CONFIDENTIAL AC/DEC 2021/ACC416

UNIVERSITI TEKNOLOGI MARA

TEST 1

COURSE : COST AND MANAGEMENT ACCOUNTING

COURSE CODE : ACC416

EXAMINATION : 4 DECEMBER 2021

TIME : 9 AM – 11.30 AM (2 ½ HOURS)

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of three (3) questions.

2. Answer ALL questions. Start each answer on new page.

3. Discussion is strictly prohibited

3. Answer ALL questions in English.

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

This examination paper consists of 6 printed pages

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QUESTION 1

A. Identify the following cost into either prime cost, production overheads cost,
administration cost or selling and distribution cost.

No. Cost Items Cost Classification

i. Road tax for delivery lorries.
ii. Safety glass for production workers
iii. Cost of clay in making vase.
iv. Insurance for factory building
v. Depreciation of cutting machine
vi. Depreciation of photocopy machine
vii. Comission paid to salesperson
viii. Cost of advertisement board
ix. Cost of beverages in the general office
x. Cost of engine in producing car
(5 marks)

B. Yummy Bakery is a small business owned by Puan Anilza operated in Lumut, Perak
producing cakes and buns. The owner wants to expand the business at Pangkor Island
due to high demand during festive seasons and school holidays. Thus, to open a new
branch, they need to understand in detail the following costs involved for the business.

Butter in producing cakes.

Electricity and water bills for production of cake and buns.
Cashier’s salaries at the bakery shop.
Depreciation of ovens.
Hire of special mixer.
Brown and caster sugar in making cakes and buns.
Baker’s salary based on unit produce
Vanilla essence in making cakes and buns.
Depreciation of refrigerator and chiller
Advertising cost.

Required:
i. Identify two (2) suitable cost unit for cakes producing by Yummy Bakery.
(2 mark)
ii. Classify the costs incurred in Yummy Bakery according to appropriate cost
behaviour (fixed, variable and semi variable cost).
(5 marks)
(Total: 12 marks)

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QUESTION 2

A. Identify the document for the following function of material control system.
No Function Document
i. Document used to check the condition and quality of the
materials received to ensure only materials in good condition
is received.
ii. Document that keeps the record of the value and quantity of
stock issued, received and its balances
iii. Document issued to the selected supplier by the purchasing
department providing details of the stock items to be
purchased
iv. Document used to request materials from the store.
v. Document issued to the purchasing department by
storekeeper or any department that requires for purchasing
the material.
(5 marks)

B. Linggi Food Sdn. Bhd. produces pineapple jam for sales in Negeri Sembilan. The
company buys the main ingredient which is the pineapple fruits from local farmers.
Each bottle of pineapple jam produced requires 2 kilograms of pineapple fruits. The
company uses First-In-First-Out (FIFO) to record the inflows and outflows of pineapple
fruits inventory in kilograms.

The opening balance of the pineapples as of 1 November 2021 was 500 kilograms.
consists of the following batches:

350 kilograms at RM4.00 per kilogram (purchased on 31 October 2021)

150 kilograms at RM3.50 per kilogram (purchased on 24 October 2021)

The following transactions took place during November 2021:

Date Transactions
Nov 2 Issued 190 kilograms of pineapple to production department
6 Purchased 300 kilograms of pineapple at RM4.50 per kilogram
8 Issued 320 kilograms of pineapple to production department
9 Purchased 200 kilograms of pineapple at RM4.30 per kilogram
11 Issued pineapple to production department for producing 175 bottles
of pineapple jam
17 Purchased 200 kilograms of pineapple at RM4.80 per kilogram
18 Production department returned 3 kilograms of pineapples at the
latest issue price.
22 Return to supplier 20 kilograms of pineapple due to error. The
pineapples were purchased on 17 November 2021.
30 The month-end stock count revealed that 3 kilograms of
pineapples have gone bad and needed to be written off.

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Required:
i. Prepare a store ledger card for November 2021 using the First-In-First-Out
(FIFO) method. Show clearly the amount of closing inventory balance.
(16 marks)
ii. Calculate the cost of material issues to production department
(1 mark)

C. Zuni Sdn Bhd sells organic plants through online shopping platforms. One of the
fertilisers used in growing the plants is an organic fertiliser which the company
obtains from Thailand at RM60 per bottle. It takes 2 to 4 weeks for the supplier to
deliver to the company when ordered. The monthly usage of the fertiliser is 500
bottles. Currently, the business used 120 to 130 bottle per week.

The following data relates to the purchase of the organic fertiliser:

• Delivery cost is RM40 per order.
• Administration cost is RM17.50 per order.
• Insurance during delivery RM10 per order
• Interest rate is estimated at 5% of the purchase’s price.
• Storage cost is RM1 per bottle.

Required:

Calculate the following inventory control level for the organic fertiliser

i. Economic Order Quantity (EOQ) using equation method

ii. Re-order Inventory Level
iii. Maximum Inventory Level
iv. Minimum Inventory Level
v. Total cost of ordering cost and carrying cost if the company orders at the
EOQ.
(13 marks)
(Total: 35 marks)

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QUESTION 3

Hias Ria Sdn Bhd is a manufacturer of wooden flooring and walls. The company used high
quality of flooring material which comes in many species such as chengal, balau, nyatoh and
merbau. The company employs skill and semi-skill workers who skill workers are paid based
on hourly basis while semi-skilled workers are paid on differential piecework basis with
guaranteed minimum wage of RM1,200 per month.

The following data is obtained from the company’s record of workers for the month of
November 2021.

Employee Type Working day Hours worked Unit Produced

Fahim Skill Monday to Friday 165 1,000
Saturday and Sunday 10 80
Zamri Skill Monday to Friday 170 1,092
Saturday and Sunday -nil- -nil-
Amir Semi- skill Monday to Friday 160 480
Saturday and Sunday 5 15

Additional information:

1. The normal working hours per month is 160 hours from Monday to Friday.

2. The basic hourly rate is RM15 per hours and the differential piecework rate is as below:

Rate per unit

Up to 100 units RM 2.00
101 – 200 units RM 2.50
201 – 400 units RM 3.00
Above 400 units RM 3.50

3. The overtime is paid at premium of 50% of normal basic rate for normal working days
and premium of 100% of basic rate for working days on Saturday and Sunday.

4. The standard time for output assembled is 10 minutes for skill workers and 20 minutes
for semi – skill workers.

5. Bonus is based on individual performance, and it is paid at 70% of time saved at the
basic hourly rate.

Required:
a. Compute the gross wages earned for each worker for the month of November 2021.
(Show clearly your computation for basic salary, overtime and bonus, if any)
(20 marks)

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b. Identify the following labour in the Hias Ria Sdn Bhd as direct or indirect labour

i. Production supervisor
ii. Cutting production worker
iii. Manager
iv. Cleaner
v. Assembly production worker
vi. Quality control staff
(3 marks)
(Total: 23 marks)

END OF QUESTION PAPER

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