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Year 2018
Subject COST ACCOUNTING
Weightage 30%

COURSEWORK 1 – INDIVIDUAL ASSIGNMENT

“Flexibility is said to be the hallmark of modern management accounting, whereas

standardization and consistency describe financial accounting” (Raiborn and Kinney,
2011).
1. Explain why the focus of these two accounting system differs.
2. Giant Ltd specializes in manufacturing different models of mountain bikes. Assume
that a new model, the Jaguar, has been well accepted. As a result, the entity has
established a separate manufacturing facility to produce these bicycles. Giant Ltd
produces 1,000 bicycles per month. Monthly manufacturing C and other expenses related
to these bicycles are as follows:

1. Rent on manufacturing equipment (lease cost) – RM2,000/month;

2. Insurance on manufacturing building – RM750/month;
3. Raw materials (frames, tyres and others) – RM80/bicycle;
4. Power costs for manufacturing facility – RM1,000/month;
5. Supplies for general office – RM8,000/month;
6. Wages for assembly line workers in manufacturing facility – RM30/bicycle;
7. Depreciation on office equipment – RM650/month;
8. Miscellaneous materials (lubricants, solders and others) – RM1.20/bicycle;
9. Rates and taxes on manufacturing building – RM2,400/year;
10. Manufacturing supervisor’s salary – RM3,000/month;
11. Advertising for bicycles – RM10/bicycle;
12. Sales commissions – RM10/bicycle; and
13. Depreciation on manufacturing building – RM1,500/month.

Required:
(a) Assign these manufacturing and selling costs to the various categories.
Product Costs
Direct Manufacturing Period Conversion
Materials Direct Labour Overhead Costs Prime Costs Costs
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Rent on equipment RM2,000 RM2,000
Insurance on
manufacturing building RM750 RM750
Raw materials RM80,000 RM80,000
Power cost RM1,000 RM1,000
Supplies for general
office RM8,000
Wages for assembly
line RM30,000 RM30,000 RM30,000
Depreciation on office
equipment RM650
Miscellaneous
materials RM1,200
Rates and taxes on
manufacturing building RM200 RM200
Supervisor’s salary RM3,000 RM3,000
Advertising RM10,000
Sales commissions RM10,000
Depreciation on factory
building RM1,500 RM1,500

b) Calculate the total manufacturing costs, stating total prime costs and conversion costs
for the month.

Appendix B - Coursework Assessment Criteria and Marks Allotment Sheet

Faculty of Business, Accountancy & Management (FOBAM)

COURSEWORK ASSESSMENT CRITERIA AND MARKS ALLOTMENT

Subject: 1ACC0807 COST ACCOUNTING COURSE: EDIBA

Name : ______________________________ Student ID: ________________________

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No. Assessment Criteria Weightings Marks

Allotted by
Lecturer
Report Breakdown

1 Explain why the focus of these 2 accounting

system differs. 20%

(10 points x 2 marks each with proper usage of

relevant journals and books and proper
citations)

2.a Assign these manufacturing and selling costs to the 12.5%

various categories.
2.b Calculation:
-total manufacturing costs 5.5%
-total prime costs 6%
-total conversion costs 6%
This coursework must have a Cover Sheet, Table
of Content and Page Number and Proper 5%
Heading/Title for each part answered, list of
references (Use of APA Referencing System)
Total 55%
Conversion 30%

Comments:
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Lecturer Signature
Date