Q1. Examine with suitable examples, how “Vision and Mission statement” influence the organization’s decision making process? Also provide vision and mission statement of any two Saudi companies.(1.5 Marks)
Answer:
Q2. The following data has been taken from the records of ABC Company for the year 2015:
Month
Units Produced
Total Cost (SAR)
January
3,500
35,500
February
3,750
35,750
March
4,000
36,000
April
4,250
36,250
May
4,500
38,000
June
4,750
43,000
July
2,750
32,000
August
3,250
32,500
Required:
Using the high-low method of analysis, find out variable cost, fixed cost and determine a cost function.
Answer:
Q3. MNM Corporation provides you the following accounting information related with a particular product:
Particulars
Amount (SAR)
Selling price per unit
500
Variable cost per unit
200
Total fixed cost
240,000
Use cost volume profit analysis to answer the following questions:
Determine the break-even point in units?
Determine the break-even point in sales value SAR?
What will be the pretax profit if company sells 1,200 units of the product?
How many units the company will be required to sell to reach a target pretax profit of SAR 150,000?
Answer:
Q4. X Ltd. makes metal products and sells a metal product for SAR 150 per units. The company’s variable cost is SAR 35 per units and total fixed cost are SAR 51,750. The company’s estimated next year budgeted sales are 1,500 units. You are required to calculate:
Degree of operating leverage
Margin of safety in units
Margin of safety in SAR value
Sample Solution
