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INSTRUCTIONS: 1. THERE ARE SIX (6) QUESTIONS IN THIS PAPER. 2. ANSWER ALL QUESTIONS.
You have just been appointed as the new management accountant for Sedili Resort, a new hotel in Johor. The hotel consists of 2 restaurants, 2 souvenir shops (which are leased to tenants), a gymnasium and 150 bedrooms. The hotel will not be opened for another six months but consultants have been engaged to design the new management accounting systems.
Clearly outline your role as a management accountant in Sedili Resort. [5 marks]
As a management accountant, how would you contribute to the design and operation of the new management accounting system? Explain. [7 marks]
Identify the types of management accounting information that you believe managers would require on a regular basis (e.g. weekly or monthly) to manage the operations of the resort. Consider both financial and non-financial information. [8 marks]
[TOTAL: 20 MARKS]
000 per month plus RM0. (Use the form Y = a + bX. • i) Classify each cost as variable. Supervisory salaries total RM23.BMAC5203/SEPT 2007-F/SA Question 2 a.25 per kg of sausage produced. Lamri Meat Company produces one of the best sausage products in Klang Valley. The company's controller compiled the following information by analysing the accounting records: • • • • Meat costs the company RM3. where X denotes the quantity of sausage produced. [3 marks] ii) Write a formula to express the behaviour of the firm's production costs.25 per kg of sausage produced.35 per kg of sausage produced.400 per month. Insurance and property taxes average RM6. fixed or semi variable.000 per month.) [9 marks] 2 . Wages of production employees is RM2. The company incurs utility costs of RM9.
i) What is the break-even point in units for 2007? [3 marks] ii) Puan Athirah believes that to attain the sales target in the year 2008.000 for advertising in 2008.000 RM70.BMAC5203/SEPT 2007-F/SA b.00 (20.00 Puan Athirah has set the sales target for the year 2008 at a level of RM550.000? [5 marks] 3 .00 RM 4.000 filters). Puan Athirah believes that an aggressive campaign is needed next year. Selasih.000 (22.000 RM500.00 RM15.000 RM135.000 RM 25.00 RM 3. Presented below is the data for year 2007. Selasih Company manufactures water filter for housing use.000 RM40. Cost Schedules Variable costs Direct labour per filter Direct materials Variable Overhead Variable costs per filter Fixed costs Manufacturing Selling Administrative Total Fixed Costs Selling price per filter Expected filters) sales. due to increased competition in local market.J.J. 2008 RM25. What will be the break-even point in dollar sales for 2008 if the company spends the additional RM10. for use in next year’s advertising campaign. the company must incur an additional selling expense of RM10. Owner of H. H.000 RM 8. with all other costs remaining constant.
[5 marks] [TOTAL: 25 MARKS] 4 .BMAC5203/SEPT 2007-F/SA iii) “Break-even analysis is of limited use to management because a company cannot survive by just breaking even.” Do you agree with the above statement? Explain.
000 The plant manager has heard of a new way of applying overhead that uses cost pools and cost drivers. The three categories and the expected overhead costs for each category for next year are as follows: Maintenance Materials handling Inspection RM205.000 5 .000 100 120 4.000 RM125.000 RM105.BMAC5203/SEPT 2007-F/SA Question 3 Tanjung Puteri Manufacturing has three categories of overhead. Expected activity for the three activity based cost drivers that would be used for the three categories of overhead are as follows: Direct materials Direct labour (8. Expected activity for the three activity-based cost drivers that would be used are as follows: Machine hours Material moves Quality inspections 60.000 20. overhead is applied using a predetermined overhead rate based upon budgeted direct labour hours.000 Currently.000 12. For next year.000 RM12. 100. The plant manager feels that obtaining this job would result in new business in future years.000 hours) Number of materials moves Number of inspections Number of machine hours RM15. The company is proposing a job and wanted to know the cost of the job.000 direct labour hours are budgeted.
[8 marks] c. [6 marks] [TOTAL: 20 MARKS] 6 . Do you agree activity-based costing systems yield more accurate product costs than conventional systems? Explain. calculate the total cost of the proposed job.BMAC5203/SEPT 2007-F/SA a. If Tanjung Puteri used activity-based cost drivers to assign overhead. Give comments on the cost of the proposed job calculated in (a) and (b). calculate the total cost of the proposed job. If Tanjung Puteri Manufacturing used direct labour hours as the cost driver. [6 marks] b.
000 metres of leather at RM65.850 hours in stitching at RM21.75 hour in stitching process @RM20 per hour RM25.50 per metre.5 metre of leather @ RM62 per metre RM31.50 per hour.280 of leather at RM65. Used 1.BMAC5203/SEPT 2007-F/SA Question 4 In September 2007. The standard cost for producing the boots are as follows: Direct Material 0. [5 marks] 7 . • • • • a. Used 2. [5 marks] ii) Labour rate and efficiency variances and indicate whether it is favourable or unfavourable. Calculate i) Materials price and usage variances and indicate whether it is favourable or unfavourable.10 per hour.00 Actual costs for direct material and labour incurred in September are as follows: Purchased 5.50 per metre.00 RM40.200 hours of direct labour in leather forming at RM25.00 Direct Labour 1 hour in leather forming process @RM25 per hour 0. Used 1. Andalas Enterprise produced 2.00 RM15.500 pairs of leather boots.
The marketing manager of Santai. by the time it was found. and an unfavourable labour efficiency variance. should the production manager be penalised for poor performance? Keep in mind that a production manager is generally in a very good position to control material usage and labour efficiency. The manager filed the necessary paperwork with the production department. accepted a rush order for a nonstock item from a valued customer. as was the usual case.. appeared on the production manager's performance report for the period just ended. A new supplier was located that quoted a very attractive price. i) Given that the company uses a responsibility accounting system.BMAC5203/SEPT 2007-F/SA b. Inc. and a production manager did the same with purchasing for needed raw materials. [5 marks] [TOTAL: 15 MARKS] 8 . thus giving rise to a favourable materials price variance. an unfavourable materials quantity variance. a purchasing clerk temporarily lost the paperwork. Unfortunately. The materials soon arrived and were found to be of poor quality. These latter two variances. it was too late to order from Santai’s regular supplier.
Based on this computation.000 Metal RM600. [5 marks] [TOTAL: 10 MARKS] 9 .800. Compute the ROI for each division. metal and mining operations throughout Malaysia. [5 marks] b.000 RM80.000. Compute the residual income for each division. Which division is the best performer? Explain. Data for the three divisions are as follows: Division Shipping Average operating assets Revenue Net operating income RM3.BMAC5203/SEPT 2007-F/SA Question 5 Badang Berhad is a large integrated company with shipping.000 RM180. Suppose the minimum required rate of return is 10 percent.600.000 RM1.000 Mining RM800.000 a.000 RM8.000. which division is the best performer? Explain.000 RM1.000 RM126.
Assume that 70% of construction overhead is fixed. how much should he be willing to accept for the home? Why? [3 marks] [TOTAL: 10 MARKS] QUESTION PAPER ENDS HERE 10 .000 RM 35. a.000 RM 410. If Teratai has more business than he can handle. producing a bid price of RM483. derived as follows: Land Construction materials Subcontractor labour costs RM 80.800 (RM410. Teratai was approached not too long ago by a client about a potential project. In this client's case the profit margin amounted to RM73. and he submitted a bid of RM483. computed on the basis of total cost. Should Teratai accept the client's offer? Why? [7 marks] b.800.000 Teratai adds an 18% profit margin to all jobs.BMAC5203/SEPT 2007-F/SA Question 6 Teratai Home builds custom homes in Pajam.000.000 x 18%).000 Construction overhead Allocated corporate overhead Total cost RM 75. Suppose that business is presently very slow.000 RM 100.000 RM 120. and the client countered with an offer on this home of RM390.800.000 RM 300.
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