CONF1DENTIAL

AC/SEP 20141ACC11611651211

UNIVERSITI TEKNOLOGI MARA

FINAL EXAMINATION

COURSE : INTRODUCTION TO COST ACCOUNTING l COST

ACCOUNTING
COURSE CODE : ACCII61165/211
EXAMINATION : SEPTEMBER 2014
TIME : 3HOURS

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

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO 50

This examThation paper consists of 7 printed pages
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CONFIDENTIAL 2 AC/SEP 20141ACCII6/165/211

QUESTION 1

a. State any three (3) roles and responsibilities of a cost accountant or a management
accountant towards the company.
(3 marks)

b. ldentify the following costs based on their functions

• Administration cost
• Production cost
• Marketing, Selling and Distribution cost
• Finance cost
• Research and Development cost

i. Advertising costs to promote a new product

ii. Depreciation of machines in Assembly Centre
iii. Consultancy costs paid to a company conducting a survey on a new product
iv. Muna Boutique purchased 3,000 meters of fabric for new clothing line
V. lnterest on loan borrowed by Sani for setting up his business
(5 marks)
(Total: 8 marks)

QUESTION 2

a. i. State the differences between direct material and indirect material.

(2 marks)

ii. Provide an example of a direct material and indirect material.

(1 mark)

iii. List the functions and essential information contained in the following documents

1. Store requisition notes

2. Goods received notes
(4 marks)

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CONFIDENTIAL 3 AC/SEP 2014/ACCI 16/165/21 1

b. Fkri Enterprise purchases and sells a single product caiied Kristy. The company
maintains a perpetual inventory system. The company values its stock based on the
Last-in-First-out (LIFO) method.

Opening stock for January 2014 of Kristy was 800 units at a total cost of RM2,000.
The transactions during the month are as follows:

Purchases lssues
Date Units Total Value Units
(RM)
3January 11500 47500 -
6 January 27000 67400
9 January - - 27800
12January 3,000 107500 -
15 January*
20 January - - 27500
28January - - 11200

Additional information:

a. Fikri Enterprise returned 300 units of Kristy to the store due to excess taken.
These units were purchased on 6 January.

b. During a physical stock count at the end of January, there were 1,000 units of
Kristy in store.

Required:

i. Prepare a Store Ledger Card for January 2014 using the Last-in-First-out (LIFO)
method of pricing issues of raw material and show the value of closing stock.

(14 marks)

ii. State two (2) advantages and two (2) disadvantages of LIFO method in valuing
the stocks.
(4 marks)

iii. State three (3) possible reasons for any discrepancy to occur between the
balance as per store ledger card and the physical stock count.
(3 marks)
(Total: 28 marks)

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CONFIDENTIAL 4 AC/SEP 2014/ACCII6/165/211

QUESTION 3

a. Muhammad commenced his business, Mafh Bakery in January 2014. Muhammad

empIoys Pn. Anis, a very experienced baker and Cik Izzah, who was a cupcake seller
for the last 3 years. Both of them are responsible to produce cakes and cupcakes
which are ordered by Mafh Bakerys customers.

Since the demand has increased, Muhammad hires Encik Amzar Jalil as a driver for
his bakery. At the same time, Cik Athirah has been appointed as an accountant in
Mafh Bakery. The business operates daily from 8.00 am to 7.00 pm, and is being
monitored consistently by his son, Farid who works as a cashier. The company also
hires Hafie as a security guard.

Required:

ldentify direct Iabours and indirect labours amongst the workers mentioned above.
Give reasons for each of your answer.
(6 marks)

b. Due to financial insolvency Muhammad has sold his business to Mohd Rafiq. Rafiq,
then restructured the business and hire another four workers, Amin, Hana, Ashikin and
Shatirah. Amin and Hana are paid on hourly worked, while Ashikin and Shatirah are
paid on the number of units produced.

Payment to Ashikin and Shatirah are based on straight piecework and differential
piecework respectively. They will be paid on good units only and are promised a
monthly guaranteed minimum wages of RMI ,200.

The workers normally work seven (7) hours a day, Monday to Friday a week. Overtime
rate will be at 150% of the rate. The following information relates to the four workers
for the month of January 2014.

Unit Hours Rate per Rate per Defected

produced Worked Hour(RM) Unit(RM) units
Amin - 50 20 - -
Hana - 40 30 - -
Ashikin 50 44 20 30 2
Shatirah 60 45 30 20 O

The differential piecework wages will be as follows:

Up to 20 units RM1O per unit

21 - 40 units RMI2 per unit
41 - 50 units RM15 per unit
51 units and above RM20 per unit

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CONFIDENTIAL 5 AC/SEP 2014/ACCII6/1651211

Required:

i. Calculate the gross wages for the four workers of Mafh Bakery.
(13 marks)

11. State one (1) advantage and tWo (2) disadvantages of differential piecework
scheme of remuneration.
(3 marks)
(Total: 22 marks)

QUESTION 4

Namia Manufacturing Sdn Bhd is preparing its budgeted production overhead and managed
to determine the apportionment cost of those overhead to products. There are five centres
consists of 3 production centres and 2 service centres.

For the year 2013, cost centre expenses and related information have been budgeted as
follows:

Cost centre Basis of Apportionment

Canteen Number of empioyees
Maintenance Maintenance hours

Total Machine Machine Assembly Canteen Maintenance

Centre Centre Centre Centre Centre
1 2
RM RM RM RM RM RM
lndirect labour 78,560 ? 97980 131684 223638 181400
lndirect 167300 81480 ? 21300 0 0
materials
lndirect 121600 87420 0 ? 0 27101
Expenses
Apportionment 81 1 571 32 7 410 221220 141850 87841 3,250
Cost

Additional information:

Total Machine Machine Assembly Canteen Maintenance

Centre Centre Centre Centre Centre
1 2
Maintenance 100 40 30 20 10 0
hours
Direct labour 35 7 000 8 7 000 67200 207800 0 0
hours
Machine 25,700 7 7 200 18,000 21400 0 500
usage hours
Numberof 17630 450 400 380 0 400
employees

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CONFIDENTIAL 6 AC/SEP 2014/ACCI 1 6/165/21 1

Required:

a. Calculate the missing value for the indirect labour, indirect materials and indirect
expenses.
(3 marks)

b. ldentify a suitable basis of apportionment for the overhead costs listed below:

i. lnsurance on building
ii. Depreciation on machinery
iii. Electricity expenses
iv. lnspection expenses
V. Rent and rates of building
vi. Utilities expenses
(3 marks)

C. Prepare an overhead analysis sheet for Namia Manufacturing Sdn Bhd using the
repeated distribution method (your answer to the nearest Ringgit). Based on your final
amount of the total overhead after re-apportionment, calculate the overhead
absorption rate (OAR) for each of the three productions centre below using the
following basis:

i. Machine Centre 1 - Machine Usage Hours

ii. Machine Centre 2 - Machine Usage Hours
iii. Assembly Centre - Direct Labour Hours
(14 marks)

d. Calculate any under or over absorption of overheads if the actual activity for the year
2013 are as follows:

Machine Centre Machine Centre Assembly Centre

1 2
Actual overhead RM607304 RM467983 RM671608
Direct labour hours 77400 77210 267340
Machine usage hour 57400 161880 37100

(5 marks)

e. State three (3) problems that might arise when apportioning service department costs
to production departments.
(3 marks)
(Total: 28 marks)

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CONFIDENTIAL 7 AC/SEP 201 4/ACCI 1 6/1 65/21 1

QUESTION 5

MZ Sdn Bhd is a wooden chair producer. During the month of May 2014, a special order
(Batch No. 50888) of 10 wooden chairs were received from Pahang. The material such as
woods, nails and varnish are required in making these chairs. The following information is
avaiiable for Batch No. SC888:

RM
Woods RM11500
Nails RM300
Wages/Salaries:
Chair maker (Completed job within 10 days) RM50 per day
Supervisor RM800
Designer fees RM1 ,000
Salesman commission RM200
Driver for delivery RM50
Varnish RM250

Required:

i. Prepare a job cost sheet for Batch No. SC888. Show clearly:

a. prime cost
(4 marks)
b. total production cost
(3 marks)
C. total cost and
(2 marks)
d. selling price
(3 marks)
The management target profit margin is 30% on sales.

ii. Describe two (2) characteristics ofjob costing.

(2 marks)
(Total: 14 marks)

END OF QUESTION PAPER

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