CONFIDENTIAL AC110/TEST1 MAY2021/MAF151

UNIVERSITI TEKNOLOGI MARA

COMMON TEST 1

COURSE : FUNDAMENTALS OF COST ACCOUNTING

COURSE CODE : MAF151
DATE : 29 MAY 2021
TIME : 1 HOUR 30 MINUTES

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of THREE (3) PARTS.

2. Answer ALL questions.

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A. Multiple Choice Questions. (19 marks)

1. All of the Following is related to the objective of cost accounting EXCEPT

A. Determination of cost
B. Ascertainment of cost
C. Assessment of cost
D. Controlling of cost

2. __________ is relates to the cost of converting the raw material until being
produced as finished goods.

A. Administrative cost
B. Delivery cost
C. Financial cost
D. Production cost

3. All of the following are cost accounting users, EXCEPT.

A. Manager
B. Owner
C. Lenders
D. Supervisors

4. The cost that paid to the designer of new model for car passenger in Toyota
Company is known as __________.
A. Direct labour cost
B. Direct expenses
C. Indirect labour cost
D. Indirect expenses

5. __________ still to be incurred even though activity level is zero or production

activity is not performed.
A. Fixed Cost
B. Mixed cost
C. Step cost
D. Variable Cost

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6. __________ is the breakdown of business into a section or department where

costs can be collected, accumulated and charged.
A. Profit c entres
B. Revenue centres
C. Cost centres
D. Investment centres

7. __________ is responsible to manage and make decision on the use of working

capital and other assets of the company.
A. Profit centres
B. Revenue centres
C. Cost centres
D. Investment centres

8. ____________ is amount of expenditure or expenses incurred to specific thing to

produce or to render service.
A. Cost
B. Expenses
C. Expenditure
D. Overhead

9. All the following are the documents required for purchasing materials EXCEPT.
A. Purchase requisition notes
B. Purchase order
C. Inspection notes
D. Payroll records

10. All of the following are the features of the JIT System, EXCEPT.

A. Zero inventory held.

B. Zero breakdown
C. Zero cost
D. Non- of the above

11. ___________________ is the level at which the stock is allowed to fall before an
order for stock replenishment is placed.

A. Re-order level
B. Re-order quantity
C. Minimum stock level
D. Maximum stock level

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12. All of the following are direct material for wooden modern furniture company
EXCEPT.

A. Wood paint
B. plywood
C. Varnish
D. Furniture glue

13. All the following are the assumption of EOQ Model EXCEPT.

A. Cost of ordering remain constant.

B. Demand for the year is known.
C. Lead time is not fluctuating.
D. Purchase cost is fluctuating.

14. ______________________ is a system where items are verified on a yearly basis

normally taken near the end of accounting period.

A. Periodic stocktaking
B. Continuous stocktaking
C. Perpetual inventory system
D. Monthly stocktaking

15. All of the following are the examples of carrying or holding cost, EXCEPT.

A. Transportation cost
B. Depreciation on store cabinets
C. Storekeeper salary
D. Storages charges

16. Bin card is used to record the movements of materials in store. Below is the
information recorded in the bin card EXECPT.

A. Quantity of materials received.

B. Quantity of materials issued.
C. Quantity of materials balance
D. Amount value of materials.

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17. All of the following are covered under the scope of material controls system,
EXCEPT.

A. Procurement procedures of materials

B. Investment and control of materials
C. Issuing and pricing of materials
D. Selling and marketing of finished materials

18. Under ________ method, the closing stock is valued at the latest purchase price.

A. First in first Out

B. Last in first Out
C. Simple average method
D. Weighted average method

19. Overstocking occur when.

A. Materials in store is below the maximum level

B. Materials in store is equal to the minimum level
C. Materials in store is above the maximum level
D. Materials in store is equal to the maximum level

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B. State whether the following statement is TRUE or FALSE. (13 Marks)

1. In the cost statement all direct costs are known as Prime cost.

2. Administration cost relates to the cost of controlling the operation, giving

direction and formulating policy.

3. Examples of selling cost are promotion cost, advertising cost and innovation
cost.

4. Step cost is expense incurred that varies directly with changes in the volume
of a cost object.

5. All non-production cost like finance cost, administration cost and marketing
cost are normally treated as period costs.

6. Store ledger card is used to update each transaction involving material and
overhead.

7. Mixing, cooking, and packaging departments are the examples of service cost
centers in a textile industry.

8. Manager of Profit Centre is responsible to manage both revenues and

expenses of the company.

9. Material requisition note used by production department to request materials

from store department.

10. The JIT system focuses on reducing or eliminating inventory holding and non-
value-added costs.

11. Lead time is the period between placing an order by the company and
receiving the materials from supplier.

12. ROQ is a calculated order quantity to minimize the total ordering and carrying
costs.

13. The receipt of goods will be acknowledged by the Receiving Department by

issuing the GRN to inspection department.

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C. Structure Questions

QUESTION 1

ASD Bhd is a company producing Special Raya Cookies, known “Kitwa”. The
information below is related to the production of “Kitwa” for the month of April 2021.

Costs RM
Utility bills 3,000
Manager’s salary 8,500
Delivery expenses 2,000
Wages for supervisors 9,300
Wages for baker 5,700
Special flour and flavour 23,500
Depreciation on equipment 5,000

Required:

Prepare the statement of cost showing the total prime cost, total production cost and
total cost.

(6 marks)

QUESTION 2

State One (1) cost unit in the following business entities.

No. Business entities Cost Unit

1. Popular Tuition Centre
2. Sabah Air Aviation Sdn Bhd
3. The Magellan Sutera Resort
4. Central Sugars Refinery Sdn. Bhd.

(2 marks)

QUESTION 3

SS Global Network is a well-known company distributing professional microphone set,

known as “MICPhone” in Malaysia. The average demand for the “MICPhone” is
estimated 500,000 sets every month. The minimum and maximum consumption is
50,000 and 100,000 sets per week, respectively. Shipment from Taiwan is expected to
be between one to three weeks from the ordering date. The re-order quantity or the most
economic quantity order is 300,000 sets.

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Required:

Calculate the following:

i) Re-order level
ii) Maximum stock level
iii) Minimum stock level
iv) Average stock level
(4 marks)

QUESTION 4

AU Berhad is a manufacturing company producing cement. The following are the

company records for the month of April 2021 related to Materials “BH” used in the making
of cement. As at 1 April 2021 the records showed that there is a balance of 8,500 units
of “BH” at a price of RM11 per unit.

Purchases Issues
Date Units RM Date Units

April 2 2,000 23,000 April 8 9,700

13 7,500 90,000 25 6,800

Additional information:

i) On 28 April 2021, 500 units of BH purchase on 13 April 2021 were returned to

the supplier due to damaged.

ii) Physical stock count on 30 April 2021 revealed a balance of 800 units of BH.

Required:

Prepare the store ledger card using method that will show highest profit.

(6 marks)

(Total mark: 50 marks)

END OF QUESTION PAPER

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