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Faculty of Commerce and Law

The document provides instructions and questions for an accounting exam. Question 1 asks students to prepare income and financial position statements from a trial balance. Question 2 asks students to prepare a cash flow statement from financial position information. Question 3 asks students to advise on outsourcing vs. in-house production based on machine hours and costs. Question 4 provides scenarios involving depreciation calculation, break-even analysis, and minimum price determination.

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43 views4 pages

Faculty of Commerce and Law

The document provides instructions and questions for an accounting exam. Question 1 asks students to prepare income and financial position statements from a trial balance. Question 2 asks students to prepare a cash flow statement from financial position information. Question 3 asks students to advise on outsourcing vs. in-house production based on machine hours and costs. Question 4 provides scenarios involving depreciation calculation, break-even analysis, and minimum price determination.

Uploaded by

Faith Mpofu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
You are on page 1/ 4

FACULTY OF COMMERCE AND LAW

MASTER OF BUSINESS ADMINISTRATION

MBAZ502: ACCOUNTING FOR MANAGERS

May 2018

Time: 3 Hours

INSTRUCTIONS

Answer ALL Questions

Each question should start on a fresh answer sheet.

Marks will be awarded for clear, concise and practical illustrations.

All Answers must be written in Answer Books provided.

MBAZ502: ACCOUNTING FOR MANAGERS


PAGE 1 OF 4
QUESTIONS

1. From the following trial balance of XYZ (Pvt) Ltd draw up a statement of
comprehensive income for the year ended 30 September 2017 and a statement of
financial position as at that date.

Dr Cr
$ $
Stock 10 October 2016 2 368
Carriage outwards 200
Carriage inwards 310
Returns inwards and Returns
outwards 205 322
Purchases and Sales 11 874 18 600
Salaries and wages 3 862
Rent 304
Insurance 78
Motor expenses 664
Office expenses 216
Lighting and heating expenses 166
General expenses 314
Premises 5 000
Motor vehicles 1 800
Fixtures and Fittings 350
Debtors and creditors 3 896 1 731
Cash at bank 482
Drawings 1 200
Capital 12 636
33 289 33 289

Stock at 30 September 2017 was $2 946.


[25]

MBAZ502: ACCOUNTING FOR MANAGERS


PAGE 2 OF 4
2. The Statement of Financial Position for ABC Ltd are as follows:
31.12.2016 31.12.2017
$ $ $ $ $ $
Non Current Assets
Equipment at cost 28 500 26 100
less Accumulated
depreciation 11 450 17 050 13 010 13 090
Current Assets
Stock 18 570 16 250
Debtors 8 470 14 190
less bad debts provision 420 8 050 800 13 390
Cash and bank balances 4 060 30 680 3 700 33 340
47 730 46 430
Capital 35 760 33 590
Add Net Profit 10 240 11 070
Add cash introduced - 600
46 000 45 260
less Drawings 12 410 8 560
33 590 36 700
loan from Dembare 10 000 4 000
43 590 40 700
Creditors 4 140 5 730
47 730 46 430

Notes

Equipment with a book value of $1 350 was sold for $900. Depreciation written off
equipment during the year was $2 610.

Required

Draw up a cash flow statement for ABC Ltd for the year. [25]

3. SL manufactures three components, VAT, WAT, and YAT, using the same machine
for each. The budget for the next year calls for the production and assembly of 4 000
of each component. The variable production cost per unit of the final product is as
follows:

Machine hours Variable Cost $


1 unit of VAT 3 20
1 unit of WAT 2 36
1 unit of YAT 4 24
Assembly 20
100

MBAZ502: ACCOUNTING FOR MANAGERS


PAGE 3 OF 4
Only 24 000 hours of machine time will be available during the year and a sub
contractor has quoted the following unit prices for supplying components.

VAT : $29
WAT : $40
YAT : 34

Required

(a) Advise SL on what components it should be supplied by the subcontractor and


what components it should make with the available machine hours. [15]

(b) Calculate the total variable cost of components excluding assembly costs. [10]

4. (a) Chelsea commenced business on September 1 2015. He bought a vehicle


for $30 000. He assumed that the vehicle will have a useful life of 5 years and
anticipates that it will have a residual value of $2 000. Chelsea wants to adapt
sum of years digits as his method of computing depreciation.

Required

Calculate the depreciation for the first five (5) years. [10]

(b) Jambo Book Press is considering publishing a textbook on spreadsheet


applications for business. The fixed cost of manuscript preparation, textbook
design and production set-up is estimated to be $80 000. Variable production
and material costs are estimated to be $3 per book. Demand over the life of
the book is estimated to be 4 000 copies. The publisher plans to sell the book
to University students for $20 a copy.

Required

(i) What is the breakeven point in units? [4]

(ii) What is the breakeven point in dollars? [3]

(iii) What profit/loss can be anticipated with demand of 4 000 copies? [4]

(iv) With a demand of 4 000 copies, what is the minimum price per copy
that the publisher must charge to breakeven? [4]

MBAZ502: ACCOUNTING FOR MANAGERS


PAGE 4 OF 4

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