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F5 mocks 09

F5 mocks 09

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Published by: shaggy2k9 on May 25, 2009
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Interim AssessmentKAPLAN PUBLISHING Page 1 of 9
Time allowed Reading time:
15 minutes
Writing time:
3 hours Answer all questionsDo not open this paper until instructed by the supervisor This question paper must not be removed from the examinationhall
Kaplan Publishing/Kaplan Financial
ACCA F5 Performance Management© Kaplan Financial Limited, 2008All rights reserved. No part of this examination may be reproduced or transmitted in any formor by any means, electronic or mechanical, including photocopying, recording, or by anyinformation storage and retrieval system, without prior permission from Kaplan Publishing.Page 2 of 9 KAPLAN PUBLISHING
Interim Assessment
Answer all questions
During the last 20 years, KL's manufacturing operation has become increasingly automatedwith computer-controlled robots replacing operatives. KL currently manufactures over 100products of varying levels of design complexity. A single, plant-wide overhead absorption rate(OAR), based on direct labour hours, is used to absorb overhead costs.In the quarter ended March 20X5, KL's manufacturing overhead costs were:$000Equipment operation expenses 125Equipment maintenance expenses 25Wages paid to technicians 85Wages paid to storemen 35Wages paid to despatch staff 40 ___ 310 ___ During the quarter, RAPIER Management Consultants were engaged to conduct a review of KL's cost accounting systems. RAPIER's report includes the following statement:In KL's circumstances, absorbing overhead costs in individual products on a labour hour absorption basis is meaningless. Overhead costs should be attributed to products using anactivity based costing (ABC) system. We have identified the following as being the mostsignificant activities:(1) Receiving component consignments from suppliers.(2) Setting up equipment for production runs.(3) Quality inspections.(4) Despatching goods orders to customers.Equipment operation and maintenance expenses are apportionable as follows:
Component stores (15%), manufacturing (70%) and goods despatch (15%).Technician wages are apportionable as follows:
Equipment maintenance (30%), setting up equipment for production runs (40%) andquality inspections (30%).During the quarter:
A total of 2,000 direct labour hours were worked (paid at $12 per hour).
980 component consignments were received from suppliers.
1,020 production runs were set up.
640 quality inspections were carried out.
420 goods orders were despatched to customers.KAPLAN PUBLISHING Page 3 of 9

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