CONFIDENTIAL ACIDEC 2018/ACC416 UNIVERSITI TEKNOLOGI MARA FINAL EXAMINATION COURSE : COST AND MANAGEMENT ACCOUNTING COURSE CODE : ACC416 EXAMINATION : DECEMBER 2018 3 HOURS STRUCTION 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) _ the Question Paper ii) an Answer Booklet ~ provided by the Faculty ‘Answer ALL questions in English. DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO This examination paper consists oF 7 printed pages: ‘© Hak Cipta Universiti Teknologl MARA CONFIDENTIAL,CONFIDENTIAL 2 ACIDEC 2018/ACC416 QUESTION 4 A Parasol Corp is a famous company producing various types of trendy umbrella, Recently, the company is planning to introduce a new type of pocket size umbrella (ZRELLA) that would fit into a coat pocket and purse. You are required to classify the following costs involved in producing ZRELLA according to the appropriate cost nature (direct or indirect material / direct or indirect labour / direct or indirect expenses). i, Nylon Taffeta Fabric used in producing ZRELLA. ji. Wages of workers involved in assembling ribs and stretchers of ZRELLA, Production space rental. ZRELLA advertising cost. Wages of product tester who stands in a shower to make sure the umbrella does not leak. Metal and steel used as part of the product component. Cost of a market research survey. Purchase of cutting machine specifically used for designing ZRELLA. Salary of the sales manager. Electricity and water bill for office area. (5 marks) Fun Holiday Inc is an establish travel agency that provides a wide range of Asian holiday packages, cruise deals, group tours and cheap flights. Currently, the company hires one (1) Chief Executive Officer, two (2) managers and five (5) full time agents to run its business operations. Below is a list of costs incurred in October 2018: Chief Executive Officer salary RMi0,000 Managers salaries (80% fixed) FRM5,000 per person Fulltime agents salaries (30% variable) FM2,500 per person ‘Trade association membership fees M500 Professional Indemnity Insurance M200 ‘Web hosting RM100 Maintenance of software: Office booking system M1200 per annum Marketing campaign (90% variable) RM60,000 per annum ‘Space rental (100% fixed) RM3,000 Electricity and water (100% fixed) RM71,000 Depreciation of agency tour bus (100% fixed) RM&4,000 per annum Maintenance of agency tour bus (50% fixed) [RM600 Required: Compute the following costs for the month of October 2018: i Total variable cost ji, Total fixed costs iii, Total cost (10 marks) (Total: 15 marks) (© Hak Cipta Universiti Teknolog! MARA CONFIDENTIAL,CONFIDENTIAL 3 ACIDEC 2018/ACC416 QUESTION 2 A Organic Juicery Enterprise makes handcrafted cold pressed juices that are unpasteurized from 100% pure fruits and vegetables. One of its famous products is “avocado Juice’. The company uses avocado as the main ingredient to produce the Avocado Juice. In order to produce one bottle of Avocado Juice, the company uses 500 grams of avocados. Below are the details of avocados purchased in October 2018. Date Total Ky (October) (RM) 9 6 3,000 500 12 4,550 700 18 6,300 900 24 5,760 800 28 4,560 600 On the 20 October 2018, 100 kilograms of avocados were retuned to supplier because the avocados were rotten. This transaction is to be recorded at the latest purchase price. The transactions relating to the production of Avocado Juice are shown below: Date | Quantity Produced (October) (bottles) a 7,000 15 1,200 24 1,500 29 2,500 Physical stocktaking done as at 31 October 2018 revealed there was only 150 kilograms of avocados available in store. The discrepancies were due to inventory obsolescence. Required: Prepare a store ledger card for the purchase and issuance of avocados (in kg) using First In First Out (FIFO) method. Show clearly the closing inventory balance and total cost of issuance as at 31 October 2018. (17 marks) Nyonya Kitchen is an online entrepreneur who specializes in “Kuih Keria’, ‘One of the ingredients used to produce “Kuih Keria’ is a special mix flour costing RM3.00 per kg. A half dozen of *Kuih Keria’ requires 0.5 kg of special mix flour. Total annual demand is 2,000 dozen of “Kuih Keria". She incurs RM6.00 to place an order and RMO.60 per kg per annum for holding cost. (© Hak Cipta Universit Teknologi MARA CONFIDENTIALCONFIDENTIAL Required: ACIDEC 2018/ACC416 i, Tabulate the relevant total costs if 100, 200, 400 kg of the special mix flour were ordered, (6 marks) ji, Based on your answer in B (I), determine the order size and economic order quantity (EOQ) that minimizes the total cost. QUESTION 3 (1 mark) (Total: 24 marks) The management of Maharaja Berhad hires three employees, Minah, Halim and Salmah. The information about these workers for the month of October 2018 is shown below: Employees Minah Halim Salmah Hours worked 185 hours 160 hours 140 hours Units produced 4,300 units 4,200 units 3,800 units Additional Information: 1. Normal working hours are 160 hours per month. 2, Minah is paid based on hourly rate of RM18 per hour with the overtime rate (if any) given to her is one and a quarter of the hourly rate. 3. Halim and Salmah are paid based on piecework with a guaranteed minimum payment of RM2,700 per month. It is the company’s policy to pay a lump-sum of RM140 for every 200 units produced, Required: i Compute the gross wages for each worker for the month of October 2018. ji, Explain two (2) benefits of giving bonus to the employees. ‘© Hak Cipta Universiti Teknolog! MARA (10 marks) (4 marks) (Total: 14 marks) CONFIDENTIAL,CONFIDENTIAL QUESTION 4 5 ACIDEC 2018/ACC416 ‘Segama Bhd is a food & beverage manufacturing company that has three production departments; Mixing, Cooking and Packaging; and two service departments; store and canteen. The following information relates to the month of October 2018. RM RM Allocated overhead costs: Indirect Materials, Mixing 20,000 Cooking 18,000 Packaging 18,000 Store 4,000 Canteen 3,000 60,000 Indirect Labor Mixing 42,000 Cooking 10,000 Packaging 25,000 Store 5,000 Canteen 3,000 85,000 Other overhead costs: Rent and rates 25,000 Depreciation of equipment 20,000 Insurance of factory 40,000 ‘Supervisor's salary 46,000 Electricity 15,000 Additional Information: 1. Total | Mixing [Cooking [Packaging | Store | Canteen Floor Area (Sq.m) | 13,000] 3,500] 3,000. 5,000 | 1,000 ‘500 No of employees 200 [35 40 80 | 25 20 Kilowatt hours kwh) 4,800| 400 800 200| 100 300 Equipment value (RM) 100,000 | 35,000 | 30,000| _25,000| __0|_10,000 10,000 | 2,500 | _1,500 5,000| | 1,000 Direct labor (hours) | 50,000 | 45,000 | 10,000 | 25,000 | 0. 0 Machine (hours) | 30,000] 8,500 | 15,000. 6500/0 0 2. The percentage basis for re-apportionment of service departments: Total_| Mixing | Cooking [Packaging | Store | Canteen ‘Store 100% | 40% | 30% 20% o | 10% Canteen 100% | 20% | 20% 50% | 10% | 0 © Hak Cipta Universiti Teknologi MARA CONFIDENTIALCONFIDENTIAL 6 ACIDEC 2018/ACC416 3. The Mixing and Cooking Department use machine hours while the Packaging Department uses direct labour hours as the basis for overhead absorption. 4. Actual data for the month of October 2018 is shown below: Mixing ‘Cooking Packagin, ‘Actual direct wages (RM) 76,000 65,500 60,000 ‘Actual machine hours 8,000 10,000 6,000 ‘Actual labour hours 40,000 8,000 20,000 [Actual overhead (RM) 58,500 55,000 40,500 Required: ai. Prepare the Overhead Analysis Sheet for the company. Re-apportion the overhead costs of service departments to the production departments using direct method. All calculations are to be rounded up to the nearest RM. il. Based on your answer in part a (i), compute the pre-determined departmental overhead absorption rate for production departments, ii, Using the OAR calculated in a (Ii) above, compute the amount of over or under absorption of overheads for each department. (21 marks) b. Selling overhead refers to the costs incurred in securing orders and it is one type of non-production overheads. Give five (5) examples of selling overheads. ( marks) (Total: 26 marks) QUESTION 5 ‘TupperCare Sdn Bhd is a manufacturer of food containers in Selangor. In early 2017, the company produces Airtight Food Storage Container (AFSC) and able to sold more than 70,000 units in 2017. The selling price of AFSC is RM90 per unit. The standard cost of producing one unit of AFSC is shown below: RM, Direct labour 12.00 Direct material 27.00 Variable production overhead 6.00 Fixed production overhead 15.00 Other costs involved in producing AFSC are as follows: Fixed Administrative Expenses RM396,000 per annum Variable Selling and Distribution Expenses 10% of sales © Hak Cipta Universiti Teknologi MARA CONFIDENTIALCONFIDENTIAL Below are the details of the productions and sales of AFSC for 2018: March units. Production 8,100 Sales 7,200 Additional Information: April units: 9,300 9,000 ACIDEC 2018/ACC416 1. The fixed production overhead is absorbed based on a budgeted normal output of 104,400 units per annum. 2. There is no opening inventory for the month of March 2018. Required: a. Prepare the Statement of Profit or Loss of TupperCare Sdn Bhd for the month of April 2018 using the Marginal Costing Approach and Absorption Costing Approach. (16 marks) b. Explain the difference in the profits given by the two approaches. END OF QUESTION PAPER (© Hak Cipta Universiti Toknologi MARA (6 marks) (Total: 21 marks) CONFIDENTIAL