INSTRUCTIONS;To get a common size ratio from a balance sheet, the total assets figure is assigned the percentage of 100 percent. Every other item on the balance sheet is represented as a percentage of total assets. For example, if SAM has total assets of shs.10, 000 and debt of shs.3, 000 , then debt equals 30 percent (debt divided by total assets, or shs.3, 000 shs.10, 000, which equals 30 percent). To get a common size ratio from an income statement (or profit and loss statement), you compare total sales. For example, if SAM has shs.50, 000 in total sales and a net profit of shs.8,000, then you know that the profit equals 16 percent of total sales.

Common Size Statements In order to avoid the limitations of Comparative Statement, this type of analysis is designed. Under this method, fina ncial statements are analyzed to measure the relationship of various figures with some common base. Accordingly, while preparing the Common Size Profit and Loss Account, total sales are taken as common base and other items are expressed as a percentage of sales. Like this, in order to prepare the Common Size Balance Sheet, the total assets or total liabilities are taken as common base and all other items are expressed as a percentagNSof total assets and liabilities.

QUESTIONS

1.explain on the applications of Margin of safety while internalizing the concepts of managerial accounting

2.show how decisions can be derived from relevant costs of cash flow in managerial accounting

3.shed light to explain the chipping in of the Relevant and irrelevant data while establishing managerial accounting conclusions

4.what are the parametersthat decide action for the Differential costs and revenues in managerial accounting?

5.clearly,show the implications of incremental costs in achieving the objectives of managerial accounting

6.what are the driving forces and the way onwards for the activities of theTemporary closure of factory or department as a role of managerial accounting in curbing defective operations?

7.what does the termPermanent abandonment of premises mean and do to the ways inwhich managerial accounting is done?

8.what is the implication of product mix in managerial accounting?

9.is Price and demand relationship a good indicator for the progress in managerial accounting? How?

10.explain on the Full cost plus pricing (absorption) for most firms in their managerial accounting department