College of Business Administration, University of Sharjah
Mgt. Acc. and Control Systems - 0306613
Fall Semester (2019/2020)
Assignment 1
Mustafa Al Rashedi
U19102890
1)
Units produced and sold
Particulars
80,000
100,000
120,000
Variable Cost
Fixed Costs
240,000.00
320,000.00
560,000.00
300,000.00
320,000.00
620,000.00
360,000.00
320,000.00
680,000.00
Variable Cost
Fixed Costs
3
4
7
3
3.2
6.2
3
2.67
5.67
Total Costs
Total Costs
Cost per unit
Total Cost per unit




Variable cost per unit is = 240,000/80,000 = AED 3.00 per unit
Variable cost at AED 3.00 per unit remains same irrespective of units produced.
So, the Variable Cost per unit remains same in all 3 cases.
Since units produced differ – FC per unit changes to AED 3.2 and AED 2.67 when
production increases to 100,000 and 120,000 respectively
2)
Contribution Income format
Particulars
Amount (in $)
Sales
715,000.00
(-) Variable Expenses
330,000.00
Contribution Margin
385,000.00
(-) Fixed Expenses
320,000.00
Net Operating Income
65,000.00

Sales = Units produced x Selling price
110,000 units x $6.50 = $715,000

Variable expenses = Units produced x Variable cost per unit
110,000 units x $3 = $330,000

Contribution Margin = Sales – Variable Expenses
$715,000-$330,000 = $385,000

Fixed expenses remain same at $320,000

Net Operating Income = Contribution Margin – Fixed Expenses
$385,000-$320,000 = $65,000.