CONFIDENTIAL AC/JAN 2017/MAF201

UNIVERSITI TEKNOLOGI MARA

COMMON TEST 1

COURSE : COST AND MANAGEMENT ACCOUNTING 1

COURSE CODE : MAF201
EXAMINATION : JANUARY 2017
TIME : 1 HOUR 30 MINUTES

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of three (3) questions.

2. Answer ALL questions in the Answer Booklet. 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) the Question Paper

ii) an Answer Booklet – provided by the Faculty

5. Answer ALL questions in English.

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

This examination paper consists of 3 printed pages

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CONFIDENTIAL 2 AC/FEB 2017/MAF201

QUESTION 1

a) List TWO parties involved in contract costing.

(2 marks)
b) Differentiate between joint products and by products.
(4 marks)
c) Explain the accounting treatment of normal loss and abnormal losses.
(4 marks)

(Total:10 marks)

QUESTION 2

Berkat Bhd signed a contract to construct a water theme park located in Pontian, Johor. The
construction work commenced on 1 January 2016 and is estimated to complete on 30 June
2017. The agreed contract price is RM3 million.

The following information relates to the contract transactions as at 31 December 2016.

RM
Plant and Machinery (Cost) 437,500
Prepaid subcontractor’s fees 60,000
Accrued site wages 13,000

Additional Information:

1. The data of the materials are as follow: RM

Material unused at site 71,000
Materials purchased 405,000
Materials transferred from other site 285,000
Materials returned to supplier 35,000

2. The depreciation for the plant and machinery is amounted to RM87,500.

3. Additional site wages incurred for the period is RM100,800.

4. The company has paid the wiring costs amounted to RM95,500.

5. The overhead absorbed is at 15% of the total materials used during the period.

6. The value of work certified is RM1.5 million and is subject to 10% retention money.

7. The provision for future rectification and defective costs for the contract is RM39,000
and the additional cost to complete the contract is estimated at RM1,200,000.

8. It is the company’s policy to determine the profit based on the value of work certified.

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CONFIDENTIAL 3 AC/FEB 2017/MAF201

Required:

a. Prepare the following for the year ended 31 December 2016:

i. Construction in Process Account;

ii. Contractee Account;
iii. An extract of Statement of Financial Position as at 31 December 2016.

(Total: 15 marks)

QUESTION 3

Murnee Enterprise manufactures organic non-fat yogurt. All of the ingredients are added in
the Mixing Process and then will be transferred to the Flavouring Process.

The business expects 5% normal loss of the materials input in the Mixing Process and 7%
normal loss of total production in the Flavouring Process. The normal loss can be sold for
RM0.50 per kg. It is the company policy to value the work in progress using First in First out
(FIFO) method. The details of the processes are as follow:

Mixing Process

Materials input (2,200 kg) RM3,470

Conversion costs RM556
Actual loss 50 kg

Flavouring Process

WIP as at 1 December 2016 (1,400 kg): Degree of Completion

- From Mixing Process 100% RM1,216
- Materials added 100% RM 984
- Conversion cost 70% RM 276
Cost incurred during the period:
- Materials added (500 kg) RM1,320
- Conversion costs RM 300
WIP as at 31 December 2016 (560 kg):
- From Mixing Process 100%
- Material added 80%
- Conversion costs 60%
Actual loss (500kg)

Required:

a. Prepare the Mixing Process Account.

b. Prepare the Flavouring Process Account. Show all the relevant statements.
(Note: All calculations are to be made to the nearest two decimal places)

(Total: 25 marks)
END OF QUESTION PAPER

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