GIFT UNIVERSITY GUJRANWALA
Semester: Fall 2021
Management Accounting Decision Making (ACC-612)
Assignment No. 2
Please read the following instructions carefully before attempting the assignment solution.
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Deadline for submission of Assignment is February 07, 2022 until 11:59 PM.
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Certain Early submissions will get bonus marks and late submission will suffer a deduction
accordingly.
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Cheating or copying of assignment is strictly prohibited; No credit will be given to copied
assignment. Plagiarism report will be checked for copied work.
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Only solution on the attached google document will be accepted. You will write the report and
do all the workings on the solution document attached for every student separately and then
will turn in the task.
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No separate file in MS word or Excell attached will be accepted and will be awarded zero
marks if submitted so.
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You may prepare CVP chart in Excel and insert the chart as photo in the document.
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Solution Document of Assignment should have proper Title Page mentioning, the;
1. Name of the Student
2. Roll No.
3. Course Title & Code
4. Section
5. Assignment No
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A viva regarding the solution may be conducted to ensure self-efforts.
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You may watch videos which are uploaded on Google Classroom for your reference.
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You can consult the concerned chapters from recommended books and related online materials.
However, keep in mind do not forget to give reference note in such case because it will be treated
as copying and cheating.
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Read question carefully and answer every point, you are required to explain. Show working where
necessary.
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Negative marking will be done for copied assignments and irrelevant details.
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Make sure that you submit the Assignment before due date. No assignment will be accepted after
the due date. Certain Early submissions will get bonus marks and late submission will suffer
a deduction accordingly.
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Total marks available are 50.
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Assignment Questions
Use the case study of Fly Ash Bricks Business Plan which was discussed in the class for Written
Analysis of the case (WAC). For your WAC you would cover the following points.
1. Keeping all points of analysis in requirement 2 and 3 write a comprehensive report regarding your
recommendations as an analyst. The report should accompany the calculations and other qualitative
factors mentioned in requirement 2 as annexures to the report. The report should address the
following points by using the above calculations as logical points in your report.
a. what advice can be given to the owners?
b. Is the proposed project viable?
c. Would you recommend the partners to procced in business?
2. Synopsis of the case mentioning the background and the problem to be solved mentioned in the
case.
3. Brief Qualitative and Quantitative Analysis of the case. The analysis of the case may address the
following questions.
a. Industry analysis comprising of qualitative factors which are relevant in making decision of
the business opportunity.
b. How Breakeven Analysis can be used to evaluate the decision. You need to calculate the
breakeven point in units and sales dollars by using equation method or formula method.
c. Find the breakeven point by using a CVP graph method.
d. How many bricks they would they need to sell for target annual profit of Rs 2.5 million.
Prepare the contribution Income statement at this level of sales. How this target sales
analysis impacts your decision.
e. What is the degree of operating leverage of the company at this level of sales? How this
impact on profit sensitivity? What would be the change in profit if there is a 20% change in
sales.
f. If the Electricity Cost is also volume based, then how DOL is affected with this change.
How would it affect the profit sensitivity of the company?
g. What is the margin of safety of the company in terms of $, units and percentage at the level
of profit of Rs 2.5 million? How would you use this figure in your decision?
h. How does volume affect return on Investment (ROI) and Return on Equity (ROE) at 60%,
80% and 100% capacity utilization? Prepare tabular income statements at these levels to
support your point of view.
Good Luck.
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