CONFIDENTIAL

P3116 : Basic Cost Accounting

QUESTION 1 Miss Lily is interested in attending a walk-in interview as an Assistant Cost Accountant. She has requested you to explain to her matters regarding cost accounting as a preparation for her to attend the interview. As a graduate from Polytechnic who has learnt about cost accounting, explain to her regarding the matters stated below: (a) Define cost accounting. (3 marks) (b) State FIVE (5) differences between cost accounting and financial accounting. (10 marks) (c) State FOUR (4) disadvantages for a company which does not use cost accounting. (8 marks) (d) Define direct cost and indirect cost giving examples . (4 marks)

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CONFIDENTIAL

P3116 : Basic Cost Accounting

QUESTION 2 Below are information obtained from Melur Ltd., a company that produces ecofriendly products as at 30 June 2010. RM Plant and machinery Purchases of raw materials Return of purchases of raw materials Carriage inwards Manager salary Rent Factory insurance Depreciation of plant and machinery General office expenses Direct wages Royalty Salesmans allowances Advertising & promotional expenses Stock of raw materials as at 1 July 2009 Stock of raw materials as at 30 June 2010 65 000 45 000 2 550 1 880 5 000 9 500 1 500 6 500 4 300 18 200 800 2 000 3 500 15 900 19 900

Additional information: i. Work in process : 1 July 2009 RM 7 500 30 Jun 2010 RM 6 500 ii. iii. The manager spends 55% of his time at factory and 45% in the office. Rent is allocated using a 3:2 ratio for factory and office.

You are required to prepare a cost statement for Melur Ltd as at 30 June 2010. (25 marks)

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CONFIDENTIAL

P3116 : Basic Cost Accounting

QUESTION 3

Emil Emilda Manufacturing Company uses the basis below to absorb its overhead costs for each job: Department A Department B Department C Machine Hours Direct Labour Hours Direct Material Costs

The company estimates the costs below for the year ended December 2009: Department A Production overhead (RM) Direct labour (RM) Direct material (RM) Direct labour hours Machine hours 16,000 7,250 6,000 8,500 4,000 Department B 22,000 9,200 9,500 10,500 6,295 Department C 10,000 4,500 3,250 5,000 900

Information for Job No: 911 is as follows: Department A Direct material (RM) Direct labour (RM) Direct labour hours Machine hours 4.75 7.50 5 3 Department B 6.25 11.00 7 2 Department C 2.00 4.50 3 0.5

You are required to:

(a)

Calculate overhead absorption rate for each department. (6marks)

(b)

Calculate total overhead absorbed from each department. (6 marks)

(c)

Calculate total costs of 50 units produced. (12marks)

(d)

Determine the selling price if profit is 15% on total costs. (1marks) Page 4 of 5

CONFIDENTIAL

P3116 : Basic Cost Accounting

QUESTION 4

The following information is related to EXEN Berhad: Production Direct materials Direct labour Variable overhead Selling price per unit 45,000 unit 25,000 kg purchase and use, cost RM 51,500 10,000 hours, cost RM 40,500 RM 91,000 RM 5.00

Direct materials price variance Direct materials quantity variance Labour efficiency variance Labour rate variance Variable overhead variance

RM 1,500 5,000 RM 400 RM 500 RM 1,000

Unfavorable Unfavorable Unfavorable Unfavorable Unfavorable

(a) Calculate standard cost per unit of production. (20 marks) (b) Prepare a numerical reconciliation of the difference in profit between actual and standard cost. (5 marks)

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