AC/SEP 20141ACC11611651211

CONF1DENTIAL

UNIVERSITI TEKNOLOGI MARA

FINAL EXAMINATION

COURSE
COURSE CODE
EXAMINATION
TIME

: INTRODUCTION TO COST ACCOUNTING l COST

ACCOUNTING
: ACCII61165/211
: SEPTEMBER 2014
: 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)
ii)

the Question Paper

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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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.
ii.
iii.
iv.
V.

Advertising costs to promote a new product

Depreciation of machines in Assembly Centre
Consultancy costs paid to a company conducting a survey on a new product
Muna Boutique purchased 3,000 meters of fabric for new clothing line
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.
2.

Store requisition notes

Goods received notes
(4 marks)

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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:

Date
3January
6 January
9 January
12January
15 January*
20 January
28January

Purchases
Units
Total Value
(RM)
11500
47500
27000
67400
-
-
3,000
107500
-
-

-
-

lssues
Units
27800
27500
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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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.

Amin
Hana
Ashikin
Shatirah

Unit
Hours
produced Worked
-
50
-
40
50
44
60
45

Rate per
Hour(RM)
20
30
20
30

Rate per
Unit(RM)
-
-
30
20

Defected
units
2
O

The differential piecework wages will be as follows:

Up to 20 units
21 - 40 units
41 - 50 units
51 units and above

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RM1O per unit

RMI2 per unit
RM15 per unit
RM20 per unit

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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
Canteen
Maintenance

Basis of Apportionment
Number of empioyees
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
167300
81480
?
lndirect
21300
0
0
materials
121600
lndirect
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
100
40
30
20
10
0

Maintenance
hours
Direct labour 35 7 000
hours
25,700
Machine
usage hours
17630
Numberof
employees

8 7 000

67200

207800

7 7 200

18,000

21400

500

450

400

380

400

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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.
ii.
iii.
iv.
V.

vi.

lnsurance on building
Depreciation on machinery
Electricity expenses
lnspection expenses
Rent and rates of building
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.
ii.
iii.

Machine Centre 1 - Machine Usage Hours

Machine Centre 2 - Machine Usage Hours
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:

Actual overhead
Direct labour hours
Machine usage hour

Machine Centre
1
RM607304
77400
57400

Machine Centre Assembly Centre

2
RM467983
RM671608
77210
267340
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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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:

Woods
Nails
Wages/Salaries:
Chair maker (Completed job within 10 days)
Supervisor
Designer fees
Salesman commission
Driver for delivery
Varnish

RM
RM11500
RM300
RM50 per day
RM800
RM1 ,000
RM200
RM50
RM250

Required:
i.

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

prime cost

b.

total production cost

C.

total cost and

d.

selling price

(4 marks)
(3 marks)
(2 marks)
(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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