Concepts and Practices of TMA Management Accounting

Concepts and Practices of TMA Management Accounting


Question 1: Break-even analysis

The TMA covers the concepts and practices of management accounting in business. The objective is to assess students’ understanding of one of the key concepts in management accounting that has emerged as an alternative to traditional cost accounting methods. In recent years, the nature of industrial production has changed fundamentally, with increasing capital intensity, overhead costs based on machinery production tending to become more dominant, and the international market becoming more competitive. This TMA requires the application of course concepts. The TMA learning objectives are:

  1. Improves students‘ ability to understand relationship analysis between cost and volume and benefits.
  2. Emphasize the importance of a cash budget for your business.
  3. Assess students’ understanding of the key learning points of Units 2, 3 and 4.
  4. Expand students’ knowledge of the realities of the management accounting profession.
  5. Develop students’ communication skills. B. Write notes, write essays, analyze and present material.

Develop the ability to understand and operate the nature of real management accounting tools. TMA expects:

In addition to supporting materials, see our various learning units.

You can easily find information on the Internet.

Present your findings within 2,000 words ±10%.

12 point Microsoft Office Word/Excel and Times New Roman fonts should be used.

You must read and follow the instructions below carefully. Each part of the process is graded against the assignment.

Comtech Co., Ltd. manufactures mobile phones. Last year, Comtech sold 20,000 cell phones at $100 each. Total cost he is $1,800,000, of which $800,000 is considered fixed cost. To improve its products, the company is looking to replace $16 parts with new, better parts for $26 each next year. New machines are also needed to increase the production capacity of the factory. The machine is priced at $120,000, has a 5-year lifespan, and a salvage value of $20,000. Companies depreciate all fixed assets on a straight-line basis. (Ignore corporate tax.)


  1. Calculates the break-even point for innovation in units over the past year. (10 points)
  2. Calculate the number of units the company had to sell last year to earn his $200,000. Please prove your answer. (10 points)
  3. If Comtech increased the selling price by $20 and purchased new parts and machinery, calculate the new contribution margin, new fixed costs, and number of units the company would have to sell to achieve the same net profit as last year. To do. (20 points)

Hawthorn Manufacturing needs to create a cash budget for December 2021. Cash on hand in early December is $31,000. Actual sales for October and November and projected sales for December are as follows:

InformationOctober ($)November ($)December ($)
Cash Sales13,00010,50014,800
Sales on Account40,00060,00080,000
Total Sales53,00070,50098,800

Account sales are collected over a 3-month period at the following rates:

10% on sale months,

70% in the month following the sale

18% in the second month after sale

The remaining 2% are irrecoverable.

(a) December share purchases total $60,000. 20% is paid in December. The liability from November inventory purchases is $38,000 and is expected to be fully settled in December.

(b) December SG&A expenses are expected to be $25,000. Of that, $5,000 is depreciation expense.

(c) $40,000 worth of equipment purchased in cash in December, with $6,000 in other cash outlays due to him in December; Prepare December cashing and December cash budget. Present all features clearly (25 points)

Adam owns a garage that he built for $8,000 a few years ago. He decided to use his free time to build and sell surfboards. The garage will be depreciated over its 20-year useful life. Adam discovers that he needs $60 of lumber to make one surfboard. He will have students do most of the work and will pay $70 for each completed surfboard. He plans to rent tools for $400 a month. Adam withdrew money from his bank savings account to prepare the funds he needed to start his business. This savings earned an interest rate of 6% per annum. Advertising agencies process ads for $200 per month. Adam hires a student to sell his surfboards and pays a commission of $40 per board.

Using the information/text above, identify all possible examples of the following cost types (one item may be identified as multiple cost types):

Cost ItemYour Answer
Variable cost (2 marks)
Fixed cost (2 marks)
Selling or administrative cost (2 marks)
Product cost (2 marks)
Manufacturing overhead cost (2 marks)
Sunk cost (2 marks)
Opportunity cost (2 marks)
Differential cost (between the alternatives of producing or not producing surfboard) ( 1 mark) 

Most accounting tasks can be divided into financial accounting and operational accounting. Explaining the difference between these two aspects of accounting makes sense because each represents a distinctly different career path. Describes the interface between financial accounting and operational accounting. Is one more important than the other? Discuss the rationale for your answer.

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