CONFIDENTIAL 1 AC/APR 2019/MAF251

UNIVERSITI TEKNOLOGI MARA

COMMON TEST 1

COURSE : COST AND MANAGEMENT ACCOUNTING

COURSE CODE : MAF251
EXAMINATION : APRIL 2019
TIME : 1 HOUR 30 MINUTES

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of three (3) 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 test 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 4 printed pages
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CONFIDENTIAL 2 AC/APR 2019/MAF251

QUESTION 1

A. Users of accounting information can be broadly divided into internal parties within
organization and external parties outside the organization. You are given with the
following users:

i. Inland Revenue Board

ii. Financial Controller
iii. Production Manager
iv. Loan Provider

Required:

a. Classify the above users of accounting information whether they are internal
users or external users.
(2 marks)

b. Identify ONE (1) use of accounting information to each of the above users.
(4 marks)

B. Briefly explain FOUR (4) roles of management accounting.

(4 marks)
(Total: 10 marks)

QUESTION 2

As the management accountant of the company, the management requests you to prepare
the variance analysis on product Nero. For the month of April 2019, the budgeted production
and sales of Nero are 20,000 units. The company plans to sell Nero at a price of RM60.00
per unit.

The estimated direct material (Material A) purchased and used is 20,000 kgs at the price of
RM20.00 per kilogram. Normally the direct labours work 30,000 hours per month and they
are paid at a rate of RM10.00 per hour.

The standard variable overhead and fixed overhead costs were RM9.00 and RM4.00 per
unit respectively. It is the policy of the company to absorb variable overhead cost based on
direct labour hours while fixed overhead is absorbed based on units produced.

At the end of the month, the company identified that the actual production and sales were
22,000 units, while the actual selling price per unit was RM65.00. The additional data
available for the month is as follows:

Actual direct material purchased and used 25,000 kg @ RM550,000

Actual direct labour 30,000 hours @ RM240,000
Actual variable overhead costs RM240,000
Actual fixed overhead costs RM88,000

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CONFIDENTIAL 3 AC/APR 2019/MAF251

Required:

a. Prepare a standard cost card for a unit of Nero.

(4 marks)

b. Calculate the following variances:

i. Direct material price and usage variance
ii. Direct labour rate and efficiency variance
iii. Variable overhead expenditure and efficiency variance
iv. Fixed overhead expenditure and volume variance
v. Sales margin price and volume variance
(14 marks)

c. Prepare a statement reconciling the budgeted profit and the actual profit for the period.
(3 marks)

d. Give ONE (1) reason for each of the following variances:

i. Adverse direct material usage variance
ii. Favourable direct labour efficiency variance
(2 marks)
(Total: 23 marks)

QUESTION 3

Anggun Muslimah Sdn Bhd produces and sells special attire for Muslim women. A set of
product consists of soft cardigan matched with a scarf of the same material and design. The
company uses special fabric which is imported from China and Vietnam.

Currently, the company is facing a problem of resources that caused the company to decide
on the production mix to be produced next year based on the available resources. The
following information relates to the production and sales for the three sets of products,
namely Exclusive Set, Elegant Set and Stylish Set.

Selling price Cost per unit

Demand per unit Special Direct Total
Product
(sets) (RM) Fabric labour overheads
(RM) (RM) (RM)
Exclusive Set 8,750 150.00 50.00 30.00 51.50
Elegant Set 6,200 170.00 75.00 26.00 55.00
Stylish Set 8,250 170.00 60.00 36.00 57.00

Additional information:

i. Direct labour rate is RM20.00 per hour, while special fabric cost is RM25.00 per meter.
ii. There will be 36,000 meters of special fabric supplied from China and 20,000 meters
supplied from Vietnam throughout the year.

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CONFIDENTIAL 4 AC/APR 2019/MAF251

iii. Company pays sales commission to their sales personnel at a rate of 10% of the
selling price.
iv. The fixed production overheads are absorbed into the products based on direct labour
hours. The total budgeted direct labour hours available are 30,640 hours and the fixed
overheads for the period are budgeted at RM383,000.
v. The fixed administration expenses are expected to be RM1,000 per month.

Required:

a. Compute any excess and/or shortage of direct material and direct labour for next year.
(4 marks)

b. Suggest to the management of Anggun Muslimah Sdn Bhd on the most optimal mix of
products to be produced next year, considering the limited resources determine in (a)
above.
(11 marks)

c. Based on your suggestion in part (b) above, determine the total net profit that will be
obtained by Anggun Muslimah for next year.
(2 marks)
(Total: 17 marks)

END OF QUESTION PAPER

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