be accepted or rejected.(20 Marks)

3. a) Maliku Company has produced the following budget. The company purchases and sells one product only.
------------------Sh
Sales------------32,000,000
Direct materials-11,400,00
Direct labor-----6,000,000
Overheads-------12,800,000
Profits---------1,800,000

Material costs are variable but labor and overheads are semi-variable. The fixed element of the overhead cost is Sh,000,000
The selling price per unit is Sh.80
i) Prepare a statement showing contribution per unit
ii) Calculate:
a.The break-even point in units
b.The margin of safety in units.(20 Marks)

4.The following data relates to cost and output of Mariko Limited.
Out (in million----------------1---2---3----4---5--6-----7
Costs(in million shillings-----14--17--15---23--18-22----31

Determine the:
i) Regression line of cost on output
ii) Predicted cost at an output level of 4,000,000 units
iii) Correlation coefficient (20 marks)

5. Explain the problem associated with cost classification. (20 Marks)
6.Distinguish between managerial accounting and financial accounting.(20 Marks)
7.a) Explain the attributes of good information (10 Marks)
b) With an aid of a diagram explain the various types of cost behavior.(10 Marks)

Managerial Accounting Question Paper

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