AC/SEP 2014/MAF280

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UNIVERSITI TEKNOLOGI MARA

FINAL EXAMINATION

COURSE

COSTING SYSTEM AND PLANNING

COURSE CODE

EXAMINATION

TIME

MAF28O
SEPTEMBER 2014
3 HOURS

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
invigilator.

4.

Please check to make sure that this examination pack consists of:
i)
ii)

the Question Paper

an Answer Booklet - provided by the Faculty

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

This examination paper consists of 7 printed pages
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AC/SEP 2014/MAF280

QUESTION 1
SediaBuild Constructions engaged in a project to build roads and rail networks leading to the
keyports at Putatan worth RM7,300,000 in August 2013. The company commenced the
project on 1 October 2013. They close their books of account on 30 June each year. The
following information is available from their costing record on 30 June 2014.

Materials purchased
Materials issued from site store
Materials returned to supplier
SiteWages
Subcontractor charges
Plant purchased specially for contract
Direct expenses incurred
General overhead allocated to overhead
Cash received from client (90% of value of work certified)

RM
119001000
4507000
550,000
9471500
3601000
8501000
340,000
8701000
515807000

Additional information:

vi.
vii.
viii.

Materials on hand at 30 June 2014 valued at RM307,000.

Site wages still outstanding at RM1 32,500.
Subcontractor charges are paid for 15 months work.
Plant to be depreciated at 1 O% per annum on a monthly basis.
The company paid a supervisor at a rate of RM2,000 per month. Two supervisors
were employed to monitor the roads and rail networks project.
Head office charged based on 10% of material used.
Estimated future cost to contract is RM776,450.
The companys policy to recognise profit at value of work certified.

Required:
a.

Prepare the following accounts and statement for the year ended 30 June 2014.
i.
ii.
iii.

Construction in process Account

Contractee Account
Statement of Financial Position (extract)
(12 marks)

b.

Define briefly the following terms:

i.
ii.

Retention money
Progress billing
(2 marks)
(Total: 14 marks)

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AC/SEP 20141MAF280

QUESTION 2
Handle WeCare Sdn Bhd manufactures a variety of glass windows in its Telipok plant. The
products will go through two processes. Clear glass sheets are produced in Process 1 then
added with metallic oxides in Process 2 for colouring process to form coloured glass sheets.
The following data relates to the processes for July 2014.
Process 1
lnput Process 1:
lnput Material
Conversion cost
Output transfer to Process 2

3600 units

Cost (RM)
360,000
242,100

3,000 units

Process 2
Opening work in process:

5000 units
Qqree of completion
1 00%
1 00%
40%

Transfer from Process 1

Added Material
Conversion

Added Material

Conversion cost

Finished goods:

7,500 units

979,500
484,000

12,000 units

Closing work in process :

Transfer from Process

1

Added material

Conversion

Cost (RM)
380,000
584,000
1057500

3,000 units
Degree of completion
1 00%
70%
50%

Expected loss is 12.5% of the physical input material for process 1 and 4% of the production
for Process 2. The scrapped units were detected at the end of Process 1 and Process 2 and
were sold immediately at RM15 per unit and RM25 per unit respectively. Handle WeCare
use First ln First Out Method (FIFO) for the valuation of their product.
ln Process 2, the finished goods are split-off for etching process. The joint production costs
are then apportioned using the net realizable value method. The following data relates to
finished goods:
Products

Units

Etched coloured glass

97000
Unetched coloured glass 3 1 000

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Selling price
perunit
RM750
RM450

Further processing cost

perunit
RMI50
RMO

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AC/SEP 20141MAF280

Required:
a.

Prepare Process 1 and Process 2 Accounts.

(Show all workings. Round up the cost per unit to four decimal places and total to the
nearest ringgit)
(20 marks)

b.

Prepare the Normal Loss and Abnormal Loss/Abnormal Gain Account.

(2 marks)

C.

Define the following terms with an example

i.
ii.

Joint product
By-product
(3 marks)

d.

Distinguish any TWO (2) types of losses occurred in process costing.

(4 marks)
(Total : 29 marks)
QUESTION 3
Puncak Bhd produces Topaz, a single model of exclusive wall decoration glass. The
following information relates to the cost per unit of the production based on an annual
production and turnover of 5,000 units:

Direct material
Direct labour
Variable overhead
Fixed overhead

RM
40.00
10.00
10.00
10.00

The budgeted sales for the year is RM500,000.

Required:
Each question is to be treated independently.
a.

Calculate the break-even point in units and value.

b.

Calculate the margin of safety in units.

(4 marks)
(1 mark)

c.

lf the direct material cost increase by 10% and Puncak Bhd would Iike to maintain its
annual profit, calculate:
i.

the additional output required assuming other information remains unchanged.

(Calculate to the nearest unit).
(8 marks)

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11.

d.

AC/SEP 2014/MAF280

New selling price per unit for Puncak Bhd assuming the company is unable to
increase the output.
(3 marks)

Determine the effect on the current break-even point (in units) if Puncak Bhd increases
the selling price by 20% and total fixed overhead by RMI0,000.
(3 marks)

e. Puncak Berhad would like to introduce two other models of wall glasses decoration
known as Ruby and Jade. The contribution per unit and sales mix of Topaz, Ruby and
Jade are expected to be as follows:
r
Lcontribution per unit (RM)
Sales mix (%)

Topaz
40
40

Ruby
57
30

Jade
58
30

The total fixed overhead costs is expected to increase to RM75,750 annually.

Calculate the break-even point in units for each product.
(4 marks)
f.

State THREE (3) limitations and THREE (3) assumptions of cost volume profit
analysis
(6 marks)
(Total: 29 marks)

QUESTION 4
Plant Garden Bhd is estimating its need for funds for the fourth quarter of the year 2014. The
following table presents the forecasted monthly sales from July 2014 to January 2015:
Jul
2014

Aug
2014

Sept
2014

Oct
2014

Nov
2014

Dec
2014

Jan
2015

Sales
revenues 120 1 000 100 7 000 110 1 000 120 7 000 130 1 000 140,000 1507000
(RM)
Additional information:
i.

20% of sales are collected in the month of sales, 50% one month after the month of
sales and 30% two months following the month of sales.

ii.

Purchases amounted to 60% of sales revenues and are made one month prior to
anticipated sales.

iii.

Payment for the purchases are as follows: 50% in the month of purchases, 35% one
month after purchases and 1 5% two months after purchases.

iv.

Wages are 20% of the months sales and the payment are made in the month in which
they are incurred.

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V.

AC/SEP 20141MAF280

ln November 2014, the company will sell an old motor vehicle having a book value of
RM10,000. There will be a loss on disposal of RM4,000.

vi Monthly fixed overheads are RMI9,000 and this amount includes monthly depreciation
of RM2,000. The payment for fixed overheads is to be settled in the month they are
incurred.
vii.

A new machine with a cost of RM5,000 will be installed in September 2014 but the
payment will be made in December 2014.

viii.

The company will receive dividend from its investment in Bursa Malaysia amounting to
RM50,000 in December 2014.

ix.

Opening cash balance on 1 October 2014 is expected to be RM20,000.

Required:
Prepare a cash budget for Plant Garden Bhd for the month of October, November and
December 2014.
(Total: 14 marks)
QUESTION 5
Ranisha Electronics Bhd is a producer of electronic device and had drawn up a budget for
the second quarter of 2014. The sales and cost of making the electronic device at various
levels of activity are shown as below:
Sales volume in units
Direct materials
Direct wages
Manufacturing overheads
Administrative costs
Operating costs

5,000
RM
16,500
22,500
41,800
6,000
19,000

6,000
RM
19,800
27,000
49,200
6,000
22,000

7,000
RM
23,100
31,500
56,600
6,000
25,000

During the second quarter of 2014, the actual production was 5,800 units.
Costs incurred were as follows:
Direct materials
Direct wages
Manufacturing overheads
Administrative costs
Operating costs

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RM
19,950
25,800
47,620
6,500
21,700

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AC/SEP 2014/MAF280

Required:
a.

Using high-low method, compute the variable cost per unit and the total fixed cost for
each cost item.
(5 marks)

b.

Prepare a flexible budget performance report for Ranisha Electronics Bhd for the
second quarter of 2014 and indicate the variances that arise.
(5 marks)

C.

List FOUR (4) advantages offlexible budget.

(4 marks)
(Total : 14 marks)

END OF QUESTION PAPER

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