UNIVERSITY INSTITUTE OF SCIENCE AND INSTITUT UNIVERSITAIRE DES SCIENCES

By Pa ACHA 670 092 899

TECHNOLOGY OF YAOUNDE ET TECHNIQUES DE YAOUNDE
ACADEMIC YEAR 2021-2022 ANNEE ACADEMIQUE 2021-2022

NORMAL SESSION 2024/2025

FISRT SEMESTER EXAMINATION CA (SET 1)

Option: ACCOUNTING Time; 2hrs lecturer: PA ACHA
Course Title: COST PROFIT VOLUME ANALYSIS

Revision questions in preparation of HND cost and management

(section C Managerial Accounting BEP analysis)
QUESTION 1
During the month of January 2010, the books of international soap factory Muyuka presented the following
expenses to you as an accountant for treatment
 Purchase of raw materials 500 000
 Variation of stocks of raw material 20 000
 Other consumable material 100 000
 Rates and taxes 30 000
 Personnel expenses 600 000
The supplying charges are used for production and other charges are repartition as follows: 10% to general
administration 60% to production and 30% to distribution
Work required: determine the cost of each function of the business in a tabular form
QUESTION 02
1) The fixed cost of a company steps up by 20% if output exceeds 20 000 units and steps up again by 25% if
output exceeds 40 000 units. The output level units and total cost incurred during the first semester of 202
2 is given as follows
January February March April May June
Output level 5000 15 000 30 000 35 000 45 000 60 000
Total cost FCFA 4 300 000 9 300 000 17 160 000 19 660 000 25 200 000 32 700 000
Required:
i) Calculate the variable cost per unit ii)
ii) Calculate the fixed cost of the highest and the lowest output level
iii) Determine the total cost of the company at an output of 50 000 units
iv) Establish a graph of the stepped fixed cost.
Application 3
DIDAS company is break even when sales are 200 0000F. In 2014, sales were 9 000 000F and variable
amounted to 5 400 000F. Calculate the amount of fixed cost and the BEP chart
Application 4
A form produces Cocoa and package to oversee market. The selling price is 850 CFAF per unit. The variable
cost of production is 500 F and it’s estimated total fixed with amount to fixed production. Overhead 500 000
CFAF and fixed selling and distribution is 400 000 CFAF
Work Required
(a) (I) calculate the contribution per unit
(II) the breakeven point in unit and sales value
(b) Complete the table below to show the break-even point
Unit Fixed cost VC TC TR Profit/loss
0
1000
2000

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3000
4000
Also draw a chart to the break-even point calculated above.
(c) how many units will the form produce in order to make a profit 1200 000 CFAF

Application 5

ABC Ltd produces office equipment in series of 1 000 units up to 9 000 units. The production cost per unit is 2
Frs and fixed cost is 5 000F. The product is sold at 3Frs per unit.
Required
1) In the form of a table show the VC, FC, TC, TR and profit/loss
2) On the same graph extract the following points
(I) The BEP in value (II) A loss when 900 items are produce (III) A gain when 12000 units are produced
The table is of the form (draw and complete the table)
Units Fixed cost Variable cost Total cost Total revenue Profit/loss
0
1 000

Application 6
If a company has a fixed cost of 500 000F variable cost of 600F per unit and selling price 1 400F per unit, how
many units must be sold to be breakeven? How many units will be sold to earn 80000F profit?
Application 7
A company sells product for 200F each with VC of 100F per unit and FC 100000F. The company currently sold
20000 units per year. Should this company undertake an advertising campaign that will result to a 100000F I
crease of FC, 20F per unit decrease of VC and 10% increase in sales. What will be the safety margin before and
after the campaign.
Application 8
a) An entity will break even when sales are at 5400 000CFAF with a to variable cost of 4 000 000CFAF and net
profit amounted to 200 000CFAF. Calculate the annual sales and the fixed cost for the period.
Application 9 (ISPA FIRST SEMESTER 2022)
An entity produces and sells 3 000 units of Appero product every year. Sales are regular. The selling price of
each unit of Appero is 750frs. The total cost is defined in function of Q as follows:
TC= 350Q + 900 000, where Q is the quantity produced and sold
Determine
a) profit realized by the enterprise each year
b) calculate the break-even Point in units and in value
c) calculate the security margin in units and in value
d) Determine the security index and the date of the BEP
Application 10
The forecasted turnover of WADA co ltd for the year 2009 was 75 000 000F. The corresponding BEP will be
realized on the 15th July 2009 while the unit selling price is 12 500F. Knowing that the year has 360 days
Task
1) Determine the forecasted VC and total FC knowing that the forecasted result represent 30% of the turnover
2) Graphically represent the BEP
3) If the BEP was to be realized on the 31/7/2009, determine the unit SP
Application 11
a) consider the following: direct material 1 000F, direct labour 1500F, selling price per unit 4 000F, rent 5 000F
per month (paid for 12 months), profit 30 000F. Calculate quantity sold, the contribution margin and the BEP in
value

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b) The extract of the differential table is: BEP IN VALUE 3 375 000F FC 1 500 000F and result 2 500 000F.
Calculate the turnover and the variable cost.
c) Tomah’s enterprise is break-even at a point where sales is 5 000 000F and VC is 4 000 000F and result is
equal to 200 000F. Calculate the turnover and the fixed cost

APPLICATION 12
1.PART ONE: COST ACCOUNTING (25 Marks)
DEMOCA is a private limited company located in Bamenda and it is specialized in the purchases and the sales
of sundry goods
For 2006, the following information was provided:
. Stock of goods on 01/01/2006: 750 000frs
. Purchase price: 50 850 000frs
. Sales value: 93 750 000frs
. Other expenses by function: (see appendix 1)
. Cost behavior: (see appendix 2)
. Stock on 31/12/2006: 5 250 000frs
Required:
1.1. prepare the table of classification of expenses with the help of appendix 3
1.2. prepare the differential operating table
1.3. Calculate the BEP and its corresponding date
1.4. Graph the BEP and its corresponding date
On the 01/04/2006, the finance department of DAMOCA estimated the following changes:
. Decrease of the contribution ratio up to 0.15
. Increase of fixed assets by 2 171 875frs
1.5. Calculate the new BEP
1.6. On the same graph above, represent graphically the new BEP
1.7. What do you think about these changes?
APPENDIX 1: Other expenses by function
Expenses Amount Expenses on Expenses on distribution
purchases
Transport 9 000 000 40% 60%
Consumable store 3 000 000 03 02
Commissions rent 45 000 05 04
fees 000
Rent fees 4 000 000 05 03
Personnel expenses 7 000 000 70% 30%
Depreciation 3 900 000 50% 50%
APPENDIX 2: Cost behavior
Expenses Variable expenses Variable expenses Fixed expenses
on purchases on distribution
Transport 30% 40% 30%
Consumable stores 45% 30% 25%
Commission rent fees 50% 20% 30%
Rent fees 50% 30% 20%
Personnel expenses 70% 30% -
Depreciation - - 100%

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APPENDIX 3: Tale of classification of expenses

QUESTION 13:
CANOCAM Co Ltd Produces P from one raw material. The transformation is done in single workshop
whose normal production is 5 00 unit of production P completed
On the basis of this production, the technical department has established the following
ELEMENT QUANTIT UP AMOUNT
Y
Raw material 2kg 500F 1 000F
Direct labour 4hours 1 000F 4 000F
Workshop expenses 4hours 2 000F (1) 8 000F
Total 13 000F

(1) Include 800F of variable expenses and 1200F of fixed cost.

It is precised that, the nature of work units in the workshop is the hour of direct labour for the month of. During
the month of Oct 2008, the following data was extracted from cost accounting records:
. Production for the month 480 units
. Consumption of raw material 1200kg at 510F each
. Direct labour 1800 Hrs at 950F an hour
. Workshop expenses
Fixed expenses forecasted remain identical in this workshop 3 870 000F
Required
1. Present the comparison table of Actual and Standard costs
2. Analyze the variances on direct expenses by calculation
3. Analyze the variances on workshop expenses
QUESTION 14
From the books of the color pain Manufacturing company, the following information was extracted. It relates to
the production of Pantex in tins for the year 2010.
- Raw materials for one tin 6liters at 2,000F per liters
- Direction labour cost for one tin 1hour at 300F an hour
- Variable overhead expenses 2700F per tin
- Annual fix cost 1800000F
- Monthly sales 75tins at 24,000 per tin
Required:
2.1. Present the differential operating account (4Marks)
2.2. Calculate the company’s BEP and the date of its realization (4 marks)
2.3. Calculate the safety index (2 marks)
QUESTION 15
A public limited company ‘MAT ltd’ produces women shoes. The actual cost of production slip for a pair of
shoes determined by the cost and management accounting department is as follow;
ELEMENT QUANTITY UP AMOUNT
VARIABLE
PRODUCTION
Leader 0.4m2 2100F 850F
Hard plastic 2.3m2 750F 1725F
Other stores 320F
Manufacturing expenses 10mins 6000F per hour 1000F

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Fixed expenses 900F

4795F
Off production expenses
Variable expenses 715F
Fixed expenses 500F
TOTAL COST 6010F
This production Centre has produced and sold 3500 pairs of shoes at 8000F each during the month of Dec 2008.
Required
1. Calculate the total and unit contribution margin (4 marks)
2. Calculate the total and unit result realized during the month of Dec 2008 (4 marks)
3. Calculate the break event point in value and in volume (4 marks)
The management of this company think that, with an intensified advertisement which will cost 1 500 000F,
unit sales will reach 4000 pairs of shoes at the same ale price.
4. Determine the new total and unit (4 marks)
5. Calculate the new result to be realized (1 mark)
6. How many pairs of shoes should be sold in order to realize a profit of 8 000 000F? (3 MARK)
QUESTION 16
FILE 2: BREAK EVEN ANALYSIS
The management of TOYCAM has presented the following information extracted from children’s department:
- Annual sales of toys 20 000 units
- Selling price of toy 2 000 FCFA
- Purchase cost of toy 1250 FCFA
- Annual fixed cost consists of:
 Personal salaries 5 000 000FCFA
 Advertisement campaign 200 000FCFA
 Miscellaneous expenses 5 000 000FCFA
Required:
1.1 Calculate the breakeven point and the margin of safety in quantities (5 marks)
1.2 Assume that only 15 000 toys were sold a year calculate the results (7 marks)
1.3 If a selling commission of 125 per toy sold is introduced how many toys will be sold in a year in order to
realize a profit of1 500 000F? (5 marks)
1.4 Assume that for next year, an additional campaign costing 8 000 000F is proposed, while at the same time
selling price is only decreased by 2.5 %, graphically calculate the breakeven point (8 marks)
(TOTAL 25 MARKS )
QUESTION 17
1) (GCE 201, P2, Q5) DU VAAL Company produced a single product during 2017. The cost incurred for the
period were as follows:
- Materials 15 000 000 FCFA
- Labour 5 000 000 FCFA
- Variable production overheads 10 000 000 FCFA
- Fixed production overheads 5 000 000 FCFA
- Variable selling and distribution is 20% of sales
- Fixed selling and distribution is 2 000 000 FCFA
During the year 300 000 units were sold at 250 FCFA per unit and units produced were 350 000 units.
Required:
(a) Prepare the income statement showing clearly the profit or loss using:
(i) Marginal costing approach
(ii) Absorption costing approach
(b) Which method is preferable for the company and why?
QUESTION 18

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2) (GCE 2014, P2, Q5B) A manufacturing company makes a single product. The costs incurred during the 1st
quarter of 2011 were:
- Material 1 500 000 FCFA
- Labour 5 000 000 FCFA
- Variable factory overheads 5 000 000 FCFA
- Fixed factory overheads 10 000 000 FCFA
The sales value was 100 000 000 FCFA, while 250 000 units were produced.
Required
Prepare the statement of income showing clearly the values of the closing stock and the net profit using:
- Absorption costing - Marginal costing
QUESTION 19
3) (GCE 2015, P2, Q5) The data below relates to AMAN LTD
Standard cost per unit 000 FCFA
Direct labour cost 5
Direct material cost 8
Variable production overheads per unit 2
Fixed production overheads per unit 5
Total cost per unit 20
Selling and distribution and administrative expenses are:
- Fixed 15 000 000 FCFA
- Variable 15% of sales value
The selling price is 35 000 FCFA per unit
The quantity produced and sold
- Production 2 000 units
- Sales 1 500 units
- Opening stock 1 000 units
Required:
a) Prepare the profit and loss statement using:
- Absorption costing -Marginal costing
b) Differentiate between contribution margin and margin of safety.
QUESTION 20
Question Two: 15 Marks
The Management of CEMCOBA PLC has been witnessing some difficulties lately in obtimising it's profit
potentials. In order to get out of the situation, the management consults you with the following information:
Annual turnover 60,000,000F
Contribution Margin Ratio 25%
Net fixed cost 100,000,000F
Second Work Required:
2.1- Calculate the BEP in value and in volume knowing that the unit of sales price is 25,000F. (4mks)
2.2- If fixed cost are increased by 20% while the contribution Margin Ratio remains unchanged, what would be
the new BEP in value and in volume? (4 marks)
2.3- The managing director is envisaging to realize a net income of 8,000,000F next year. What would be the
sales in value in order to achieve this objective? (4 Marks)
2.4- The managing director is equally hoping to break-even by the end of May next year. What would be the
unit sales price? (3 Marks)