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FINAL EXAMINATION COVER SHEET
TRIMESTER XXXXXXXXXX
STUDENT INFORMATION
NAME Course Title
ID NUMBER
Signature
and Date
EXAMINATION INFORMATION
SUBJECT IBA102 – Introduction to Business Accounting
NO. OF PAGES INCLUDING COVER SHEET AND BLANK PAGE 6
TOTAL MARKS IN EXAM 100 % OF FINAL GRADE 50%
EXAMINATION STRUCTURE
Sections
Weighting Marks
1. Calculation Questions 2 compulsory
questions
50%
2. Short Answer and Calculations 2 compulsory
questions
50%
TOTAL 100%
INSTRUCTIONS
1. This is a Take-home exam. Textbooks, dictionaries and notes are allowed in the exam.
2. This is an individual exam. You must not speak to other students or look at others’ work.
3. Create a new word document and on top of the first page type your StudentID_First Name_Last
Name_Lecturer’s Name_T2 2022.
4. Do NOT rewrite the question in your exam answers. Just write the number of the question.
5. The typed answers must need to be submitted in Turnitin in Moodle within 24 hours of the given
2
Section 1: Short Answer and Calculations
You are required to attempt the questions below. This section is worth 50 marks and it is compulsory
Question 1 – Costing & Pricing (20 marks)
“Cool Jeans” design and develops customised Jeans for their customers, uses a costing system
for their customers. The company utilise a pre-determined indirect cost rate for allocating
overhead cost toward its customer, with operating hours used as the cost driver.
The company has budgeted allocation base of 2000 operating hours, with budgeted indirect
overhead cost of $60,000.
One of their client (Meghan) ordered a customised jeans. In order to manufacture the customised
jeans, “Cool jeans” needs 1 operating hour.
Other cost related to “Meghan’ order includes:
Cost of direct labour (cutting,
sewing) $45
Cost of direct material (cotton,
jeans, etc) $35
Required:
1. Calculate the predetermined indirect cost rate (PICR) the business used. (show your
calculations) (4 marks)
2. Calculate the total cost to “Cool Jeans” for these sessions. (show your calculations) (6
marks)
3. Assume the business applies a cost-based pricing model to set prices to customers, adding a
mark-up of 60%. What price should “Cool Jeans” charge customer Meghan? Explain your
answer and show your calculations. (4 marks)
4. Explain in your own words, what is the differences between fixed and variable costs. (Please
give some examples) (6 marks)
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Question 2 – Capital Investment Decisions (30 marks)
Cube fashion Pty Ltd considers buying a new model cutting machine that can helps to reduce the
damage in fa
ics and operates twice as fast as the cu
ent machine, the total cost for the new
machine be $550,000.
However, it will
ing an additional net cash flow for the next 5 years before it has to be scrapped
with a $0 value as follow:
Year XXXXXXXXXX,000)
Year XXXXXXXXXX,000
Year XXXXXXXXXX,000
Year XXXXXXXXXX,000
Year XXXXXXXXXX,000
Year XXXXXXXXXX,000
Please calculate the following:
1. Calculate the Net Present Value (NPV) of the project at a discount rate of 14% (7 Marks)
2. Calculate the Net Present Value (NPV) of the project at a discount rate of 18% (7 Marks)
3. Calculate the Payback Period (6 Marks)
4. Prove it whether the IRR (Internal Rate of Return) is 19.60% (6 Marks)
5. Please give your advise whether we should go ahead with purchasing the new machine if
the minimum required rate of retun is 18.5% (Please explain) (4 Marks)
Section 2: Calculations
You are required to attempt the questions below. This section is worth 50 marks and it is compulsory
Question 3: (Budgeting XXXXXXXXXXMarks)
Part A (15 marks)
StarCool Café sales different types of coffee in their Central Park shop has provided the following
information for the year ending 30'th June 2022 and estimates relating to the financial year beginning 1'st
July 2022 (for the whole financial year 2022 from 1’st July 2022 – 30’th June 2023)
Sales for the financial year 2021 for each type of coffee
Product Sales in Unit Selling Price/unit
Flat White 15,000 $ XXXXXXXXXX.00
Affogato 8,500 $ XXXXXXXXXX.50
Cappucino 6,500 $ XXXXXXXXXX.00
Machiatto 4,500 $ XXXXXXXXXX50
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StarCool predicted that there will be a more extra demand. As the Covid-19 restriction has
een eased.
Product Sales in Unit Selling Price/unit
Flat White Increase by 10% Increase by 15%
Affogato Increase by 15% Increase by 10%
Cappucino Increase by 20% Increase by 5%
Machiatto increase by 10% Increase by 5%
Required
Prepare a sales budget for the year ending 30 June 2022.
Part B (15 marks)
StarCool Café also provided the following estimates relating to the first quarter of Financial Year
2022
Cash Sales XXXXXXXXXX,000
Credit Sales XXXXXXXXXX,000
Administration expense XXXXXXXXXX,500
Electricity and Gas expense XXXXXXXXXX,500
Salaries and Wages XXXXXXXXXX,000
Purchase new Office furniture and
equipment XXXXXXXXXX,500
Depreciation of furniture and equipment XXXXXXXXXX550
Payment to Creditors XXXXXXXXXX,000
Receipt from Debtors XXXXXXXXXX,000
The cash balance as of 1 July 2022 was 87,500
Required
Prepare a cash budget for the quarter ending 30 September 2022
Question 4 – Cost Volume Profit Analysis (20 marks)
Bonega Vineto manufactures and sells an exclusive handbag. Price and cost data are as follows:
Selling Price per unit XXXXXXXXXX,499
Variable cost per unit
Direct Raw Materials XXXXXXXXXX
Direct Labour XXXXXXXXXX
Manufacturing overhead XXXXXXXXXX
Selling costs XXXXXXXXXX
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Annual Fixed Costs:
Manufacturing overhead XXXXXXXXXX,000
Selling and administrative XXXXXXXXXX,000
Forecast annual sales (1,200 units)
Required:
1. Calculate total variable cost per unit (Show your calculation) (2 marks)
2. Calculate total fixed cost per unit (show your calculations XXXXXXXXXXmarks)
3. Calculate the contribution margin per unit (show your calculations XXXXXXXXXXmarks)
4. Calculate the
eak-even point in units (show your calculations XXXXXXXXXXmarks)
5. Calculate the
eak-even point in Dollars (show your calculations) (2 marks)
6. Calculate the safety margin in Dollars (show your calculations) (4 marks)
7. Calculate the unit sales needed to achieve a target profit of $600, XXXXXXXXXXmarks)
8. Calculate the unit sales needed to achieve a target profit of $600,000, it the cost of direct
material decrease by $50 (4 marks)
END OF EXAM
Final Examination Cover Sheet
Trimester XXXXXXXXXX
1. This is a Take-home exam. Textbooks, dictionaries and notes are allowed in the exam.
2. This is an individual exam. You must not speak to other students or look at others’ work.
3. Create a new word document and on top of the first page type your StudentID_First Name_Last Name_Lecturer’s Name_T2 2022.
4. Do NOT rewrite the question in your exam answers. Just write the number of the question.
5. The typed answers must need to be submitted in Turnitin in Moodle within 24 hours of the given
Section 1: Short Answer and Calculations
You are required to attempt the questions below. This section is worth 50 marks and it is compulsory
Section 2: Calculations
You are required to attempt the questions below.