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AC/APR 2011/ACC325

UNIVERSITI TEKNOLOGI MARA FINAL EXAMINATION

COURSE COURSE CODE EXAMINATION TIME

: : : :

MANAGEMENT ACCOUNTING AND FINANCE ACC325 APRIL 2011 3 HOURS

INSTRUCTIONS TO CANDIDATES 1. 2. 3. 4. This question paper consists of five (5) questions. Answer ALL questions in the Answer Booklet. Start each answer on a new page. Do not bring any material into the examination room unless permission is given by the invigilator. Please check to make sure that this examination pack consists of: i) ii) iii) the Question Paper an Answer Booklet - provided by the Faculty the Graph Paper - provided by the Faculty

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

This examination paper consists of 5 printed pages
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CONFIDENTIAL QUESTION 1 a)

AC/APR 2011/ACC325

Cost can be classified in many different ways such as according to their behaviour or functions. Explain briefly those two classifications. (12 marks) Provide two (2) similarities and two (2) differences of financial accounting information and management accounting information. (8 marks) (Total: 20 marks)

b)

QUESTION 2 BenC Sdn Bhd manufactures tyre for car manufacturers in Malaysia. The tyres were made in a series of three process centers namely Process A, Process B and Process C. Below is the relevant cost involved for March 2011: i. In Process A, input of material is 40,000 kilograms at RM20 per kilogram, direct labor cost incurred was RM250,000, direct expenses RM 160,000 and overhead costs amounted RM240,400. During Process B, material was added into the production amounted to RM350,000, direct labour cost incurred was RM250.000, direct expenses RM50.000 and overhead cost RM84.580. In the final process, Process C there was no additional material, but direct labour cost incurred amounted to RM 100,000, direct expenses RM50.000 and overhead cost RM66.600.

ii.

iii.

Based on previous experience, the company estimates normal losses as a percentage of input for each process as follows: Normal Loss 2% 4% 5% Scrap Value nil RM10.00 per unit RM20.00 per unit

Process A Process B Process C

The output for the processes is: a is. Process A Process B Process C 38,500 units 38,000 units 36,100 units

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CONFIDENTIAL Required: a)

AC/APR 2011/ACC325

Prepare Process A account, Process B account and Process C account. (15 marks)

b)

Prepare Abnormal Loss account and/or Abnormal Gain account. (2 marks)

c)

State three (3) reasons for process losses. (3 marks) (Total: 20 marks)

QUESTION 3 Paku Besi Construction has been awarded a contract to renovate a building in Putra Klang. The contract price is RM750.000. The work started on 1 July 2010 and is due to be completed within 12 months from the start date. Paku Besi Construction accounting year end is on 31 March each year. The following costs relate to the contract: Equipment and tools on site (at cost) Materials issued to site Additional materials purchased Cement and sand purchased Fuel expenses Direct wages expenses Direct wages accrued Insurance expenses Other expenses Additional information: 1. Paku Besi Construction depreciates its equipment and tools at 10% per annum on monthly basis. Materials on site as at 31 March 2011 was RM40.000. It is estimated that the company is going to incur further cost of RM90.000 to complete the contract. The value of work certified at the end of the period was RM600.000 and cash received relating to work certified was RM480.000. Profit is to be computed based on cost of work done. RM 100,000 30,000 50,000 20,000 4,000 10,600

1,500 5,000 80,000

2. 3.

4.

5.

Required: a) Prepare a construction in progress account for the year ended 31 March 2011. (12 marks) CONFIDENTIAL

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CONFIDENTIAL b)

AC/APR 2011/ACC325

Prepare a contractee account as at 31 March 2011. (3 marks)

c)

State two (2) characteristics of contract costing. (2 marks)

d)

Give three (3) examples of job that using contract costing. (3 marks) (Total: 20 marks)

QUESTION 4 CT Square has projected production and sales volume for the month of June 2011 is 20,000 units. The price and cost data is given below. RM 14.00 50,000 70,000 20,000 20,000 25,000 20,000

Selling price (per unit) Direct material Direct labour Factory rental Manufacturing overhead Administrative overhead Selling and distribution overhead

Direct material and direct labour are variable costs while all other costs are fixed. Required: a) Calculate the breakeven point in unit and margin of safety in unit. (4 marks) b) If CT Square wants to maintain a profit of RM50.000, determine the number of production should it produce and sell? (3 marks) The company estimates that the direct material costs will increase by 20% and an additional advertising costs of RM5.000. Calculate the new breakeven point in units. (5 marks) Refer to original data, construct a break even chart showing: i. ii. iii. Breakeven point Margin of safety Budgeted net profit. (8 marks) (Total: 20 marks)

c)

d)

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CONFIDENTIAL QUESTION 5 a)

AC/APR 2011/ACC325

List three (3) reasons for using standard costing. (3 marks)

b)

State a situation where the variance can be identified as favourable variance and unfavourable (adverse) variance. (2 marks) RIZMA Enterprise manufactures a product, Madeeha at its factory in Kuala Langat. The company operates a standard costing and variance analysis accounting. As assistant management accountant, you are responsible for preparing the monthly operating statements. Budgeted and actual data for the month of March 2011 are given below: Budgeted and standard cost data: Budgeted sales and production for the month: 10,000 units Standard cost for each unit of Madeeha: Direct material: 10 kg @ RM2 per kg 5kg@RM10perkg Direct wages: 5 hours @ RM6 per hour Fixed production overhead is absorbed at 200% of direct wages Actual data for production and sales of 9,000 units: Direct materials consumed: X: 96,000 kg @ RM2.40 per kg Y: 44,000 kg @ RM8.40 per kg Direct wages incurred: 46,000 hours at RM6.40 per hour Fixed production overhead incurred: RM580,000 Required: Calculate the following variances: i. ii. iii. iv. Direct material usage variances Direct material price variances Labour efficiency variance Labour rate variance (15 marks) (Total: 20 marks) X: Y:

c)

END OF QUESTION PAPER

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