MANAGERIAL ACCOUNTING CASH BUDGET ASSIGNMENT SHEET EXERCISE (1):

THE RECORDS OF CAIRO CORPORATION SHOW THE FOLLOWING INFORMATION CONCERNING THE SUB-BUDGETS FOR THE COMING YEAR 2005 AS FOLLOWS:
SUB-BUDGETS
SALES REVENUE SALES COLLECTION PRODUCTION LABOR HOURS DIRECT WAGES REQ. RM/U PURCHASE RM/U PURCHASE RM/$ PURCHASE PAYEMENTS INDIRECT O.H. MKT & ADM. 4200000 73000 121100 520000 88400 91100 144200 210800 550000 620000 Q1/5 Q2/5 3825100 4700000 62000 131200 490000 99900 88800 152600 220100 480000 500000 Q3/5 3900000 4100000 66200 141300 380000 84700 85600 161900 260300 495000 530000 Q4/5 3185000 4000000 71400 151400 510000 86200 80000 172300 200000 510000 485000

GIVEN THAT:
1. ESTIMATED OP. CASH BALANCE OF Q1/5 IS $512400 2. FACTORY MACHINES DEP. PER YEAR IS $100000, SALES EQUIP. DEP PER MONTH IS $8000, FACTORY BUILDING DEP. PER QUARTER IS $6200, AND DISPLAY BUILDINGS DEP. PER QUARTER IS $12000, ADMINISTRATIVE DEP. EACH 6 MONTH IS $20000. 3. A LAND LOT OF $400000 WILL BE SOLD, 40% WILL BE COLLECTED IN Q1/5, AND THE REST NEXT QUARTER. 4. A LOAN PREMIUM OF $160000 WILL BE PAID IN Q2/5 AND OF $190000 IN Q4/5. 5. A CASH DISTRIBUTION TO EMPLOYEES WILL BE MADE OF 1% OF THE TSR OF EACH QUARTER. 6. OLD MACHINES OF $1200000 WILL BE SOLD 60% WILL BE COLLECTED IN Q3/5, 30% IN THE NEXT QUARTER, AND THE REST IN THE QUARTER AFTER. 7. USED FURNITURE WILL BE SOLD FOR $350000,$130000 WILL BE COLLECTED IN Q1/5 ,$100000 WILL BE COLLECTED IN Q2/5, AND THE REST IN THE NEXT QUARTER. 8. A PRODUCTION LINE COSTING $600000 WILL BE ADDED, 25% WILL BE PAID IN Q2/5, 50% NEXT QUARTER AND THE REST IN THE QUARTER AFTER.

9. USED AUTOMOBILES OF $300000 WILL BE SOLD; THE AMOUNT WILL BE COLLECTED OVER 3 EQUAL PREMIUMS STARTING Q1/5. 10. AN EXTENSION NOF THE WAREHOUSE COSTING$400000 WILL BE MADE, 60% OF THE COST WILL BE PAID IN Q2/5 AND THE REST IN Q4/5.

REQUIRED:
PREPARE THE CASH BUDGET FOR THE COMING YEAR 2005

EXERCISE (2):
THE RECORDS OF CAIRO CORPORATION SHOW THE FOLLOWING INF CONCERNING THE SUB-BUDGETS FOR THE COMING YEAR 2005 AS FOLLOWS:

SUB-BUDGETS
SALES REVENUE SALES COLLECTION PRODUCTION LABOR HOURS DIRECT WAGES REQ. RM/U PURCHASE RM/U PURCHASE RM/$ PURCHASE PAYEMENTS INDIRECT O.H. MKT & ADM.

Q1/5 9750000 9900000 61250 257250 2309125 183750 109800 284580 320374 426625 307000

Q2/5 9000000 9900000 58750 246750 2214875 176250 105075 271845 266927 415375 297000

Q3/5 8400000 8910000 55000 231000 2073500 165000 102780 274788 277821 398500 289000

Q4/5 10800000 9480000 76000 319200 2865200 228000 138300 322500 287924 493000 321000

GIVEN THAT:
1. ESTIMATED OP. CASH BALANCE IS $75200. 2. FACTORY MACHINES DEP. PER YEAR IS $80000, SALES EQUIP. DEP PER MONTH IS $5000, FACTORY BUILDING DEP. PER QUARTER IS $6500, AND DISPLAY BUILDINGS DEP. PER QUARTER IS $20000, ADMINISTRATIVE DEP. EACH 6 MONTH IS $30000. 3. A LAND LOT OF $1200000 WILL BE SOLD, 40% WILL BE COLLECTED IN Q3/5, 40% NEXT QUARTER, AND THE REST NEXT QUARTER. 4. OLD MACHINES OF $420000 WILL BE SOLD IN Q2/5, AND USED AUTOMOBILES WILL BE SOLD FOR AN AMOUNT OF $500000,40%OF THE AMOUNT WILL BE COLLECTED IN Q1/5 AND THE REST IN Q3/5 . 5. IT IS PLANNED TO MAKE A CASH DISRTRIBUTION TO EMPLOYEES OF 1% OF THE TSR OF EACH QUARTER. 6. A LOAN PREMIUM WII BE PAID IN Q2/5 OF $250000 AND OF AN AMOUNT OF $350000 WILL BE PAID IN Q4/5. 7. IT IS PLANNED TO ADD A NEW PRODUCTION LINE COSTING $2000000 TO BE PAID OVER 4 QUARTERS STARTING BY Q25. REQUIRED: PREPARE THE CASH BUDGET FOR THE COMING YEAR 2005.

CLOSING POINT EXAMPLE (1):

THE RECORDS OF CAIRO CORPORATION SHOW THE FOLLOWING INFORMATION OVER A GIVEN PERIOD OF TIME: $50000 Total Fixed Cost $25 VC/U $30 SP/U 15000 U Current Activity level GIVEN THAT: 1. 40%OF THE TOTAL FIXED COST (TFC) IS SUNK COST (TSU). 2. BECAUSE OF SOME CIRCUMSTANCES, THE TOP MANAGEMENT EXPECTS TO OPERATE DURING THE COMING PERIOD OF TIME AT AN ACTIVITY LEVEL OF 3000 UNITS. REQUIRED: BEING THE MANAGERIAL ACCOUNTANT, WHAT IS YOUR TECHNICAL OPINION CONCERNING STOPPING PRODUCTION USING: 1. MATHEMATICAL TECHNIQUE 2. TABULAR TECHNIQUE 3. GRAPHICAL TECHNIQUE

EXAMPLE (2):
THE RECORDS OF CAIRO CORPORATION SHOW THE FOLLOWING INFORMATION OVER AGIVEN PERIOD OF TIME: $100000 Total Fixed Cost $10 VC/U $20 SP/U 15000 U Current Activity level GIVEN THAT TSU IS 60% REQUIRED: 1. CALCULATE BEP AND CP USING: MATEMATICAL TECHNIQUE TABULAR TECHNIQUE GRAPHICAL TECHNIQUE 2. BECAUSE OF SOME CIRCUMSTANCE THE CORPORATION EXPECTS THAT (AL) WILL GO DOWN BY 40%. BEING THE MANAGERIAL ACCONTANT, WHAT IS YOUR TECHNICAL OPINION CONCERNING STOPPING OR CONTINUING PRODUCTION. 3. IN RESPONSE TO A MARKET RESEARCH THE CORPORATION AEXPECTS THAT (AL) WILL GO DOWN BY 80%, WHAT IS YOUR TECHNICAL OPINION CONCERNING STOPPING OR CONTINUING PRODUCTION.

MAKE OR BUY DECISIONS EXAMPLE (1):

X CORPORATION CONSIDERED 2 ALTERNATIVES CONCERNING PACKAGES REQUIRED FOR EACH PRODUCTION AS FOLLOWS: ALTERNATIVE (1): TO BUY THESE PACKAGES FROM AN OUTSIDE SUPPLIER AT THE PRICE OF $2.2/PACKAGE,IN ADDITION TO $0.3 FOR THE TRANSPORTATION AND INSURANCE PER UNIT. ALTERNATIVE (2): TO MAKE THESE PACKAGES INTERNALLY, IN CASE OF APPLYING THIS ALTERNATIVE THE CORPORATION NEEDS: 1. BUYING ANEW PRODUCTION LINE AT ACOST OF $120000, THE PRODUCTION LINE WILL BE DEPRECIATED USING ST. LINE METHOD , IT'S ESTIMATED USEFUL LIFE TIME IS 5 YEARS AND IT'S SCRAPE VALUE IS $20000. 2. THE VARIABLE COST PER UNIT FOR THE NEW PACKAGE IS $0.5. REQUIRED: BEING THE MANAGERIAL ACCOUNTANT OF THE CORPORATION, WHAT IS YOUR TECHNICAL OPINION CONCERNING BUYING OR MAKING THESE PACKAGES USING: 1. MATHEMATICAL TECHNIQUE. 2. TABULAR TECHNIQUE. 3. GRAPHICAL TECHNIQUE.

SELECTING THE BEST SALES MIX DECISIONS EXAMPLE (1):

THE RECORDS OF CAIRO CORPORATION SHOW THE FOLLOWING INFORMATION CONCERNING 3 PRODUCTS: ITEMS
SP/U VC/U

X
50 40

Y
20 12

Z
10 6

THE CORPORATION HAS FOUR ALTERNATIVES FOR MIXING PRODUCTS WHICH ARE:
PRODUCTS X Y Z ALT 1 4000 9000 12000 ALT 2 3000 10000 15000 ALT 3 2000 12000 16000 ALT 4 4000 7000 16000

GIVEN THAT: 1. ALL OF THE ALTERNATIVES GIVE THE SAME TSR. 2. THE TOTAL FIXED COST IS $71200 REQUIRED: BEING THE MANAGERIAL ACCOUNTANT OF THIS CORPORTION WHAT IS THE BEST ALT TO BE CHOOSEN.

(CVP) ANALYSIS EXAMPLE (1):

THE RECORDS OF X CORP. SHOW THE FOLLOWING INF AT THE END OF AGIVEN PERIOD OF TIME: $80000 Total Fixed Cost $30 VC/U $50 SP/U 10000 U Current Activity level

REQUIRED:
1. 2. 3. 4. 5. 6. 7. PREPARE A COST STATEMENT. CALCULATE THE BEP IN UNITS MATEMATICALLY. CALCULATE THE BEP IN DOLLARS MATHEMATICALLY. CALCULATE THE BEP USING THE TABULAR TECHNIQUE. CALCULATE SM CALCULATE NP USING SM CONCEPT CALCULATE THE BEP USING THE TRADITIONAL GRAPICAL TECHNIQUE 8. CALCULATE THE BEP USING THE NON-TRADITIONAL GRAPICAL TECHNIQUE.

EXAMPLE (2):
THE RECORDS OF X CORP. SHOW THE FOLLOWING INF AT THE END OF AGIVEN PERIOD OF TIME: $15000 Total Fixed Cost $15 VC/U $20 SP/U 9000 U Current Activity level

REQUIRED:
1. 2. 3. 4. 5. 6. PREPARE A COST STATEMENT. CALCULATE THE BEP IN UNITS MATEMATICALLY. CALCULATE THE BEP IN DOLLARS MATHEMATICALLY. CALCULATE THE BEP USING THE TABULAR TECHNIQUE. CALCULATE SM CALCULATE THE BEP USING THE TRADITIONAL GRAPICALTECHNIQUE 7. CALCULATE THE BEP USING THE NON-TRADITIONAL GRAPICAL TECHNIQUE and profitability chart.