JULY 2020

i. Depreciation of mixing machine in tomato sauce Production Cost

production
ii. Commission paid to sales representatives Administration Overhead
iii. Salary of the typist in Managing Director department Administration Overhead
iv. Wages of security guard in raw material warehouse Administration Overhead
v. Remuneration of scientist in laboratory Research and Development Overhead
vi. Hire of special machine Production Cost
vii. Advertising Selling and distribution Overhead
viii. Administrative office rent Administration Overhead
ix. Salary of factory workers Administration Overhead
x. The costs of materials used in prototypes Production Cost
i. Total operating for the second quarter of the year 2020.

Business license
RM 2,400 / 12 = RM200
RM 200 x 3 months = RM600

Salary Tutor
RM 1,200 x 3 months x 4 staff = RM 14,400

Rental
RM 30,000 / 12 = RM 2,500
RM 2,500 x 3 months = RM 7,500

Advertising
RM 200 x 3 months = RM 600

Utilities
RM 300 x 3 months = RM 900

Depreciation of furniture
RM 3,000 / 12 = RM 250
RM250 x 3 months = RM 750

Stationaries Expenses
RM 250 x 3 = RM 750

TOTAL = RM 600 + RM 14,400 + RM 7,500 + RM 600 + RM 900 + RM 750 + RM 750

= RM 25,500
ii. The total profit for the second quarter of 2020.

Students
RM 70 x 3 months x 146 students = RM 30,660
JUNE 2019

QUESTION 1

Bella Hair Care is a small salon business operated in Machang, Kelantan. The business is
considered an upscale full-service beauty salon. The owner manager, Puan Bella is unsure of
how to classify the business expenses as she is not a financial literate person. As a good
friend who is financially literate, Puan Bella need your assistance on determination and
classification of cost incurred for the business.

Puan Bella operates the salon with her three (3) stylists. Her salary is RM2,000 per month
while her stylists are paid RM1,200 per stylist per month. The salon incurred RM5,000 in May
2019 for hair care supplies. The annual insurance paid for the premise is RM12,000. The
maintenance for cutting tools is fixed at RM100 per month while rental for salon premise is
RM21,600 annually. The salon also advertises the business in Radio Malaysia Kelantan for
RM800 per month. The stylists are also received a monthly commission for sales of hair care
products. Details for sales of hair care products for May 2019 are as follows:

Hair care product Units sold Unit price (RM) Commission

percentage (%)
Shampoo & conditioner 120 25 5%
Hair serum 50 95 10%
Hair tonic 120 50 8%

Required:

a. List any five (5) indirect costs that may be incurred by a hair salon business.
(5 marks)

• Insurance
• Rental for salon premise
• Commission for sales of hair care products
• Advertisement
• Hair care supplies
b. Calculate the total fixed cost (TFC) and total variable cost (TVC) for Bella Hair Care
for the month of May 2019.
(10 marks)
(Total: 15 marks)

TOTAL FIXED COST (TFC) RM TOTAL VARIABLE COST (TVC) RM

Insurance
RM 12,000 / 12 1,000 Hair care supplies 5,000

Maintenance for cutting tools 100 Commission for stylist

Shampoo & conditioner
Salaries 120 x RM 25 = RM 3,000
Puan Bella 2,000 RM 3,000 x 5% 150
Stylists
RM 1,200 x 3 3,600 Hair Serum
50 x RM 90 = RM 4,750
Rental RM 4,750 x 10% 475
RM 21,600 / 12 1,800
Hair Tonic
Advertise 800 120 x RM 50 = RM 6,000
RM 6,000 x 8% 480

TOTAL 9,300 TOTAL 6,105

DEC 2019

QUESTION 1

A. The followings are cost items, types of business and cost classification.

No Cost items Businesses Cost classification

Example Flour Bakery Direct material
1 Wood Furniture making Direct material
2 Salary of barber Hair saloon Direct Labour
3 Thread Shoemaker Indirect Material
4 Salary of cleaner Bank Period cost
5 Fabric Fashion designer Direct Material
6 Free gift for promotion Insurance Period Cost
7 Depreciation of machinery Manufacturing Production Overhead
8 Rubber Tyre manufacturing Direct material
9 Salary of kitchen assistant Restaurant Direct Labour
10 Marketing Airline Period cost

Required:

Classify the cost in the table above into either direct material, direct labour,
production overhead or period cost. One cost item is intended for only one
classification.
(5 marks)

B. Kokocuci Sdn Bhd commenced its business on 1 November 2019. The company
provides basic car washing, polishing and waxing services. The company currently
employs one (1) supervisor, three (3) workers to assist in the business operations. The
company has one (1) water pump, two (2) heavy duty vacuums and two (2) polishing
machines. The following is a list of costs incurred by the company for the month of
November 2019.
RM
Depreciation of water pump 100
Depreciation of vacuums 200 per vacuum
Depreciation of polishing machines 150 per machine
Electricity (70% fixed and 30% variable) 1,300
Water (80% fixed and 20% variable) 450
Detergents/Chemicals 1,200
Wax 700
Supervisor’s salary 2,000
Labour/wages 1,200 per worker
Repairs/Maintenance of snow wash tank, vacuums, polishing
machine (70% fixed, 30% variable) 600
Administrative expenses (business insurance, marketing and
advertising fees, office supplies) 450
Rental of the shop 2,500
Business license 396 per annum
Mineral water for customers 100

Required:
 Compute the following costs for the month of November 2019.

i. Total Variable costs

ii. Total fixed costs
iii. Total costs
(10 marks)
(Total: 15 marks)

TOTAL VARIABLE COST (TVC) RM TOTAL FIXED COST (TFC) RM

Electricity Depreciation water pump

30% x RM 1,300 390 RM 100 x 1 100

Water Depreciation of vacuums

20% x RM 450 90 RM 200 x 2 400

Detergent / Chemicals 1,200 Depreciation of polishing machines

RM 150 x 2 300
Wax 700
Electricity
Repairs 70% x RM 1,300 910
30% x RM 600 180
Water
Mineral waters for customer 100 80% x RM450 360

Salary
Supervisor 2,000
Labour
RM 1,200 x 3 3,600

Repairs
70% x RM 600 420

Administrative expenses 450

Rental of the shop 2,500

Business License
396 / 12 33

TOTAL 2,660 TOTAL 11,073

i. Total Variable Costs = RM 2,660

ii. Total Fixed Costs = RM 11,073
iii. Total costs = FC + VC = TC
= RM 111073 t RM 2,660
= RM 13,733