You are on page 1of 8

University of Finance – Marketing

HELP Bachelor of Business (Hons)

Management Accounting 1


Date of Release:
Beginning of Week 7
[26 March 2018]
Due Date: Week 12 (10 May 2019)
Value: 15% of total assessment for this subject


1. This is a group based assignment. Each group should consist of [to be finalised
by lecturer with discussion with convenor]. Individual submission of this
assignment is NOT allowed and will be severely penalised.

2. Print out, fill in and submit the attached form on the following page together with
your assignment.

3. The FEEDBACK REPORT section in the form MUST be filled in individually

by each of the members. Feedback should NOT exceed the space provided.

4. Please take note that copying the work of others, allowing others to copy your
work, and / or attempting to do any of the above mentioned will result in
automatic failure of your assignment. NO EXCUSES FOR ACTS OF
PLAGIARISM WILL BE ENTERTAINED. You may of course consult
textbooks, journals, or any publications for reference purposes. All sources or
materials used should be clearly quoted / referenced.

5. Before submitting your assignment you should make a copy and submit the
original for assessment. Late submissions will not be entertained unless there is
(are) some legitimate mitigating factor(s).


Student must attach the Turn-it-in Report to their assignments when submitting the

Class ID : 19961714

Enrolment password : ACC103ASSG

Note : Only submit the essay part in Q2 (d) of the assignment for the Turnitin.

DO NOT submit any of the other parts.



What matters did you find were interesting or challenging about this assignment;
and working as a group? (Fill in your particulars and feedback in the space
provided below. Your feedback should NOT exceed space provided).

Member 1 :
Member’s Name & ID Work Done Signature

Member 2 :
Member’s Name & ID Work Done Signature

Member 3 :
Member’s Name & ID Work Done Signature
Member 4 :
Member’s Name & ID Work Done Signature

Member 5 :
Member’s Name & ID Work Done Signature

Member 6 :
Member’s Name & ID Work Done Signature
Question 1 (30 marks)

Oil & Gas Industry produces 2 joint products. Both products require additional
processing beyond the split-off point. There were no opening inventories at 1 April
2019. The following information relates to the month of April 2019 :

Production (litres) 600,000 400,000
Sales (litres) 580,000 350,000
Closing inventories (litres) 20,000 50,000
Selling price per pound
Additional processing costs (total) $400,000 $200,000
Total joint processing cost $3,000,000

The closing inventories are finished goods that are ready for sale.

Required :

(a) Determine the cost of the ending inventories of each of the products as at 30 April
2019 using the relative sales value method.
(8 Marks)

(b) Determine the cost of the ending inventories of each of the products as at at 30
April 2019 using the net realisable value method.
(8 marks)

(c) Determine the cost of the ending inventories of each of the products as at at 30
April 2019 using the constant gross margin method.
(8 marks)

(d) “DEEZEL” could be processed further into “RON99.9” for an additional cost of
$170.00 per pounds. “RON99.9” would sell for $750.00 per unit. Should the
company produce “RON99.9”? Show the necessary computation to justify your
(6 marks)
QUESTION 2 (35 marks)

Fraser & Hill. is a factory that produces Air-Cond coolant, COOLER and it starts its
process in the Moulding Department. Upon completion of processes in Moulding
Department, the product is transferred to Filling Department in order to complete its

In the Filling Department, the conversion costs are incurred uniformly throughout the
process. Materials are added uniformly throughout the process.. Overhead is allocated
on the basis of 100% of the direct labour cost.

Work in process, 1 May 2019 (20,000 units, 70% complete) cost of which includes:
Transfer In – Moulding Department $ 500,000
Direct Materials – Filling Department $ 1,500,000
Direct Labour - – Filling Department $ 800,000
Overhead – Filling Department $ ?

During the month of May 2019; 100,000 units were completed and transferred to
finished goods inventory.

The Filling department’s costs during May 2019 were:

Transferred in $ 1,000,000
Material added $ 2,000,000
Direct Labour $ 1,500,000
Overheads $ ?

At the end of May 2019, 40,000 units were still in process in Filling department.
These were expected to be 60% complete of for material and 50% for conversion.
Required :

(a) Prepare the Filling Department production cost report for the month of May 2019
using (round up to 2 decimal place) :
i. Weighted Average method
ii. FIFO method

(b) Assume that the conversion costs of Filling Department in the current month
decrease by 20%. What is the new conversion cost per equivalent unit and costs of
units completed and transferred out using
i. Weighted Average and
ii. FIFO method?


(i) Based on the following case study information, build a spreadsheet model
using Microsoft Excel to answer the accompanying problems.
(ii) The spreadsheet model should have an “Output Section” (whereby the final
answers to each problem is presented).
(iii) Program your spreadsheet to perform all necessary calculations. Do not “hard
code” any amounts, PLEASE use the addition, subtraction, multiplication,
division operations or any other specialised formulas.
(iv) Print a copy of the spreadsheet with the answers / results to the problems.
(v) Print a copy of the spreadsheet showing the formulas used therein.

Note : Please submit a copy of your CD with your Excel file.

Question 3 (35 marks)
COOLOFF Traders produces three products, TURBO and SILENCER, all made from
the same material. Currently, the business uses traditional absorption costing to
allocate overheads to its products. The business is now considering an activity-based
costing system in the hope that it will improve profitability. Information for the three
products for the last year is as follows:

Production (units) 15,000 10,000
Raw material usage in total in ($) 36,000 43,200
Direct labour hours in total 15,000 10,000
Machine hours in total 8,000 7,000
Number of production runs per annum 16 12
Number of purchase orders per annum 24 28
Number of deliveries to retailers per annum 48 30

Direct labour cost was $10.00 per hour. The annual overhead costs were as follows:
Overhead $ Cost driver
Machine set up costs 30,000 Machine hours
Machine running 70,000 Number of production runs
Procurement costs 50,000 Number of purchase order
Delivery costs 50,000 Number of deliveries
Total 200,000

You are required to:

a. Calculate cost per unit for TURBO and SILENCER under traditional costing,
using direct labour hours as the basis for apportionment.
(8 marks)
b. Calculate cost per unit for TURBO and SILENCER under activity-based costing
(12 marks)
c.Suppose the company decides to use ABC to set their selling price. What would be
the minimum selling price per unit for each product if the company requires a
gross profit margin of 20% for all products?
(5 marks)
d. Based on the understanding on traditional costing and activity based costing ,
analyse the following comment and provide a write-up on your decision with
relevant illustration.
“ Traditional costing and activity based costing are still a costing method. As
such, it does not matter which costing method can be used in determining the
cost of a product. As long as we are able to determine the cost (irrespective of
the method), that will be sufficient for a factory to determine the selling price”
(10 marks)