QUESTION ONE

a$)$ Explain the following concepts as applied in Management Accounting:

Standard Costing

Fixed costs

Variance analysis

Contribution Margin $(4$ Marks$)$

b$)$ Joan Piri and Joseph Tatu decided to venture into the same business in the year $2022.$ They sell the same type of produc in the same type of market. The following is their budgeted Income Statement for the year ending $30$ June $2024$;

Joan Piri

Business

Sh$000$

Joseph Tatu

Business

Sh$000$

Sales

Variable cost

Fixed Cost

$800\mathrm{.}000$

$(480,000)$

$(60,000)$

$800,000$

$(400,000)$

$(140,000)$

Budgeted Profit

$260,000$

$260,000$

Required: Calculate:

Breakeven point for each business $(8$Marks$)$

The sales volume at which each business will earn a profit of shs $20,000,000(8$Marks$)$