CONFIDENTIAL 1 AC/OCT 2019/MAF251

UNIVERSITI TEKNOLOGI MARA

COMMON TEST 1

COURSE : COST AND MANAGEMENT ACCOUNTING

COURSE CODE : MAF251
EXAMINATION : OCTOBER 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/OCT 2019/MAF251

QUESTION 1

a. Differentiate management accounting and financial accounting based on the following

perspectives:
i. Main users
ii. Scope of report
(4 marks)

b. Briefly explain any FOUR (4) characteristics of good management accounting

information.
(6 marks)
(Total: 10 marks)

QUESTION 2

EasyPrint Company is a leading business offering a variety of printer products. One of the
most popular brand and best-selling printer is the ALBERTA. The expected production and
sales unit of ALBERTA is 4,200 units per year. The variable overhead is absorbed based on
direct labour hour while the fixed overhead is absorbed based on number of units produced.
The company is using a standard costing system and has set the following standard for
producing one unit of ALBERTA:

Standard profit RM47 per unit

Direct material usage 9 kg
Direct material price RM12 per kg
Direct labour hour 5 hours
Direct labour rate RM7 per hour
Variable overheads rate RM6 per hour
Fixed overheads RM30 per unit

Given below is the actual result for the month of September 2019:

Actual production and sales 400 units

Selling price RM260 per unit
Direct material 3,500 kg at RM11.50 per kg
Direct labour 1,800 hours at RM7.50 per hour
Variable overheads RM12,000
Fixed overheads RM11,000

Required:

a. Prepare a standard cost card for one unit of ALBERTA. Show clearly the standard selling
price per unit.
(4 marks)

b. Calculate the following variances:

i. Material price and usage

ii. Labour rate variance and efficiency
iii. Variable overhead expenditure and efficiency
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CONFIDENTIAL 3 AC/OCT 2019/MAF251

iv. Fixed overhead expenditure and volume

v. Sales margin price and volume
(14 marks)

c. Prepare the profit reconciliation statement for the month of September 2019.
(3 marks)

d. State any TWO (2) limitations of standard costing.

(2 marks)
(Total: 23 marks)

QUESTION 3

Koolit Best Sdn Bhd, an establish genuine leather product manufacturer, is currently facing a
problem in meeting the customers’ demands. The company faces difficulty in obtaining the
main raw material due to the short supply in the market. Currently, the main raw materials
can be bought at RM200.00 per square feet and it is estimated to remain constant over the
next period. Due to this, the whole demand of their well-known three products Wallet,
Handbag and Briefcase, by the famous brand name “Carlo Rimau”, cannot be satisfied.

For the coming quarter, the accountant has estimated the sales revenue to be as follows:

Wallet RM 500,000
Handbag RM1,000,000
Briefcase RM1,200,000

Data extracted from the previous records revealed the following information for one unit of
each product:

Per unit Wallet Handbag Briefcase

Selling price RM200 RM500 RM800
Direct material cost RM100 RM300 RM500
Direct labour hour 2 3 5
Variable indirect material RM15 RM40 RM30
Other variable overhead RM10 RM15 RM19

Direct labour is RM15.00 per hour. The fixed production overheads for that period are
estimated to be RM100,000 and fixed administration overheads are RM50,000. Feedback
from suppliers indicates that the company can only manage to obtain 4,000 square feet of
raw materials imported from India and another 3,000 square feet from Africa.

Required:

a. Determine the shortage of direct material and advice the company on the most
profitable mix of products to be produced based on the availability of the material.
(show all workings)
(12 marks)

b. Calculate the net profit that can be derived by the company if the above suggestion is
carried out?
(3 marks)
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CONFIDENTIAL 4 AC/OCT 2019/MAF251

c. Provide TWO (2) examples of factor that could be the limiting factor in a production.
(2 marks)
(Total: 17 marks)

END OF QUESTION PAPER

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