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AC/APR 2011/ACC116/165/211

UNIVERSITI TEKNOLOGI MARA FINAL EXAMINATION

COURSE COURSE CODE EXAMINATION TIME

INTRODUCTION TO COST ACCOUNTING / COST ACCOUNTING ACC116/165/211 APRIL 2011 3 HOURS

INSTRUCTIONS TO CANDIDATES 1. 2. 3. 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) the Question Paper an Answer Booklet - provided by the Faculty

4.

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

This examination paper consists of 6 printed pages
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CONFIDENTIAL QUESTION 1 A.

AC/APR 2011/ACC116/165/211

Choose a term (i-viii) that best describe each of the following situations(each term can only be used once): i. ii. iii. iv. v. vi. vii. viii. 1. Prime cost Fixed cost Product costs Period cost Conversion cost Controllable cost Direct cost Direct proportion Depreciation for the car used by the sales representative is treated as in the income statement. In terms of cost behaviour, it is a Wood used in making furniture is a . are costs that are necessary and integral part of producing the finished product. Variable costs are costs that vary in to changes in the level of activity. is a cost that a given manager can regulate or influence during a particular time period. Direct labour and overheads costs also known as Total direct cost is known as (4 marks)

2. 3. 4. 5. 6. 7.

B.

Listed below (i-vi) are various costs that are incurred in several organizations You are required to classify each cost a. b. i. ii. iii. iv. v. vi. according to its behaviour as variable or fixed costs and; according to its function as Production, Administration or Selling and Distribution costs Telekom Malaysia paid RM200.000 to advertise in TV3 for Chinese New Year promotion Steering wheels installed in Myvi car by Perodua Directors of Honda Bhd are paid bonuses based on profit for the year Astro Bhd pays its sales agent 5% commission for each unit sold Insurance on KFC Holding corporate building is paid yearly Sugar used in production of carbonated drink, Pepsi (6 marks)

There are several differences between Cost and Management Accounting and Financial Accounting. State any two (2) differences (2 marks) (Total: 12 marks) Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

C.

CONFIDENTIAL QUESTION 2 a)

AC/APR 2011 /ACC116/165/211

Berjaya Cetak Sdn Bhd prints Sunday Times newspaper. The company consumes 36,000 litres of ink every month. The cost of storing the ink is RM3 per litre per annum. The ordering cost is RM120 per order Required: i. Calculate the company's Economic Order Quantity using equation method. (2 marks) Calculate total cost (ordering and storage) for the ink. (3 marks)

ii.

b)

Tipah Restaurant, sells "Nasi Beriyani". The restaurant orders "Beras Basmathi" from Faiza Food Industries. The following transactions for "Beras Basmathi" are recorded in March 2011 March 1 Balance from last month, 15,000 kg @ RM8.50 per kg 3 Purchases 8,000 kg @ RM9.30 7 Issues 17,000 kg 12 Purchases 9,000 kg @ RM9.50 15 Purchases 8,000 kg @ RM9.70 17 2,000 kg of damaged "Beras Basmathi" were returned to Faiza Food Industries. This transaction should be recorded based on the last purchase price 20 Issues 12,000 kg 23 Purchases 7,500 kg @ RM 10.20 24 Purchases 6,000 kg @ RM10.40 28 Issues 15,000 kg 31 The physical stock taking showed a balance of 7,000 kg of "Beras Basmathi" in the store Required: i. Prepare the Store Ledger Card for "Beras Basmathi" during March 2011, using Last in First Out Method (LIFO). (15 marks) Briefly explain three (3) recorded stocks. causes of discrepancies between actual stocks and (5 marks) (Total: 25 marks)

ii.

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CONFIDENTIAL QUESTION 3

AC/APR 2011/ACC116/165/211

The Machining Department in Taming Seri Sdn Bhd has three workers.Along, Angah and Uda. The following information relates to the performance of each worker in Machining department for the first week of February 2011. Along is a skilled worker, while Angah is a semi skilled worker and Uda is an unskilled worker Worker Along Angah Uda Actual output 268 230 200 Standard per unit RM2.50 RM2.30 RM2.00 rate Actual hours worked 43 45 49 Rate per hour RM15 RM12 RM9

The normal working hour for the business is 8 hours a day for five days. Each worker is eligible for overtime. The overtime premium is 50% of hourly rate. Required: (a) Determine the gross pay for each employee according to: i. Time based (includes overtime) (9 marks) ii. Output based(straight piecework) (3 marks) Taming Sari is planning to change the method of remuneration of employee by introducing differential piecework. The scheme will be as below First 100 units of output in a week RM2.00 per unit Output 101 to 200 units in a week RM2.30 per unit on additional units over 100 Output 201 to 250 units in a week RM2.50 per unit on additional units over 200 Output over 250 units in a week RM3.00 per unit on additional units over 250 (b) Determine the gross pay for each employee according to differential piecework. (9 marks) Give two (2) advantages and two (2) disadvantages of piecework method. (4 marks) (Total: 25 marks)

(c)

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CONFIDENTIAL QUESTION 4

AC/APR 2011/ACC116/165/211

Budgeted production overheads allocated and apportioned to cost centres in a factory for a year 20X1, along with additional data, are: Production Cost Centre P3 P1 P2 RM18,543 RM41.256 RM13,579 RM28.230 RM48.750 RM25.240 Service Cost Maintenance RM4.230 RM4.575 Centre Canteen RM6.250 RM5.250

Allocated overheads Apportioned overheads Additional data: No of employees Direct labour hours Machine hours Maintenance hours

15 6,500 3,500 450

18 7,250 1,250 525

21 4,680 6,500 300

225

Overheads allocated and apportioned to Service Cost Centre (Maintenance and Canteen) are reapportioned to the Production Cost Centre using repeated distribution method. Production overheads are absorbed based on the direct labour hour for P1 and P2, while for P3 based on machine hour Required: (a) Reapportion the service cost centre overheads using suitable basis (to two decimal places). (13 marks) Calculate an overhead absorption rate for each production cost centre. (3 marks) (c) At the end of year 20X1 .actual overheads and activities are as follows: Department P1 P2 P3 Production overheads Direct labour hours RM55.000 7,560 RM105,000 7,323 RM45.000 4,721 Machine hours 3,454 2,250 7,123

(b)

Determine under or over absorption of overhead in each of the three (3) production departments (6 marks) (d) State an appropriate basis of apportionment for each of the following production overhead costs: i. ii. iii. Factory rent; Insurance for machine; Materials handling. (3 marks) (Total: 25 marks)
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CONFIDENTIAL QUESTION 5

AC/APR 2011/ACC116/165/211

Emmanuelle Bhd has three (3) production departments which involve in producing special product "Gambit". In the March 2011, a special order of Job M1601 was received. The following costs had been incurred for Job M1601: Direct Materials Material AB Material CD Direct Labour Department XX Department YY Department ZZ Administration expenses Selling and distribution cost Hire of special machine Machine hours Department XX Department YY Department ZZ

8,500 units @ RM13.50 per unit 7,250 units @ RM12.50 per unit 3000 hours @ RM8.50 per direct labour hour 4500 hours @ RM9.25 per direct labour hour 7500 hours @ RM6.50 per direct labour hour 5% on production cost RM53.250 RM50.250 175 hours 350 hours 450 hours

Additional information for Job M1601: Production overhead absorption rate for Department XX and YY are based on direct labour hour. For Department ZZ, it is based on machine hour rate. Data for the cost centres are as follows: Department XX RM45,000 5,250 5,150 3,250 3,150 Department YY RM58,000 6,250 6,150 3,750 3,500 Department ZZ RM65.000 4,500 4,250 3,150 3,450

Budgeted overheads Budgeted labour hours Actual direct labour hours Budgeted machine hours Actual machine hours

The management had set a target profit of 35% on selling price for Job M1601

Required: (a) Calculate the overhead absorption rate for each department. (3 marks) (b) Prepare a Job Cost Sheet for Job M1601 and show clearly the prime cost, total production cost, total cost and the selling price. (10 marks) (Total: 13 marks)

END OF QUESTION PAPER

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