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Summer Semester 2020 ACCT 202: Managerial Accounting I Assignment 2 Please answer all of the following questions. (hand written notes or excel can be used. If you wand-write, scan all the pages in a single file and submit in the moodle. Please don't use pencil. Use pen) 1. Pfizer pharmaceuticals has the following costs (in OMR). Direct Materials 900.000 Direct Labor 700,000 Supplies 190,000 Utilities. Variable 100,000 Utilities, Fixed 50,000 Indirect labor, variable 100.000 Indirect labor, Fixed 70,000 Depreciation 120.000 Property taxes Supervisory say 100,000 Administrative expenses, variable 100.000 Selling expenses were OMR330,000 (including OMR80,000 that were variable) and general administrative expenses were OMR160,000 (including 40,000 that were variable). Sales were OMR 3,000,000. Direct labor and supplies are regarded as variable costs. A. Prepare two income statements, one using the contribution approach and one using the absorption approach. B. Suppose that all variable costs fluctuate directly in proportion to sales and that fixed costs are unaffected over a very wide range of sales. What would operating income have been if sales had been OMR 2,500,000 instead of OMR 3,000,000? Which income statement did you use to help obtain your answer? Why

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