GSFM7514 Accounting and Finance for Decision Making Assignment Questions 2026

School

UNITAR International University (UIU)

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Assignment Type

Final Assessment

Subject

GSFM 7514 Accounting and Finance for Decision Making

Uploaded by Malaysia Assignment Help

Date

07/08/2026

GSFM7514 Assignment Questions

Question 1

SAC services provide Air Conditioner maintenance throughout Selangor. The company bases its budget overhead costs on the following data:

Budget Price and Expenses

Price of Services	RM150 per Service
Variable overhead costs:
Cleaning	30 per Service
Maintenance	10 per Service
Outdoor Expense	20 per Service
Fixed overhead costs:
Salaries and wages	15,000 per month
Depreciation	3,000 per month
Utilities	2,000 per month
Premise Rent	5,000 per month

In January, the following actual costs were incurred for 250 services provided:

Cleaning	5,500
Maintenance	2,500
Outdoor Expenses	6,000
Salaries and wages	12,000
Depreciation	3,500
Utilities	1,650
Rent	5,000

Competition in the market has forced SAC Services to reduce the price charged to customers to RM120 for each service.

a. Prepare the Net Operating Income for the Budget and the Actual services.

(10 Marks)

b. Prepare a variance analysis report for SAC Services for the month of January.

(10 Marks)

c. To improve situation, SAC Services is considering 2 proposals. The first proposal is to relocate the business and pay less rent to RM2,000. Salaries and wages are to be reduce to RM11,000. This however will increase the actual outdoor expenses to RM26 per service. The second proposal is by terminating workers and to reduce salaries and wages to RM8,000. This will increase maintenance to RM12 per service. The price of the service will remain at RM120. Evaluate using break even analysis and comment which proposal is best for the company.

(10 Marks)

Question 2

MEMC Company has just completed the second draft of their master budget. The cash budget summary shows a negative cash balance in Quarter 1, 3 and 4. The company is considering financing the deficits with a combination of long term and short-term loans. Short term borrowing will incur a 6% interest rate while a long-term loan interest rate will be 10%. Another plan is to negotiate a favorable term of credit from suppliers.

The Cash budget summary, the budget Income statement and the budget Balance Sheet are shown below.

Evaluate the cash budget situation and suggest actions that can be taken to prepare the company for the next period of operations. Prepare a new revised Cash Budget, revised Income Statement and revised Balance Sheet. Do not include any taxes in your calculations. Include liquidity, profitability, and debt management analysis in your evaluation.

(30 Marks)

MEMC for Budget Year 2025: Cash Budget

Quarter	1	2	3	4
Cash Balance Beginning	32,500	-38,000	32,000	-18,000
ADD: Receipts	450,000	500,000	500,000	500,000
Total Cash Available	482,500	462,000	532,000	482,000
LESS: Disbursements	520,500	430,000	550,000	500,000
Excess (Deficits) of Cash	-38,000	32,000	-18,000	-18,000

MEMC for Budget Year 2025: Income Statement

Sales	2,000,000
Cost of Goods Sold	1,300,000
Gross Margin	700,000
Selling and Administration Expense	576,000
Net Operating Income	124,000
Interest Expense	1,200
Net Income	122,800
Previous Retain Earnings	449,900
Add: Net Income	122,800
Less: Dividends	20,000
New Retain Earnings	552,700

MEMC for Budget Year 2025: Balance Sheet

Current Assets

Cash	-18,000
Account Receivables	150,000
Raw Materials	38,200
Inventories	34,000
Total Current Assets	204,200
Land	100,000
Plant and Machines	830,000
Less: Accumulated Depreciation	392,000
Plant and Machines Net	438,000
TOTAL ASSETS	742,200

Current Liabilities

Accounts Payable	14,500
Total Current Liabilities	14,500

Stockholders’ Equity

Common Stock	175,000
Retained Earnings	552,700
Total Equity	727,700
TOTAL LIABILITIES AND EQUITY	742,200

Question 3

CCID plans to embark on a new investment in 2025 and will require RM15,000,000. The investment is expected to provide a return on invested capital (ROIC) of 16%. As of 31st December 2024, the Net Income stood at RM15,000,000. The company intends to pay Dividends amounting to RM4,500,000 and retained the balance. The number of shares is 10 million units. The expected growth rate of the dividends is 3.13%. The share price is currently RM1.55. The company is currently financed with 50% Debt. The current Beta of the company at this 50% level of debt is 1.2. The risk-free rate is 3% and investment analysts have estimated the Market Return is 18%. The corporate tax rate is 30%.

The company intends to reduce the use of debt and will finance the new project with 30% debt and 70% equity. The FTU Bank has indicated that any loans from the bank will incur a 15% interest rate.

The cost of issuing new shares will be 3% and will be added to the cost of equity.

Evaluate the situation and determine whether the company should go ahead with their plan.

(40 Marks)

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