UNIVERSITI TUNKU ABDUL RAHMAN

ACADEMIC YEAR 2008/2009

APRIL EXAMINATION

UBAM2033 MANAGERIAL ACCOUNTING

WEDNESDAY, 6 MAY 2009

TIME: 9.00AM -11.30AM (2.5 HOURS)

BACHELOR OF BUSINESS ADMINISTRATION (HONS) ENTREPRENEURSHIP

Instructions to Candidates:

This paper comprises TWO (2) sections.

Section A : [Total: 40 marks]

This section consists of ONE (1) COMPULSORY question. The question carries FORTY (40) marks.

Section B : [Total: 60 marks]

This section consists of THREE (3) questions. Answer ANY TWO (2) questions. Each question carries THIRTY (30) marks.

Marks are allocated for all relevant workings shown.

This question paper consists of 4 questions on 7 printed pages

2 UBAM2033 MANAGERIAL ACCOUNTING

Section A

[Total: 40 marks)

Answer all parts of this COMPULSORY question.

QI. (a)

Ahmad Sdn. Bhd. developed the following information for the product it sells:

Sales price RM50 per unit

Variable cost of goods sold RM23 per unit

Fixed cost of goods sold RM700,000

Variable selling expense 10% of sales price

Variable administrative expense RM2.00 per unit

Fixed selling expense RM400,OOO

Fixed administrative expense RM300,000

For the year ended December 31, 2008, Ahmad Sdn. Bhd. produced and sold 80,000 units of product.

Required:

(i) Prepare a Cost Volume Profit (CVP) income statement using the contribution margin format for Ahmad Sdn. Bhd for 2008. (10 marks)

(ii) What was the company's break-even point in units in 2008? Use the

contribution margin technique. (5 marks)

(iii) What was the company's margin of safety in Ringgit Malaysia (RM) in

2008? (5 marks)

(b) Bistari Berhad has budgeted sales revenue as follows:

Budgeted Sales Revenue

RM

January 65,000

February 90,000

March 110,000

April 50,000

May 55,000

June 30,000

Past experience has indicated that 80% of sales each month are on credit and that collection of credit sales occurs as follows: 60% in the month of sale, 30% in the month following the sale, and 5% in the second 1110nth following the sale. The other 5% is uncollectible.

Required:

Prepare a schedule for Bistari Berhad which shows expected cash receipts from sales for the months of April, May, and June. (20 marks)

[Total: 40 marks]

This question paper consists of 4 questions on 7 printed pages

3 UBAM2033 MANAGERIAL ACCOUNTING

Section B

[Total: 60 marks]

Answer ANY TWO (2) questions out of the THREE (3) questions. Each question carries THIRTY (30) marks.

QI. (a)

The following data are given:

Budgeted output for the year 9,800 units

Standard details for one unit:

Direct materials 40 square metres at RM5.30 per square metre Direct wages:

Bonding department 48 hours at RM2.50 per hour Finishing department 30 hours at RM] .90 per hour

Budgeted costs and hours per annum:

Variable overhead: (RM)

Bonding department 375,000

Finishing department 150,000

(hours) 500,000 300,000

Fixed overhead:

Production

Selling and distribution Administration

(RM) 392,000 196,000 98,000

Required:

From the information given above,

(i) Prepare a standard cost sheet for one unit and enter on the standard cost sheet to show sub-totals for:

(I) prime cost

(II) variable production cost

(III) total production cost (IV) total cost

(17 marks)

(ii) Calculate the selling price per unit allowing for a profit of 15% of the

selling price. (3 marks)

This question paper consists of 4 questions on 7 printed pages

4 UBAM2033 MANAGERIAL ACCOUNTING

Section B 01. (continued)

(b) The following data are extracted from the current year's budget of PQR Berhad:

Machine Assembly Finishing
Shop Shop Shop
Direct labour hours 20,000 18,000 10,000
Hourly wages rate RM9.75 RM9.30 RM9.00
Production Overhead RM21 0,000 RM135,000 RM60,000 A customer has requested a quotation for supplying a special piece of equipment and the estimator has worked the following details:

Components to be purchased Material from store

Deliver cost to customer Direct labour times:

Machining Assembling Finishing

: RM648 : RM810 :RM180

: 80 hours : 40 hours : 30 hours

Administration and marketing cost are covered by adding 10% to the cost of manufacture. 12 Y2 % is added to the total (delivered) cost for profit.

Required:

Calculate the price to be quoted.

(10 marks) [Total: 30 marks]

Q2. DEREK Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs). The company has two products, H 16Z and P25P, which it has provided the following data:

H16Z P25P
RM RM
Direct materials per unit 10.20 50.50
RM RM
Direct labor per unit 8040 25.20
Direct labor-hours per unit 0040 1.20
Annual production 30,000 10,000 The company's estimated total manufacturing overhead for the year is RM 1,464,480 and the company's estimated total direct labor-hours for the year is 24,000.

This question paper consists of 4 questions on 7 printed pages

5 UBAM2033 MANAGERIAL ACCOUNTING

Section B 02. (continued)

The company is considering using a variation of activity-based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below:

Activities and Activity Measures Estimated Overhead Cost
Supporting direct labor (DLHs) RM 552,000
Setting up machines (setups) 132,480
Parts administration (part types) 780,000
Total RM 1,464,480 HI6Z P25P Total
Supporting direct labor
(hours) 12,000 12,000 24,000
Setting up machines
(number of setup) 864 240 1,104
Parts administration
(number of parts) 600 960 1,560
Required: Determine the manufacturing overhead cost per unit for each of the company's TWO (2) products under:

(a)

the traditional costing system.

(8 marks)

(b)

activity-based costing system.

(22 marks) [Total: 30 marks]

Q3. (a)

A textile company has recently introduced a system of standard costing. As the management accountant you are requested to demonstrate the value of the system to the senior management. The following data apply to period 5 which is a four week financial period.

Direct Materials (Actual) Purchases:

Used:

Material X Material Y Material X Material Y

50,000kg for RM 158, 750 25,000kg for RM 105,000 4,800kg

1,800kg

Direct Labour

Department A Department B

Actual Hours 3,000 2,400

Rate per hour RM4

RM 6

This question paper consists of 4 questions on 7 printed pages

6 UBAM2033 MANAGERIAL ACCOUNTING

Section B 03. (a) (continued)

Standard cost for per unit of finished product:

Direct Material X Direct Material Y

Direct Wages- Department A Direct Wages- Department B

10 kg at RM3.25 per kg 5 kg at RM4 per kg

8 hours at RM4 per hour 5 hours at RM5 per hour

RM 32.50 20.00 32.00 25.00

109.50

400 units of actual finished goods were produced in the period. The standard selling price for I unit of finished product is RM120. The budgeted units for the period are 700 units.

Required:

(i) Calculate the price and usage variances for each of the direct material

X and Y. (6 marks)

(ii) Calculate the rate and efficiency variances for the direct labour

employed by each department A and B. (6 marks)

(iii) Explain ONE (1) possible reason for the occurrence of each variance shown in your answers (i) and (ii) above without stating the same reason more than once. (8 marks)

(b) From the information below the following standard cost card is constructed:

Standard Cost Card

Product: Plastic Container xn RM

Direct material 4 kilograms @ RM3 per kilogram 12

Direct labour 5 hours @ RM4 per hour 20

Variable overhead Fixed overhead

Standard production cost

5 hours @ RM I per hour 5 hours @ RM3 per hour

5 15 52

COMPANY A PRODUCTION DATA FOR MONTH 1.

Assume that in Month I, Company A produced and sold 9,500 Containers and that the following cost information applied:

Direct Material used: 37,000 kilograms at a total cost of RM I 19,880

Direct Labour hours paid for: 49,200 hours at a total cost of RM200, 736

Variable overhead incurred: RM47,000

Fixed overhead incurred: RM 145,000

Fixed overheads are budgeted at RM150.000 per month

This question paper consists of 4 questions on 7 printed pages

r

7 UBAM2033 MANAGERIAL ACCOUNTING

Section B 03. (b) (continued)

You are required to calculate the following variances:

(i) Total material cost variance

(ii) Material price variance

(iii) Material usage variance

(iv) Total direct labour variance

(v) Direct labour rate variance

(vi) Direct labour efficiency variance

(vii) Total variable overhead cost variance

(viii) Variable overhead expenditure variance

(ix) Variable overhead efficiency variance

(10 marks) [Total: 30 marks]

This question paper consists of 4 questions on 7 printed pages