Sample Examination Paper for Cost Control PDF

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UG6041 and UG6044 Cost Control, Analysis and Management (Part 1 and Part 2)

SAMPLE EXAMINATION PAPER INDEX NUMBER:

____________________________________

MODULE TITLE:

Cost Control, Analysis and Management (1 or 2)

MODULE CODE:

UG 6041 OR UG6044

DATE: TIME: INSTRUCTIONS: 1. Read the exam question paper carefully. 2. You will be allowed 10 minutes reading time prior to the commencement of the examination paper. 3. There are 4 questions in this examination paper. You are required to answer any THREE questions. 4. Answer the questions in the booklet provided, using blue or black pen. 5. Clearly identify questions answered by entering their numbers in the appropriate box on the front sheet of the answer booklet. 6. Start a new page for each answer and clearly identify each answer by number. 7. Write clearly and leave the margins free from notes. Any rough notes that do not form part of your answer should be clearly ruled through in pencil. 8. You are allowed to use a non-programmable calculator in this examination. 9. Each question shows its allocated marks. All questions carry the same marks.

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UG6041 and UG6044 Cost Control, Analysis and Management (Part 1 and Part 2)

READ THE INSTRUCTIONS ON THE FRONT COVER OF THIS QUESTION PAPER CAREFULLY.

ANSWER ANY THREE QUESTIONS. EACH QUESTION HAS EQUAL MARKS ALLOCATED.

FOR ESSAY TYPE QUESTIONS YOU ARE REQUIRED TO WRITE AT LEAST 500 WORDS (including the different sections of the same question).

TIME: 3 hours

Question 1: Financial accounting and Management accounting

(33 marks)

a) List and explain the 7 main differences between financial accounting and management accounting. (14 marks)

b) What are the 6 main functions of management accounting? Explain briefly each function. (12 marks)

c) As a future manager, why do you need to have an understanding of accounting? (7 marks)

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UG6041 and UG6044 Cost Control, Analysis and Management (Part 1 and Part 2)

Question 2: Decision making

(33 marks)

Gold Limited has been asked to quote for a special order. The details are as follows: a) Prices are to be quoted at order levels of 40,000, 50,000 and 75,000 units respectively. b) Due to adverse market conditions, at the moment the company has surplus capacity and it could produce another 80,000 units. c) Each unit would cost €5 for direct materials and €8 for direct labour. d) The company normally absorbs production overheads on the basis of 20% of direct labour cost, and non-production overheads on the basis of 30% of direct labour cost. Overhead absorption rate is calculated on full capacity. e) Distribution costs are expected to be €3 per unit. f) The company’s normal profit is 15% of the total cost. However, it is prepared to reduce this profit to 10% if the order is at least for 50,000 units, and to 5% if the order reaches 75,000 units. g) This contract would require a specific additional cost of €120,000 which would increase to €150,000 if the output is higher than 60,000 units.

Required:

a) Suggest a selling price per unit that Gold Limited might charge if the contract was for 40,000, 50,000 and 75,000 units respectively. (14 marks)

b) Suggest the profit that it could expect to make at each of these levels. (3 marks)

c) Which order would be the best for Gold Limited? Why? (16 marks)

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