exam135.08 - Islamic Univ of Gaza Faculty of Commerce...

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Islamic Univ. of Gaza Advanced Managerial Accounting Faculty of Commerce Accounting Department Prof. Salem Helles Thursday 22/5/2008 Final Exam Name: ____________________________________ Std No.______________ Question One:- Gaza Farms produces strawberries and raspberries. Annual fixed costs are $ 15,600. The cost driver for variable costs is pints of fruit produced. The variable cost is $ .75 per pint of strawberries and $ .95 per pint of raspberries. Strawberries sell for $ 1.10 per pint, raspberries for $ 1.45 per pint. Two pints of strawberries are produced for every pint of raspberries. 1- Compute the number of pints of strawberries and the number of pints of raspberries produced and sold at the break-even point. 2- Suppose only strawberries are produced and sold. Compute the break-even point in pints. 3- Suppose only raspberries are produced and sold. Compute the break-even point in pints. Question Two:- Saed Salem owns and operates a restaurant. Her fixed costs are $ 21,000 per month. He serves luncheons and dinners. The average total bill (excluding tax and tip) is $ 19 per customer. Salem's present variable costs average $ 10.60 per meal. 1- How many meals must he serve to attain a profit before taxes costs $ 8,400 per month? 2- What is the break-even points in number of meals served per month? 3- Salem's rent and other fixed costs rise to a total of $ 29,925 per month and variable costs also rise to $ 12.50 per meal. If increases her average price to $ 23, how many meals must she serve to make $ 8,400 profit per month? 4- Assume the same situation described in number 3. Giraud's accountant tells her she may lose 10% of her customers if she increases her prices. If this should happen, what would be Giraud's profit per month? Assume that the restaurant had
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