https://cdn.fbsbx.com/v/t59.2708-21/305877094_3091169151158187_5691996715982306265_n.pdf/IBA102-Final-Exam-T2-2022-Vers-2.pdf?_nc_cat=109&ccb=1-7&_nc_sid=0cab14&_nc_ohc=nV9gQFxL4o8AX-Oqy7Q&_nc_ht=cdn.fbsbx.com&oh=03_AVJt9T3GTlDTQihTOC806v4bpEHXvlYhu0eP6vPbKCPR-A&oe=631AAB6D&dl=11 FINAL EXAMINATION COVER SHEET TRIMESTER 2 - 2022 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) 3 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 fabrics and operates twice as fast as the current machine, the total cost for the new machine be $550,000. However, it will bring an additional net cash flow for the next 5 years before it has to be scrapped with a $0 value as follow: Year 0 (550,000) Year 1 150,000 Year 2 200,000 Year 3 250,000 Year 4 200,000 Year 5 100,000 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) (30 Marks) 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 $ 5.00 Affogato 8,500 $ 5.50 Cappucino 6,500 $ 6.00 Machiatto 4,500 $ 4.50 4 StarCool predicted that there will be a more extra demand. As the Covid-19 restriction has been 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 65,000 Credit Sales 18,000 Administration expense 10,500 Electricity and Gas expense 5,500 Salaries and Wages 38,000 Purchase new Office furniture and equipment 4,500 Depreciation of furniture and equipment 550 Payment to Creditors 5,000 Receipt from Debtors 17,000 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 1,499 Variable cost per unit Direct Raw Materials 250 Direct Labour 150 Manufacturing overhead 55 Selling costs 20 5 Annual Fixed Costs: Manufacturing overhead 625,000 Selling and administrative 175,000 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). (2 marks) 3. Calculate the contribution margin per unit (show your calculations). (2 marks) 4. Calculate the break-even point in units (show your calculations) (2 marks) 5. Calculate the break-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 $600,000 (4 marks) 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 2 - 2022 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.