Daffodil International University

Department of Computer Science and Engineering

Faculty of Science & Information Technology
Final Assessment, Spring 2021 @ DIU Blended Learning Center
Course Code: ACT301 (Day), Course Title: Financial & Managerial Accounting
Level: 3 Term: 3 Section: C,E,F,G,I
Instructor: DMAH Modality: Open Book Exam
Date: Thursday:22April, 2021 Time: 1000am-2:00pm
Two and half hours (2:30) to support online open/case study-based assessment
Marks: 40
Directions:
• Students need to go through the CASE STUDY shown in this exam paper.
• Analyze and answer specific section based on your own thinking and work.
• Do not share as this will be treated as plagiarism by Blended Learning Center.

1. The Plastics Company began operations several years ago. The company purchased a building
and, since only half of the space was needed for operations, the remaining space was rented to
another firm for rental revenue of $20,000 per year. The success of Plastics Company's product
has resulted in the company needing more space. The renter's lease will expire next month and
Plastics will not renew the lease in order to use the space to expand operations and meet demand.
The company's product requires materials that cost $25 per unit. The company employs a
production supervisor whose salary is $2,000 per month. Production line workers are paid $15 per
hour to manufacture and assemble the product. The company rents the equipment needed to
produce the product at a rental cost of $1,500 per month. Additional equipment will be needed as
production is expanded and the monthly rental charge for this equipment will be $900 per month.
The building is depreciated on the straight-line basis at $9,000 per year. The company spends
$40,000 per year to market the product. Shipping costs for each unit are $20 per unit.
The company plans to liquidate several investments in order to expand production. These
investments currently earn a return of $8,000 per year.
Required: (10)
Complete the answer sheet above by placing an "X" under each heading that identifies the cost
involved. The "Xs" can be placed under more than one heading for a single cost, e.g., a cost might
be a sunk cost, an overhead cost, and a product cost. An "X" can thus be placed under each of these
headings opposite the cost.
 Cost Element Variable Fixed Direct Direct Manufacturing Period Opportunity Sunk
Cost Cost Materials Labor Overhead Cost Cost Cost
Rental
Revenue
Materials
Cost
Production
Supervisor’s
Salary
Production
line workers’
wage
Equipment
Rental
Building
Depreciation
Marketing
costs
Shipping
costs
Return on
present
investment

2. The following data (in thousands of dollars) have been taken from the accounting records of
Larder Corporation for the just completed year.
Sales ........................................................................... $950
Purchases of raw materials ........................................ $170
Direct labor ................................................................ $210
Manufacturing overhead ............................................ $200
Administrative expenses ............................................ $180
Selling expenses ......................................................... $140
Raw materials inventory, beginning .......................... $70
Raw materials inventory, ending ............................... $80
Work in process inventory, beginning ....................... $30
Work in process inventory, ending ............................ $20
Finished goods inventory, beginning ......................... $100
Finished goods inventory, ending .............................. $70
Required: 10
a. Prepare a Schedule of Cost of Goods Manufactured in good form.
b. Compute the Cost of Goods Sold.
c. Using data from your answers above as needed, prepare an Income Statement in good form

3. The trial balance for Modern Advertising is shown at October 31:

MODERN ADVERTISING
Trial Balance
October 31, 2020

Debit Credit
Cash $ 15,200
Supplies 2,500
Prepaid Insurance 600
Equipment 5,000
Notes Payable $ 5,000
Accounts Payable 2,500
Unearned Service Revenue 1,200
Owner’s Capital 10,000
Owner’s Drawings 500
Service Revenue 10,000
Salaries and Wages Expense 4,000
Rent Expense 900
$28,700 $28,700

The following are the month end adjusting data which should be considered before preparing the
financial statements:

1. Supplies on hand at October 31 total $500.

2. Expired insurance for the month is $200.
3. Depreciation for the month is $500.
4. Services related to unearned service revenue in October worth $600 were performed.
5. Services performed but not recorded at October 31 are $500.
6. Interest accrued at assume the following adjustment data.is $150.
7. Accrued salaries at October 31 are $2,000.

Required: 10
A. Prepare the Adjusting entries at the end of October 31
B. Prepare Adjusted Trial Balance
C. Prepare Financial Statements
4. The following information has been collected from the records of a company:
Total Per unit
Sales price (10,000 units) Tk.7,50,000 TK75
Variable cost 6,00,000 60
Contribution 1,50,000 15
Fixed cost 90,000
Operating Income 60,000
Required: 10
i. Calculate CM Ratio & VC Ratio
ii. Break-even point (expressed in unit’s sales) & Break-even point (expressed in taka
sales)
iii. Present Margin of Safety (expressed in units & Taka sales)
iv. Required sales to earn an annual profit of Tk.90,000?
v. Draw a BEP Chart & identify Break-event point both in units & Taka ales, various
costs and revenues lines (need not use graph paper)