DEC2019 Solution-student PDF

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UNIVERSITI TEKNOLOGI MARA FINAL EXAMINATION ANSWER SCHEMECOURSE : FUNDAMENTALS OF COST ACCOUNTINGCOURSE CODE : MAFEXAMINATION : DECEMBER 2019SUGGESTED SOLUTIONQUESTION 1a. Administrative b. Distribution c. Distribution d. Administrative e. Administrative f. Distribution g. Selling h. AdministrativeB...

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AC/DEC 2019/MAF151

UNIVERSITI TEKNOLOGI MARA FINAL EXAMINATION ANSWER SCHEME

COURSE

:

FUNDAMENTALS OF COST ACCOUNTING

COURSE CODE

:

MAF151

EXAMINATION

:

DECEMBER 2019

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AC/DEC 2019/MAF151

SUGGESTED SOLUTION QUESTION 1 a. b. c. d. e. f. g. h.

Administrative Distribution Distribution Administrative Administrative Distribution Selling Administrative

B. RM Direct material: Raw material costs Direct labour: Salary for production workers Direct expense: Designer’s fee PRIME COST Production Overhead: Salary of supervisors Depreciation of sewing machines & equipment Insurance expenses (70% x 1,500) PRODUCTION OVERHEAD COST

5,500 7,500 800 13,800 7,200 500 1,050 8,750

QUESTION 2 A. a. 2 elements of efficient materials control system: i. Materials should be purchased only when required and must be appropriately authorized. ii. Supplier chosen should be balanced between quality, price and delivery. iii. Materials should be properly received and inspected. iv. Appropriate storage facilities should be provided. (or any other acceptable points)

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AC/DEC 2019/MAF151

b. Identify the correct documents involved in material purchasing procedure: i. ii. iii. iv.

Purchase Invoice or delivery order Materials requisition form Goods received note Purchase order

B. Super Cakes Sdn Bhd a. EOQ

= = =

D

√ 2DO C √2 x 24,000 x 5 1.5 400 kg

= 480,000 cupcakes x 0.05 kg flour = 24,000 kg

b. Re Order Level

= = =

Max Usage x Max Lead Time 100 kg x 6 days 600 kg

c. Max Stock Level

= = =

ROL + EOQ – (Min Usage x Min LT) 600 + 400 – (50 x 2) 900 kg

d. Min Stock Level

= =

ROL – (Average Usage x Average LT) 600 – (50+100 x 2+6 ) 2 2 300 kg

=

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AC/DEC 2019/MAF151

C. Store Ledger Card: FIFO Date Nov 1 3

Receipt Balance b/d 300

15.5

Issue

4,650

6

700

15

10,500

9

600

16

9,600

12

900

16.5

14,850

15

Returned to supplier

150

16

2,400

Store lost

300 300 400 50 550 50

15 15.5 16 16 16.5 16.5

4,500 4,650 6,400 800 9,075 825

18

27 30

1,000

Balance 15 15,000

1,000 300 300 300 300 300 600 300 300 600 900 300 300 450 900 50 900

15 15.5 15 15.5 15 15.5 16 15 15.5 16 16.5 15 15.5 16 16.5 16 16.5

15,000 4,650 4,500 4,650 4,500 4,650 9,600 4,500 4,650 9,600 14,850 4,500 4,650 7,200 14,850 800 14,850

350

16.5

5,775

300

16.5

4,950

QUESTION 3 a. Skilled workers

Semi-skilled worker

Sufian

Hafiz

Basic wages = 40 hoursx RM8.50 = RM340

Basic wages = 40 hrs x RM7 = RM280

OT hours

= 45 – 40 = 5 hours

OT Basic

= 5 hrs x 100% x RM8.50 = 42.50 OT Premium = 5 hrs x 50% x RM8.50 = 21.25

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OT hours

= 50 – 40 = 10 hours

OT Basic

= 10 hrs x 100% x RM7 = 70 OT Premium = 10 hrs x 50% x RM7 = 35

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Bonus: TA = (30/60 x 58 units) + (24/60 x 80 units) = 29 + 32 = 61 hours TT = 45 hours TS = 61 – 45 = 16 hours

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AC/DEC 2019/MAF151

Bonus: TA = (40/60 x 45 u) + (30/60 x 26 u) = 30 hrs + 13 hrs = 43 hours TT = 50 hours TS = nil No bonus

Bonus pay = 16 hrs x 40% x RM8.50 = 54.40 Gross wages = 340 + 42.50 + 21.25 + 54.40 = RM458.15

b. Group bonus scheme Sufian : TS=16 Arul TA = (30/60 x 55 units) + (24/60 x 58 units) = 27.5 + 23.2 = 50.7 hours TT = 43 hours TS = 50.7 – 43 = 7.7 hours

Gross wages = 280 + 70 + 35 = RM385

Bonus pay: Sufian = (23.7 hrs x 45/88) x (40% x RM8.5) = RM41.20 Arul = (23.7 hrs x 43/88) x (40% x RM8.5) = RM39.37

Total TS = 16 + 7.7 = 23.7 hours

c. Advantages of group bonus scheme i. It is easier to administer as the bonus is not calculated individually ii. Encourages teamwork iii. Increase productivity iv. Better quality of output as members learn from each other (or other acceptable reasons)

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AC/DEC 2019/MAF151

QUESTION 4 A. Overhead analysis sheet a. Overhead item Basis Ind materials Ind wages Other alloc cost Electricity Dep of machine Supervision Fire insurance Machine insurance Primary Appt Reapportionment Store Maintenance Store Maintenance Store Maintenance

Allocation Allocation Allocation Area Machine value No of employee Building value Machine value

Total (RM) 259,200 156,000 96,000 96,000 80,000

Cooking (RM) 127,200 39,600 45,600 51,840 20,000

Packaging (RM) 108,000 67,200 28,800 28,800 60,000

Store (RM) 6,000 25,200 8,400 9,600 -

40,000

24,000

8,800

3,200

4,000

45,600

31,269

13,029

651

651

126,000

31,500

94,500

898,800

371,009

No of Mat Requisition Maintenance hours No of Mat Requisition Maintenance hours No of Mat Requisition Maintenance hours

TOTAL OVERHEAD

898,800

-

409,129

53,051

26,526

21,220

(53,051)

42,550

21,275

7,091

3,546

2,836

(7,091)

425

213

71

36

28

(71)

4

3

444,096

454,704

Maintenance (RM) 18,000 24,000 13,200 5,760 -

65,611 5,305 (70,916) 709 (709) 7

-

(7) -

b. Overhead Absorption Rate (OAR) Cooking Dept

= 444,096 220,800

= RM2.01 per DLH

Packaging Dept

= 454,704 250,900

= RM1.81 per MH

c. Identify the two conditions: i. The cost center must have caused the overheads to incur ii. The exact amount of overhead must be known Other relevant answers

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B. a.

The cost driver rate for each activity using Activity-based costing (ABC) system.

Machine set-up Machining Packaging Quality Control

Amount of overheads (RM) 84,000 1,400,000 120,000 35,000

Total Cost Driver 600 production runs 140,000 machine hours 400 deliveries 100 inspection

ABOR RM140 per production.run RM10 per MH RM300 per delivery RM350 per inspection

Activity-based costing method: the product cost per unit for Great Healthy Water (GHW). Activity Machine set-up Machining Packaging Quality Control

c.

AC/DEC 2019/MAF151

Great Beringin Sdn Bhd

Activity

b.

7

ABOR 140 10 300 350

Cost Driver 400 production.runs 120,000 MH 300 deliveries 60 inspections Total Overheads ÷ Unit produced OH per unit Direct material Direct labour Unit cost

Amount (RM) 56,000 1,200,000 90,000 21,000 1,367,000 ÷ 60000 units 22.78 250.00 60.00 332.78

Evaluate the product cost per unit of product Great Healthy Water (GHW) under the traditional costing system and ABC system.

Direct material Direct labour Overhead Unit Cost

Traditional (RM) 250.00 60.00 23.42 (11.71 x 2) 333.42

ABC (RM) 250.00 60.00 22.78 332.78

Working: OAR = Total OH/Total MH = RM1,639,000 / 120000+20000MH = RM11.71 per MH Overhead cost for the company is overstated by RM0.64 (RM333.42 – 332.78). d.

Two (2) limitations of ABC systems. 1. 2. 3. 4.

High implementation cost More time consuming to collect data and costly to maintain Familiarity to traditional costing system Other relevant answers

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AC/DEC 2019/MAF151

QUESTION 5 A. a. Four features of job order costing 1. job is taken based on customer’s own specifications 2. production is for customer order and not for maintaining stock 3. A separate job or production numbers are allotted to each job. 4. Products manufactured are distinguishable and hence are not uniform ..or other acceptable answer b. Job. 200 RM Direct materials: Wood Beam Direct Labour Machining Finishing Hire of special machine

1,600 2,300 500 450

RM 3,900

950 850

Prime cost

5,700

Production overhead Machining (5.38 x 80 hours) Finishing (6.19 x 45 hours)

430.40 278.55

Production cost

6,408.95

Administrative expenses (15% x 6,408.95)

961.34

Total cost Profit (25% x 7,370.29)

7,370.29 1,842.58

Selling price

9,212.87

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AC/DEC 2019/MAF151

B. Service costing a. Suitable cost unit: i. ii. iii. iv.

Public transportation services – per kilometer, per trip Canteen services – per meal Audit and tax services – per hour of services Hair salon – per hair-cut, per hair treatment Or any relevant cost unit

b. Muslimah Hair Salon Salaries – Hairstylist (1,500 x 3) Administration staff (800 x 2) Utilities Supplies – hair treatment (40 x 350) Others (20 x 350) Rental Depreciation Promotion Total cost per month ÷ No. of customer Cost per customer

RM 4,500 1,600 1,300 14,000 7,000 2,500 800 150 31,850 350 91.00

END OF SUGGESTED SOLUTION

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