Managerial Accounting

Daffodil International University Department of Information Technology & Management Faculty of Science & Information Technology Midterm Examination, Summer 2025 Course Code: ITM201, Course Title: Managerial Accounting Instructor: DAR Date: Time: Marks: 25 Exam instructions: A) Answer all the Questions. [at right side the allocated marks and corresponding course outcomes are indicated] B) During the exam you are not allowed to leave the exam hall to have water or restroom, but if you finish early, you may leave the hall submitting the script. C) Do not keep your mobile phone or digital watch in your bag during the exam and keep all your belongings in a secure place. D) Be respectful to the Exam ethics. Use own Stationary. 1. a) Define managerial accounting and what is its purpose, and who are its primary users? [Marks: 2, CLO Level: CLO-1 L-1] 1. b) Company Y manufactures electronic gadgets. The following costs were incurred during the month of June: • Direct Materials: $40,000 • Direct Labour: $25,000 • Factory Rent: $10,000 • Sales Commission: $5,000 • Depreciation on Manufacturing Equipment: $4,000 • Office Salaries: $8,000 • Packaging for Final Products: $3,000 a) Classify each of the above costs (product cost/period cost). b) Calculate the total product cost and total period cost. [Marks: 5] 2. Febrilife Company has the following cost and expense data for the year ending December 31, 2023. Raw materials, 1/1/23 | Tk 30,000 | Insurance, factory | Tk 14,000 Raw materials, 12/31/23 | Tk 20,000 | Contractual labour for delivery | Tk 6,000 Depreciation on delivery equipment | Tk 5000 | Utilities expense | TK 45000 Cost of raw materials purchases | Tk 205,000 | Revenue from sales | Tk 20,00,000 Indirect materials | Tk 15,000 | Delivery expenses | Tk 100,000 Work in process, 1/1/23 | Tk 80,000 | Sales commissions | Tk 150,000 Work in process, 12/31/23 | Tk 50,000 | Supplies expense for office | Tk 9,000 Finished goods, 1/1/23 | Tk 110,000 | Factory machinery rent | Tk 30,000 Finished goods, 12/31/23 | Tk 120,000 | Office utilities | Tk 45,000 Direct labour | Tk 350,000 | Miscellaneous costs | Tk 24,000 Production line maintenance salaries | Tk 35,000 | Promotional expenses | Tk 30000 Instructions: a) Determine the cost of goods sold for Febrilife Company for 2023. b) Construct an income statement for Febrilife for 2023. [Marks: 10, CLO Level: CLO-1 L-4] 3. Aquatina a water bottle manufacturer has the following income statement for the month of January, 2025 Particulars | TOTAL Sales(Unit price Tk30) | TK 150,000 Variable expenses | Contribution margin | 120,000 Fixed expenses | 90,000 Net operating income | TK 30,000 * The company determine the variable cost based on number of unit produced. Instructions: a) Using the equation method, determine the overall break-even point for Patronus in sales volume. b) Determine the Margin of Safety in Tk and as a percentage of actual sales. c) The sales manager is convinced that a 10% reduction in the selling price will result in a 25% increase in the number of sold each month. Prepare two contribution format income statements, one under present operating conditions, and one as operations would appear after the proposed changes. Show both total and per unit data on your statements. d) Assume that through a more intense effort by the sales staff, PETRONU's sales increased by 5.8% the following year. By what percentage would you expect net operating income to increase? Use the degree of operating leverage to obtain your answer. e) Refer to the original data. The company's advertising agency thinks that a new package would help sales. The new package being proposed would increase packaging costs by $0.60 per unit. Assuming no other changes, how many units would have to be sold each month to earn a profit of $4,500? [Marks: 8, CLO Level: CLO-1 L5]