Accounting skills assignment

 

 

 

 

ACCOUNTING SKILLS

SBS – MBA / MSc

Assignment – Qatar 2019

 

 

STUDENT ID

 

 

UNIT TITLE / CODE:           ___________________________________________________

NAME (in Full):                     ___________________________________________________

 

GENERAL INSTRUCTIONS

 

• All assignments are to be submitted 9^th January 2020 on to examinationboard@atmsedu.org and cc to afatima@atmsedu.org.
• Hardcopy submissions to be done 10^th January 2020
• If assignment is not submitted on date, will follow with penalty of 10% deduction of marks for every day.
• If any extension request, has to come 5 days before the submission date with valid reasons & supported document to afatima@atmsedu.org
• Similarity between students work is strictly not accepted, any student found with similar work will be graded Zero and fail for the course. However, Plagiarism is an academic offence and will not be tolerated under SBS
• Assignment once submitted to exam board is final for marking.
• Total mark will be converted to 90 & class participation of 10 marks.

Total 100 marks

 

GUIDELINES FOR ASSIGNMENT

 

1. If assignment is Question & Answer based then.
   • Introduction is needed for each question.
   • Question has to be answered based on the mark allotted for each question with references if any idea or information is taken from other source.

2. If assignment is case based then,

• Executive summary
• Table of content
• Body of assignment (questions related to case need to be answered)
• Conclusion / Recommendation if any
• References (in-text + citation) to be used.

 

 

PLAGIARISM

 

Plagiarism is a form of cheating, by representing someone else’s work as your own or using someone else’s work (another student or author) without acknowledging it with a reference. This is a serious breach of the Academic Regulations and will be dealt with accordingly. Students found to have plagiarised can be excluded from the program.

 

Plagiarism occurs whenever you do any of the following things without acknowledging the original source:

 

• Copy information from any source (including the study guide, books, newspapers, the internet)

 

• Use another person’s concepts or ideas

 

• Summarise or paraphrase another person’s work.

 

 

How do I avoid plagiarism?

 

To ensure you are not plagiarising, you must acknowledge with a reference whenever you:

 

• use another person’s ideas, opinions or theory

 

• include any statistics, graphs or images that have been compiled or created by another person or organization

 

• Paraphrase another’s written or spoken word.

 

 

What are the penalties?

 

The penalties for plagiarism are:

 

• Deduction of marks,
• A mark of zero for the assignment or the unit, or
• Exclusion from the program.

 

Plagiarism is dealt with on a case-by-case basis and the penalties will reflect the seriousness of the breach.

 

Please note: claiming that you were not aware of need to reference is no excuse.

 

 

 

 

 

Answer ALL the following questions

Question 1

1. ‘Accounting is the systematic and comprehensive recording of financial transactions pertaining to a business and it also refers to the process of summarizing, analysing and reporting these transactions to oversight agencies and tax collection entities.’

 

Discuss the Significance of Accounting and also explain the Scope of Accounting.

 

30. Prepare an Income statement and Balance sheet of Potus Corporation as at 30.06.19

 

Particulars                             Amount($’000)

Sales                                                    37,436

Cash                                                    4,895

Cost of Goods sold                             26,980

Accounts Payable                                7,156

Accounts Receivable                           5,714

Selling & Admin expenses                 3,624

Inventory                                            8,517

Research & Development expense     1,982

Plant & Machinery                              7,154

Interest Expense                                  450

Long term liability                              20,105

Land                                                    981

Income tax expense                            1,100

 

Question 2

1. Breakeven point analysis is an important financial analysis tool used by business owners.

 

1. Explain the importance of breakeven analysis.
2. What are its advantages and limitations ?

 

 

 

 

 

1. Robert Industries produces a single product. The following are the financial numbers related to this product.

 

Selling Price    =          $250 per unit

Variable cost   =          $100 per unit

Fixed Costs     =          $56,000

The Management wants to know the following :

1. Contribution per Unit
2. Contribution Margin ratio
3. Break even point in Units
4. Breakeven Point in sales
5. Calculate Sales value in $ to earn profit of $50,000.

 

Question 3

1. The Walter Group provides the following data for June 2019 when 15,000 units were manufactured.

 

Standard Material cost (per Unit)                               8.50kg@$7.50 per Kg.

Actual Material cost (Per Unit)                                  6.75Kg@$13.5 per Kg.

Standard Labour cost (Per Unit)                                 5.5hrs@$15 per hour

Actual Labour cost (Per Unit)                                    6.5hrs@$12.2 per hour

 

Calculate the following :

 

1. Direct Material Variance
2. Direct Material Quantity/Usage Variance
3. Total Material Cost Variance
4. Direct Labour rate Variance
5. Direct Labour efficiency Variance
6. Total Labour Cost Variance

 

10. Calculate variable overhead spending variance if actual labour hours used are 260, standard variable overhead rate is $10.40 per direct labour hour and actual variable overhead rate is $9.30 per direct labor hour. Also specify whether the variance is favourable or unfavourable.
11. Define the term Variance Analysis and highlight its Advantages and Disadvantages.

 

Question 4

1. Underline the main components which are considered while preparing a budget in a

Company. What are the major considerations business owners should make as they budget and forecast ?

1. Prepare a Cash budget for the Quarter April To June based on the following data and additional information.

 

Month             Sales($)                       Purchase($)     Wages($)         Overheads($)

Jan                   60,000             36,000             9,000               10,000

Feb                  62,000             38,000             8,000               9,500

Mar                  64,000             33,000             10,000             11,500

Apr                  58,000             35,000             8,500               9,000

May                 56,000             39,000             9,000               9,500

Jun                   60,000             34,000             8,000               9,000

 

Additional Information :

1. Cash balance at 1^st April is $800,000
2. Sales is 40% cash sales and 60% is collected in the following month.
3. All purchases of a month are paid after 2 months.
4. Land was purchased in April for $85,000
5. Wages of a month are paid the following month. All overheads are paid the same month.
6. Loan repaid in May $16,000
7. Dividend of $75,000 is expected to be received in May.

 

Question 5

How do you define the term Cost ? Discuss about Cost Classification based on Variability and Controllability. Provide real examples of such costs in the real world.

 

Question 6

1. What are the main differences between Finance and Accounts ?
2. Describe the 3 types of Accounting with special emphasis on the roles performed in each.

 

 

 

FORMULAS

 

VARIANCE ANALYSIS

 

Direct Material Price Variance              =          (Act Units produced x Act Material/Unit)  x

(Act Price – Std Price)

 

Direct Material Usage Variance             =          Std Price x [(Act Units produced x Act Mat/unit)

                                                                        – (Act units produced x Std Mat/unit)]

 

Labour Rate Variance                           =          (Act units produced x Actual Lab hrs/unit) x

                                                                        (Actual Price – Std Price)

 

Labour Efficiency Variance                   =          Std Price x [(Act units produced x Act Lab hrs) –

                                                                        (Act units produced x Std Lab hrs/unit)]

 

BREAK EVEN POINT FORMULAS

 

Contribution per Unit                            =         Selling Price per Unit minus Variable Cost per Unit

Contribution Margin                              =         Contribution per Unit

—————————–    x 100

Selling Price per Unit

 

Break Even Point in Units                     =          Fixed Costs

—————-

Contribution per Unit

 

Break Even Point in Amount                 =          Break even point in Units x Selling Price per Unit

 

Units needed to earn Profit                    =          Fixed Costs + Profit

————————–

Contribution per Unit

 

 

 

INVENTORY :

Economic Order Quantity                     =         Square Root of  (2SO divided by C) where S = Sales,

O          =          Ordering Cost and C = Carrying Cost

 

Number of Orders                                 =          Sales divided by EOQ

 

Average Inventory                                =          EOQ divided by 2

Total Cost of Ordering & Carrying        =          (Number of Orders x Ordering Cost) +

(Average Inventory x Carrying Cost)