INSTRUCTIONS: ANSWER ALL QUESTIONS

QUESTION ONE

a$)$ Elaborate the nature of advice that management accountant may give to the following sector managers of an organization

i$)$ Chief Executive Officer $($CEO$)(3$marks$)$

ii$)$Operations Manager $(3$ Marks$)$

iii$)$ Human Resource Manager $(3$ Marks$)$

iv$)$ Finance Manager $(3$ Marks$)$

v$)$ Research and Development Manager $(3$Marks$)$

QUESTION TWO

b$)$ Management accounting deals more about the future more than the past, discuss $(5$ Marks$)$

c$)$ Discuss the relevance of Cost, Volume and Price $($C$-$V$-$P$)$ analysis in decision making for Small and Medium size enterprises in Kenya $(5$ Marks$)$

d$)$ Product Z has a variable costs of Shs $30$ per unit and a selling price of Shs $80$ per unit. The fixed costs are Shs $100,000$ per year.

i$)$ If budgeted sales and production are $20,000$ units, calculate the budgeted profit $($or loss$)$ for the year $(3$ Marks$)$

ii$)$ Calculate breakeven point $($in units$)(2$Marks$)$

iii$)$ How many units need to be sold to achieve a target profit of shs $30,000,000$ per year? $(2$ Marks$)$

QUESTION THREE

a$)$ Customer $$ profitability analysis is a concept that is gaining popularity in current business environment. Discuss the reasons why this is so$.(5$ Marks$)$

b$)$ Discuss why Activity Based Budgeting is the most preferred method of budgeting $(4$Marks$)$

c$)$ Elaborate any decision making model that management accountant uses in their work environment $(3$ Marks$)$

b$)$ Aish ltd produces four products: namely: A$,$ B$,$ C and D$.$ The following are the firm$$s budgeted figures for the month of July $2020$

A B C D

Demand $($units$)1,5001,8001,0004,000$

Selling price per unit $($ sh$)3,8402,7002,0004,000$

Cost per unit $($sh$)$

Material $1,2001,2008001,200$

Labour $1,5008006001,200$

Variable overhead $240170100200$

Fixed overhead $600500400600$

Additional information:

$1.$ Material cost is Shs $10$ per kilogram and the firm has a total of $500$ Kilograms

$2.$ Labour is paid at Shs $15$ per hour and is limited to $360$ hours

Required:

c$)$ Calculate the production mix that would maximize profit for the month $(4$ Marks$)$

d$)$ Calculate the increase in profit if an extra $80$ production hours are made available $(4$ Marks$)$