MAF201 JUN 2018 SS - ANSWER SCHEME PDF

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UNIVERSITI TEKNOLOGI MARAFINAL EXAMINATIONANSWER SCHEMECOURSE : COST AND MANAGEMENT ACCOUNTING 1COURSE CODE : MAFEXAMINATION : JUNE 2018SUGGESTED SOLUTIONMAFQuestion 1 a. Expert Builders Sdn Bhd Construction in Process Account for the year ended 31 October 2017 RM RM Materials purchased 900,000 Mate...

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AC/JUN 2018/MAF201

UNIVERSITI TEKNOLOGI MARA FINAL EXAMINATION ANSWER SCHEME

COURSE

:

COST AND MANAGEMENT ACCOUNTING 1

COURSE CODE

:

MAF201

EXAMINATION

:

JUNE 2018

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AC/JUN 2018/MAF201

SUGGESTED SOLUTION MAF201 Question 1 a. Expert Builders Sdn Bhd Construction in Process Account for the year ended 31 October 2017 RM RM Materials purchased 40,000 900,000 Materials returned Materials from H.O. 35,000 Materials on site c/f 20,000 P&M, at cost 240,000 P&M, at NBV c/f (W1) 196,000 D. wages paid 120,000 Sub-contractor prepaid c/f 10,500 D. wages accrued c/f 16,500 COWDTD c/f 1,298,000 Sub-contractor 70,000 Other direct expenses 95,500 H.O. overheads (W2) 87,500 1,564,500 1,564,500 COWDTD b/f Attributable profit (W3)

Materials on site b/f P&M, at NBV b/f Sub-contractor prepaid b/f

1,298,000 1,216,421 2,514,421 20,000 196,000 10,500

Contract revenue

2,514,421 2,514,421

D. wages accrued b/f

16,500

Statement of Financial Position as at 31 October 2017EXTRACT RM Non-current asset Plant & machinery, NBV Current assets Materials Sub-contractor prepaid Acc. Rec. – contractee (10% x 1.4 m) WIP (W4) Current liabilities Wages accrued

196,000

20,000 10,500 140,000 1,114,421

16,500

Workings: W1: Depreciation = 240,000 x 20% x 11/12 = 44,000 W2: H.O. overheads = 10% x (900,000 + 35,000 – 40,000 – 20,000) = 87,500 © Hak Cipta Universiti Teknologi MARA

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W3: ETCC = 1,298,000 + 800,000 + (5% x 4,500,000) = 2,323,000 AP = (1,298,000 ÷ 2,323,000) x (4,500,000 – 2,323,000) = 1,216,421 W4: COWD AP (-) Progress Billings WIP

1,298,000 1,216,421 2,514,421 1,400,000 1,114,421

b. i. Retention money is defined as a sum of money representing and agreed proportion of a price for work completed being withheld by the contractee for an agreed period of time. ii. Progress billings is the amount charged to the contractee based on the value of work certified.

Question 2 a.

Material Direct labour Prodn Ohd

KG 8,000

8,000

CPU

PROCESS A ACCOUNT RM 30 240,000 To Process B 80,000 Normal loss 64,000 Abnormal loss 384,000

KG 7,000 400 600 8,000

50 10 50

RM 350,000 4,000 30,000 384,000

= RM384,000 - RM4,000 8,000 – 400 = RM50/kg

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AC/JUN 2018/MAF201

b.

OWIP Fr Process A Material Conversion cost Abnormal gain

Output OWIP CPDP Normal loss CWIP Abnormal gain

KG 1,000 7,000

200 8,200

PROCESS B ACCOUNT RM 54,740 Fin goods 350,000 Normal loss 69,600 CWIP 57,440

KG 7,000 400 800

13,600 545,380

10

8,200

RM 491,940 4,000 49,440

545,380

Statement of Equivalent Units, Costs and Evaluation Units TFPA Material Conversion Total 1,000 0 200 500 6,000 6,000 6,000 6,000 400 400 400 400 800 800 560 480 (200) (200) (200) (200) 8,000 7,000 6,960 7,180

Cost incurred during the period Cost/EU

350,000 350,000/ 7,000 50

69,600 69,600/ 6,960 10

-

2,000

4,000

40,000

5,600

3,840

Evaluation: OWIP CPDP Normal loss CWIP Abnormal gain

57,440 57,440/ 7,180 8 RM68 RM 6,000 408,000 27,200 49,440 13,600

Cost of finished goods = OWIP b/d + OWIP + CPDP + Net NL cost = 54,740 + 6,000 + 408,000 + (27,200of – 4,000) = 491,940 c. FOUR (4) characteristics of process costing:    

Produce similar or homogenous products Produce goods to meet sales demand and not for custom-made orders Used in mass production. Output from one process will be the input in the next process.

d. Normal losses are inherent in the production process and cannot be eliminated. These losses occur under efficient operating conditions and are unavoidable. Abnormal losses are not an inherent part of the production process and arise from inefficiencies. They are avoidable losses and treated as a period cost and written off to the profit and loss account at end of the accounting period. © Hak Cipta Universiti Teknologi MARA

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AC/JUN 2018/MAF201

Question 3 a. Enah Enterprise Absorption costing statement for February 2018 Sales Less COS: O. stock Production C. stock

RM 520,000

13,000 x 40 3,000 x 17 15,500 x 17 5,500 x 17

Gross profit Less: Variable selling expenses Fixed non-manufacturing costs Adjustment for (under)/over absorption of FMO: FMO incurred FMO absorbed 3 x 15,500 Over-absorption Net profit

51,000 263,500 (93,500) 221,000 299,000

5% x 520,000

(26,000) (25,500)

45,000 46,500 1,500 249,000

Marginal costing statement for February 2018 Sales Less COS: O. stock Production C. stock Gross margin Less: Variable selling expenses Contribution margin Less: Fixed non-manufacturing costs Fixed manufacturing costs Net profit

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520,000 3,000 x 14 15,500 x 14 5,500 x 14

42,000 217,000 (77,000) 182,000 338,000 26,000 312,000 25,500 45,000 241,500

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Workings: Cost of production per unit: DM DL VMO Variable cost per unit Fixed Mfg. oh 45,000 ÷ 15,0000 Total cost per unit

AC/JUN 2018/MAF201

7 5 2 14 3 17

b. ONE (1) advantage of marginal costing: i. Useful for management decision making ii. Profits are not distorted by methods of fixed overhead absorption iii. Highlights the effect of volume on sales and profits c. MC profit will be higher than AC profit when sales exceeds production (or when opening stock exceeds closing stocks).

Question 4 ai.

BEP(units)

= =

936,000 60 – 42 52,000 units

Working: Fixed costs Mfg overhead Selling & adm

RM 404,000 532,000

Total ii.

MOS (units)

936,000 = =

bi.

BEP

Variable cost Direct material Direct labour Mfg.overhead Selling expenses

=

RM 20 10 9 3 42

Actual sales – BEP 132,000– 52,000 80,000 units

=

936,000 + 16,000 18 52,889 units

ii.

Net Profit

= = =

(60 – 42)(132,000) – 952,000 2,376,000 – 952,000 RM1,424,000

iii.

MOS

= =

(132,000 – 52,889) x RM60 RM4,746,660

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c

DM (20 x .98) DL (10 x 1.05) Selling (3.00 x .96) MOHD Total variable cost/unit

19.60 10.50 2.88 9.00 41.98

This year (current) profit

= = =

(60 – 42) x 132,000 – 936,000 2,376,000 – 936,000 1,440,000

Sales(units)

936,000 + 1,440,000 60 – 41.98 2,376,000 18.02 131,853 units

= =

936,000 60 – 41.98 51,942 units

= = =

e.

AC/JUN 2018/MAF201

= = = =

BEP

d.

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FOUR (4) assumptions of Cost Volume analysis are: i. ii. iii. iv.

Variable cost per unit is constant and total variable cost changes. proportionately with the level of activity. Fixed costs remain constant within the relevant range of activity. The sales mix remains constant. There is a linear relationship between cost, revenue and volume. (any other relevant assumptions)

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Question 5 a. FOUR (4) purposes for budgeting: i. Planning ii. Performance measurement iii. Motivation iv. Control v. Coordination vi. Communication b. Meligai Mini Market Monthly Cash Budget for the Second Quarter of 2018 April May Cash receipts: Cash sales Credit sales Cash - van disposal Total receipts

49,250

Cash payments: Creditors (net of 10% discount) Wages Admin. Exp. Overheads Rental Total payments Changes in cash: Surplus/(deficit) Opening balance Closing balance

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8,750 40,500

June

9,000 72,900 7,300 89,200

9,500 78,525 88,025

51,750 19,000 9,000 7,000 8,000 94,750

45,000 20,000 8,000 8,500

45,000 24,000 11,000 9,500

81,500

89,500

(45,500) (5,400) (89,350)

7,700 (89,350) (81,650)

(1,475) (81,650) (83,125)

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WORKINGS: Collection from debtors Mac sales (75000 X 90%)=67,500 ( 67,500 x 38%) April sales (87,500) X 90%)=78,750 (78,750 X 38%) May sales (90,000 X 90%) =81,000 (81,000 X 38%) Total collection

APRIL 60% 40,500

40,500

MAY 38% 25,650 60% 47,250

72,900

JUNE

38% 29,925 60% 48,600 78,525

END OF SUGGESTED SOLUTION

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