F2-FMA Interim Assessment Answers - Feb14-Dec14 PDF

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ACCA Paper F2 and FMA Management Accounting 2014

Interim Assessment – Answers

To gain maximum benefit, do not refer to these answers until you have completed the interim assessment questions and submitted them for marking.

ACCA F2 AND FMA MANAGE ME NT AC COU NTING

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2

K AP L AN P U B L ISHIN G

IN TE R IM ASSE SSME N T AN SW E R S

SECTION A 1

A

2

B

3

B

4

D

5

A Materials inventory account Opening inventory (balancing 9 Issued to production item) Payables for purchases 150 Returned to suppliers Returned to stores 4 Written off Closing inventory ––––

163

3 8 26

––––

163

––––

6

126

––––

C OAR = $176,400/3,600 = $49 Amount absorbed = $49 × 5,400 = Actual overhead Over absorbed

7

A

8

$160,000

$ 264,600 (250,400)

–––––––––

14,200

–––––––––

Total cost per unit − Fixed cost per unit = Variable cost per unit = $43 − (60% of $15) = $34 Revenue − Variable costs

9

10

= ($50 × 10,000) − ($34 × 10,000) = $160,000

A Overhead absorption rate

= $15,000/10,000 = $1.50 per unit

Overhead over-absorbed

= $12,470 – (9,400 × 1.50) = $1,630

B

K AP L AN P U B L ISH IN G

3

ACCA F2 AND FMA MANAGE ME NT AC COU NTING

11

12

$1 PER UNIT OAR

= $60,000/((1 hr × 10,000) + (0.25 hrs × 20,000)) = $4 per hr

Blue

= $4 × 0.25 hrs = $1 per unit

A Variable cost per unit = $(189,125 – 169,750)/ (11,500 – 9,000) = $7.75

13

$105,000 Input = Output + CWIP 10,000 = 7,000 + 3,000 EU Output CWIP Total EU

Material 7,000 3,000 10,000

Conversion 7,000 1,800 8,800

Cost per EU Material = 90,000/10,000 = $9 Conversion = 52,800/8,800 = $6 Value of output = (9+6) ×7,000 = $105,000

14

A Marginal costing profit 2,000 × $0.5 = Absorption costing profit

15

$ 25,000 1,000

––––––––

26,000

––––––––

A Idle time + General overtime = (15 hrs × $12) + ((10 hrs – 4 hrs) × $6) = $216

16

C Re-order level to ensure that stockouts are avoided = 500 units × 2 weeks = 1,000 units

17

A Average inventory = (2,000 units/2) + ((1,000 units – (300 units × 2 weeks)) = 1,400 units

18

$292 Cost per unit = (8,230 – 17) / (1,700 – 34) = $4.93

4

K AP L AN P U B L ISHIN G

IN TE R IM ASSE SSME N T AN SW E R S

Description

Kg’s

Material Labour Overheads

1,700

Description Abnormal loss

19

Process account Total cost Description $ 1,830 Normal loss 2,560 Output 3,840 Abnormal loss

Kg’s 34 1,600 66

Total cost $ 17 7,888 325

–––––––

–––––––

–––––––

–––––––

1,700

8,230

1,700

8,230

–––––––

–––––––

–––––––

–––––––

Kg’s

Total cost $

Kg’s 66

Abnormal loss account Total cost Description $ 325 Scrap Income statement

––––––

–––––––

66

325

66 ––––––

66

33 292 ––––––

325

A Re-distribute maintenance: 60% to Assembly. (Ignore Admin as this is not a production cost.) OAR = ($90,000 + $6,000)/10,000 machine hours = $9.60

20

C Working hours Idle time Total hours

21

A

22

B

23

80% 20%

210.0 hours 52.5 hours

100%

262.5 hours

–––––––

–––––––––––––

Fixed cost

= $7,250

Variable cost

= 37 × 250 = $9,250

Total cost

= $16,500

× $7.50 = $1,968.75

D Total joint costs = 12,000 + 7,000 + 5,000 = $24,000 Total sales value Product X = 3,000 × $7 = $21,000 Product Y = 9,000 × $5 = $45,000 Joint cost apportioned to Y = $24,000/(21,000 + 45,000) × 45,000 = $16,364

K AP L AN P U B L ISH IN G

5

ACCA F2 AND FMA MANAGE ME NT AC COU NTING

24

D

25

B

26

B

27

D Order quantity = 750

Order quantity = 1,000

Order cost

300×12/750×17.5

84

Order cost

300×12/1,000×17.5

Holding cost

0.2×1.12×750/2

84

Holding cost

0.2×1.12×0.96×1,000/2

Purchase cost

300×12×1.12

Purchase cost

300×12×1.12×0.96

4,032

––––––

4,200

Total cost

63 108 3,871

––––––

4,042

––––––

––––––

Change in cost = $4,200 - $4,042 = saving of $158.

28

C OAR = $375,000/15,000 = $25.00 per unit Amount absorbed = $25.00 × 17,000 Actual overhead Over-absorbed

29

$425,000 ($418,000)

–––––––––––

$7,000

–––––––––––

D Normal loss = 10% × 400 = 40 litres Actual loss = 400 – 330 = 70 litres Abnormal loss = 70 – 40 = 30 litres EUs Output Normal loss Abnormal loss

Material 330 0 30 ––––– 360

Conversion 330 0 18 ––––– 348

Cost per EU Material = (400 × 8)/360 = $8.89 Conversion = 4,800/348 = $13.79 Valuation of output 330 × ($8.89 + $13.79) = $7,484 6

K AP L AN P U B L ISHIN G

IN TE R IM ASSE SSME N T AN SW E R S

30

B

31

C

32

B 360/505 × 90 = 64°

33

C

34

C OWIP + Input β = Output + CWIP 2,000 + 11,000 = 9,000 + 4,000 EU OWIP to be finished Start to Finish CWIP Total EU

35

Material 0 7,000 4,000 11,000

Conversion 1,000 7,000 2,000 10,000

D Cost per EU Material = $10,461/11,000 = $0.951 Conversion = $24,700/10,000 = $2.47 Completed output Completing OWIP = 1,000 x 2.47 = Completed in period = 7,000 x (0.951 + 2.47) = OWIP b/f costs = Valuation =

K AP L AN P U B L ISH IN G

$2,470 $23,947 $3,583 $30,000

7

ACCA F2 AND FMA MANAGE ME NT AC COU NTING

SECTION B 1

ARMADILLO LTD (a)

$7,000 × 50% + $8,000 × 20% + $7,000 × 30% = $7,200

(b)

$8,000 × 1.02 × 0.985 × 0.985 = $7,917

(c)

$2,000 + ($6,000 ÷ 12) = $2,500

(d)

($50,000 ÷ 20) + ($50,000 × 0.084 ÷ 12) = $3,850 ACCA Marking scheme (a)

(b) (c)

(d)

October receipt November receipt December receipt Identification of November as amount to be paid Correct application of inflation Inclusion of wages Calculation of monthly rent Non-inclusion of depreciation Calculation of monthly lump sum repayments Calculation of interest Total:

2

Marks 1 1 1 0.5 1.5 1 1 1 0.5 1.5 –––– 10 ––––

WELLYBOOT MANUFACTURING (a)

Production budget Blue boot Red boot Sales volume Less:

Opening inventory

Add:

Closing inventory

Production volume (units)

8

850 165

1,250 365

92 _____

270 _____

942 _____

1,520 _____

777 _____

1,155 _____

K AP L AN P U B L ISHIN G

IN TE R IM ASSE SSME N T AN SW E R S

(b)

Raw material purchases budget (litres) Red boot

Blue boot

Total (litres)

Production (units) Material unit

volume content

per

777

1,155

7 litres ______

8 litres ______

5,439

9,240

Usage Less:

Opening inventory Closing inventory

Add:

(2,400) 3,162 _______

Purchases – litres of material (c)

14,679

15,441 _______

Raw material purchases budget (cost) Purchases 15,441 litres × £12 per litre = $185,292

(d)

Direct labour budget (standard hours) Blue boot Red boot

Production volume (units) Standard hours per unit Standard hours produced

777

1,155

10

6

7,770

6,930

Total (hours)

______

(e)

Total hours employed

14,700

Normal hours (30 × 37 hrs × 13)

14,430 ______

Overtime hours

270 ______

Direct labour budget (cost) $ Normal hours Overtime Total direct labour cost

K AP L AN P U B L ISH IN G

14,430 hours × $8/hr 115,440 2,700 270 hrs × $10/hr _______ 118,140 _______

9

ACCA F2 AND FMA MANAGE ME NT AC COU NTING

ACCA Marking scheme (a) (b)

(c) (d) (e)

Marks 2 1 0.5 1.5 1 1 1 1 1 -----10 -----

Calculation of closing finished goods Calculation of production requirement Calculation of usage Calculation of closing raw materials Calculation of purchases in litres Correct answer Calculation of total hours Calculation of overtime hours Correct answer

Note: allow follow through marks

3

BAY CLEANING LTD

Production and sales volume (drums)

Actual

Flexed budget

120,000

120,000

$ Sales

Variance F/A

$

$

630,000

600,000

30,000 F

264,000

252,000

12,000 A

94,000

90,000

4,000 A

Power

83,500

82,000

1,500 A

Water

17,500

17,000

500 A

Other overheads

12,500

12,400

100 A

Production

40,000

35,000

5,000 A

Administration

30,000

27,500

2,500 A

31,000 _______

30,000 _______

1,000 A ______

57,500

54,100

3,400 F

Variable costs Materials Labour Semi-variable costs

Fixed costs

Selling and distribution Operating profit

ACCA Marking scheme 0.5 marks for each correctly entry

10

Marks -----10 -----

K AP L AN P U B L ISHIN G...