CONFIDENTIAL AC/DEC 2019/ACC116/319/165

UNIVERSITI TEKNOLOGI MARA

FINAL EXAMINATION

COURSE INTRODUCTION TO COST ACCOUNTING/COST

AND MANAGEMENT ACCOUNTING/COST
ACCOUNTING

COURSE CODE ACC116/319/165

EXAMINATION DECEMBER 2019

TIME 3 HOURS

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of five (5) questions.

2. Answer ALL questions in the Answer Booklet. Start each answer on a new page.

3. Do not bring any material into the examination room unless permission is given by the
invigilator.

4. Please check to make sure that this examination pack consists of:

i) the Question Paper

ii) an Answer Booklet - provided by the Faculty

5. Answer ALL questions in English.

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

This examination paper consists of 7 printed pages

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL
CONFIDENTIAL 2 AC/DEC 2019/ACC116/319/165

QUESTION 1

a. The prime cost consists of direct material, direct labour and direct expenses. List TWO
(2) examples of direct expenses.
(2 marks)

b. Cost can be classified according to its function, nature and behaviour. Identify the cost
behaviour for each of the following:

Fixed telephone bill

i. Flour and sugar in a bakery shop
ii. Harraz's salary who is working as a car dealer
v. Rent of factory building.
(2 marks)

Explain briefly the differences between Cost Accounting and Financial Accounting based
on the following criteria:

Purpose
Legal framework
User of information
Reporting period
(4 marks)
(Total: 8 marks)

QUESTION 2

a. i. Describe the ordering cost and carrying cost with an example each pertaining
to material control system.
(3 marks)

ii. Identify any FOUR (4) documents used in Materials Purchasing and
Receiving Process.
(2 marks)

b. Mei Mei sells a product called "Dewberry Tart". To produce the product, Mei Mei Sdn
Bhd uses one main ingredient, which is Dewberry Powder. The expected monthly
production of "Dewberry Tart" for the year 2019 is 6,200 containers. A container of
"Dewberry Tart" uses 250 grams of Dewberry Powder.

The Dewberry Powder was purchased from a wholesale distributor in Singapore at a

purchase price of RM150 per kilogram. The freight and forwarding cost per order is
RM350. The staffing cost and documentation cost is RM220 per order. Mei Mei Sdn Bhd
has incurred the insurance cost of keeping the inventory at RM5 per kilogram. The cost
of obsolescence and deterioration of stock is estimated at 5% of the inventory value. It
takes between one to two weeks for the Dewberry Powder to be delivered to Mei Mei
Sdn Bhd. The weekly production of "Dewberry Tart" was between 1,000 to 1,200
containers.

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

CONFIDENTIAL AC/DEC 2019/ACC116/319/165

Required:

Calculate the following for the Dewberry Powder:

Economic Order Quantity (EOQ) using formula method

i. Reorder Stock Level
ii. Maximum Stock Level
v. Minimum Stock Level
(10 marks)

c. Wawalicious Sdn Bhd is a company producing chiffon cakes with different flavours.
The main ingredient in manufacturing the chiffon cake is secret mixed cake flour ordered
specially from a supplier in Kota Bharu, Kelantan. One whole chiffon cake requires 1kg
of mixed cake flour. The company keeps its inventory based on FIFO (First-In-First-
Out) method. The record in the store shows an opening balance of 2,080kg of cake flour
purchased on July at RM3.00 per kg and 3,140 kg of cake flour purchased on November
at RM3.20 per kg.

The following transactions occured on November 2019.

November 2 Issued 1,250 kg of cake flour to production department.

3 Bought 3,100 kg at RM3.30 per kg of cake flour from supplier
8 Production department requested cake flour to produce 2,400 unit of
cakes.
15 Purchased 1,800 kg cake flour at RM3.50 per kg. The supplier allowed
a 20% trade discount for Happy Hour promotion and the price stated
was before the deduction of trade discount.
16 Returned 250 kg of cake flour purchase on 3rd of August 2019 to
supplier.
21 Issued 3,430 kg of cake flour to production department.
27 Returned 150 kg from production department to store department due
to excess taken from the latest issue of RM3.30 per kg
31 Stock count showed a balance of 2,580 kg of cake flour.

Required:

i. Prepare a store ledger card for the mixed cake flour for the month of November
2019.
(12 marks)

ii. Identify the value of net purchased for the mixed cake flour.
(1 mark)
(Total: 28 marks)

) Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

CONFIDENTIAL AC/DEC 2019/ACC116/319/165

QUESTION 3

Vanilly Enterprise is in the business of producing medical glove. The business employs four
(4) workers. Shah and Irwan are skilled worker and they are paid based on output, whereas
Fika and Husna are semi-skilled worker who are paid based on hourly rate. The business's
finance officer provides the following information on the worker for the month of November
2019:

Skilled worker Scheme Output

Shah Straight Piecework Scheme at a rate of RM1.20 per 2,200 units
good unit produced. (inclusive of
10 rejected
Rejected unit will be paid at half of the normal rate. units)

Guaranteed minimum wages is at RM625 per week.

Irwan Differential Piecework Scheme for good unit 2,100 units

(inclusive of
Up to 500 - RM0.90 per unit 6 rejected
501 - 1,000 - RM1.20 per unit units)
Above 1,000 - RM1.50 per unit

Rejected unit will be paid at RM0.50 per unit.

Guaranteed minimum wages is at RM750 per week.

Fika and Husna are semi-skilled worker and they are paid on time based scheme. Total hours
work for Fika and Husna for the month of August 2019 are 180 and 210 hours respectively.
Normal hours work is 40 hours per week. Normal rate is RM10 per hour. Overtime is paid at
150% of the normal rate. However, if employee worked more for than 200 hours per month,
the overtime rate is at 200% of the normal rate.

Required:

a. Calculate the gross wages earned for each worker for the month of November 2019
(assuming there are 4 weeks in a month). Show all calculations.
(18 marks)

b. State TWO (2) advantages and disadvantages of time based scheme.

(4 marks)
(Total: 22 marks)

) Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

CONFIDENTIAL AC/DEC 2019/ACC116/319/165

QUESTION 4

Canon Creek Sdn .Bhd. is a manufacturing company in North Borneo. The company produces
a limited design of sofa, which has to go through three (3) production departments, namely
Measuring, Cutting and Assembling. The Measuring department is using direct labour to
measure the raw materials. Meanwhile, the Cutting and Assembling departments are both
machine oriented. In addition, Canon Creek Sdn. Bhd. has two (2) service departments: Store
and Canteen, which support the activities in the production departments.

The following information relates to the operation for year 2019.

Overhead Total Measuring Cutting Assembling Store Canteen

costs (RM) (RM) (RM) (RM) (RM) (RM)

Indirect 250,000 90,000 65,000 55,000 40,000 -

material
Indirect 180,000 80,000 30,000 30,000 30,000 10,000
labour
Equipment 30,000
depreciation
Factory 15,000
Insurance
Supervision 40,000
Utilities 50,000

Additional information:

Total Measuring Cutting Assembling Store Canteen

Book value of 150,000 30,000 65,000 45,000 8,000 2,000
equipment
(RM)
Floor area 6,000 2,000 1,200 1,200 1,000 600
(square foot)
Number of 25 8 7 5 2 3
employees
Direct labour 10,800 6,500 2,500 1,800 ~ ~

hours
Material 100 30 20 30 20 ~

handling (%)
Machine 8,000 1,500 3,200 3,300 ~ ~

hours

The company uses repeated distribution method for the allocation of overhead costs from the
service department/s to the production department/s.

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

CONFIDENTIAL AC/DEC 2019/ACC116/319/165

Required:

a. Identify the most suitable basis of apportionment for the overhead costs below:

i. Rent and rates of office

ii. Power expenses
iii. Insurance on factory
iv. Supervisor's salaries
(4 marks)

b. Prepare an overhead analysis sheet, showing clearly the basis of apportionment and
reapportionment. (Round up your answer to the nearest RM).
(17 marks)

c. Calculate the overhead absorption rate (OAR) for each production department by using
the appropriate basis of absorption. (Round up your answer up to two decimal places).
(3 marks)

d. The actual information regarding the overhead cost and activities are provided below:

Measuring Cutting Assembling

Total overheads (RM) 190,500 160,000 135,000
Direct labour hours 5,200 1,650 1,550
Machine hours 2,250 3,100 2,900

Required:

Calculate the over or under absorption of overheads for each production department.
(Round up your answer to the nearest RM).
(6 marks)
(Total: 30 marks)

>Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

CONFIDENTIAL AC/DEC 2019/ACC116/319/165

QUESTION 5

a. List TWO (2) features of job costing.

(2 marks)

Baby Didi Enterprise is an established company which produces built in kitchen

cabinet. During the month of November 2019, the company receives two different
orders from customers.

The following information is available for the orders.

Order from Order from

Expenses Puan Zayrah, Mrs Kok,
Puchong Bangsar

RM RM
Direct Material:
Wood 550
Glass 350 450
Metal 870
Direct Labour:
Skilled 440 440
Semi-skilled 230 230
Indirect materials 150 180
Indirect labour 40 50
Power, heat and electricity 35 85
(80% for factory and 20%
for office)
Delivery cost to customer's 40 40
house
Installation cost at 100 100
customer's premise
Clerical expenses 25 25
Other production overhead 30 30
cost
Profit calculation 20% on mark up 20% on margin

Required:

Prepare job cost sheet for the order from Mrs Kok, Bangsar. Show clearly the prime
cost, production cost, total cost and selling price.

(10 marks)
(Total: 12 marks)

END OF QUESTION PAPER

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL