ACC 102 Accounting Principles Assignment

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ACC 102/200 Accounting Principles Assignment - Emirates College of Technology, UAE

Learning Outcomes -

LO1: Describe the tools of the financial statement analysis and Analyze Financial statements by using liquidity, profitability and solvency ratios.

LO2: Define manufacturing cost and prepare an income statement and its supported schedules for an incorporated manufacturing operation with cost distributions.

LO3: Compare between the variable and fixed costs and employ Cost-Volume-profit analyses for planning using different methods.

Question 1: In a cost-volume-profit (C-V-P model) analysis the graph is frequently used in business meetings because it presents a picture of cost relationships within a company.

Required:

1. Briefly describe the type of information and data that you would need in order to prepare a CVP graph (construct a CVP graph for illustration).

2. How to interpret the breakeven point using graph analysis.

Question 2: XYZ specializes in the overnight transportation of medical equipment and laboratory specimens. The company has selected the following information from its most recent annual report to be the subject of an immediate press release and provided the following ratios:

1. The current ratio has changed to 2 from last year's 1.5.

2. The interests' coverage ratio has changed to 5 from last year's 8.

3. The receivable turnover has changed to 8.5 from last year's 6 times.

4. The return on assets ratio has changed to 2.5 from last year to 2.3.

Required: As financial analyst, you are required to think carefully which information (if any) is good news for the company, and which (if any) is bad news. Assuming that Net income this year was $2.4 million. Last year's net income had been $2.0 million.

Question 3: Describe the differences between merchandising and manufacturing companies with regards to inventory the calculation of cost of goods sold.

Question 4: AD Company estimates that variable costs will be 70% of sales and fixed costs will total $1,800,000. The selling price of the product is $10, and 700,000 units will be sold.

Instructions: Using the mathematical equation

(a) Compute the break-even point in units and dollars.

(b) Compute the margin of safety in dollars and as a ratio.

Reference no: EM132506355

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ACC 102 Accounting Principles Assignment : ACC 102/200 Accounting Principles Assignment Help and Solution - Emirates College of Technology, UAE - Assessment Writing Service

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