CONFIDENTIAL BY ACIJUN 2019/MAF201 UNIVERSITI TEKNOLOGI MARA FINAL EXAMINATION COURSE COST AND MANAGEMENT ACCOUNTING 1 COURSE CODE MAF201 EXAMINATION JUNE 2019 TIME 3 HOURS INSTRUCTIONS TO CANDIDATES, 1 This question paper consists of five (5) 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 examination pack consists of ') the Question Paper ji) an Answer Booklet — provided by the Faculty/Campus 5. Answer ALL questions in English. DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO This examination paper consists of 7 printed pages © Hak Cipta Universiti Teknologi MARA CONFIDENTIAL,CONFIDENTIAL 2 ACIJUN 2019/MAF201 QUESTION 1 Sinar Baru Construction Sdn Bhd has been awarded a project by Smart Nursery to construct, a nursery building in Bandar Gemilang at a contact price of RM3,000,000. The construction started in early September 2018 and is expected to be completed by August 2020. The information related to the construction work for the year ended 30 June 2019 is as follows: 1, Material worth RM520,000 has been purchased direct from supplier, RM200,000 ‘acquired from central store and RM30,000 has been transferred from another site. The company has retumed RM15,000 of the materials to the supplier, and at the end of the period there was RM32,000 of unused material remained at site. 2. The company has paid RM78,000 for direct labour and RM22,000 for indirect labour. At the end of the period, the payroll staff has informed that the outstanding amount of direct labour cost is RM12,000, while RM800 of indirect labour cost has been paid in advance. 3. Plant_and equipment have been purchased and brought to site at a cost of RM1,500,000. It is the policy of the company to depreciate the non-current assets at 20%, using straight line method monthly basis. 4. RM36,500 of direct expenses has been paid by the company. Overheads for the contract was absorbed based on 2% of total materials used. 5. The monthly subcontractor charges were RM20,000, and the company has paid F2M240,000 (one-year charges) to the subcontractor. 6. According to the project manager, the future cost to complete the project will be RM815,240. 7. Value of work certified by the architect was RM1,800,000 and Smart Nursery has paid Sinar Baru Construction with the amount which is subjected to a 10% retention. 8 The company uses input (cost) method in recognizing the revenue of the project. Required: a. Prepare the following for the period ended 30 June 2019: i. Construction in Process Account i, —_Contractee Account (12 marks) b. Define the following terms: ‘Subcontractor Architect Certificate (3 marks) (Total: 15 marks) © Hak Cipta Universiti Teknologi MARA CONFIDENTIAL,CONFIDENTIAL 3 ACIJUN 2019/MAF201 QUESTION 2 EZ Cooking Sdn Bhd is a manufacturing company that produces a special paste known as “instant Magic Paste”. The product is marketed throughout the country and the demand for the product keeps increasing. The production of the product passes through two processes known as Mixing and Finishing, The following information relates to the production of “Instant Magic Paste” for the month of May 2019. Mixing Process Material = 6,500 kg at a total cost of RM41,500 Direct labour - RM15,400 Production overheads - RM4,590 Normal loss = 6% of total input, with a scrap value of RM1.00 per kg. Actual output = 6,120 kgs Finishing Process Material = 680 kg at a total cost of RM19,800 Labour = RM16,250 Overhead - RM6,260 Opening Work in Progress - 200 kgs at a total cost of RM2,800 Closing Work in Progress = 1,000 kgs Degree of completion for both opening and closing work in progress are as follows: ‘Opening Work in Progress _| Closing Work in Progress From previous process 100% I 100% Material 100% 80% Labour 50% 60% ‘Overheads 70% 40% Normal loss for Finishing Process is expected to be 4% of total input and they can be sold at RM2.00 per kg. Actual losses recorded were 300 kgs. Required: a. Prepare Mixing Process Account for the month of May 2019. (6 marks) b. Prepare Finishing Process Account with relevant statements for the month of May 2019. (15 marks) c. Define the following terms: i. Joint product ii, By-product (4 marks) © Hak Cipta Universiti Teknologi MARA CONFIDENTIALCONFIDENTIAL 4 ACIJUN 2019/MAF201 d. Classify the following items into normal loss or abnormal loss. i Evaporation of material during process Loss due to inefficient working of new employees Unexpected defect of material iv, Unavoidable loss of material (2 marks) (Total: 27 marks) QUESTION 3 Star Cookware Sdn Bhd produces limited-edition stainless-steel wok which is sold to restaurants and other users. Each wok is sold at RM89 per unit and the budgeted normal production per month is 3,750 units. The cost information relates to the product is as follows: Variable cost per unit: RM Direct material 15.00 Direct labour 14.00 Variable production overhead 7.00 Variable selling overhead 2.00 Budgeted fixed cost per month RM Fixed factory overhead 45,000 Fixed selling and distribution overhead 5,000 Fixed administrative overhead 10,000 Fixed production overhead is to be absorbed to the product based on normal production units. For the month of April 2019, the units produced and sold were 4,000 and 3,500 respectively. There were 500 units of wok in store on 31% March 2019. All fixed costs were incurred as per budgeted, Required: a. Prepare the Statement of Profit or Loss for the month of April 2019 using: i. The Marginal Costing Approach ii, The Absorption Costing Approach (10 marks) b. Reconcile the difference in profits derived from the two approaches. (2 marks) ¢. Identify TWO (2) situations where the net profit of absorption costing and marginal costing will be different. (2 marks) (Total: 14 marks) ‘© Hak Cipta Universiti Teknologi MARA, CONFIDENTIALCONFIDENTIAL 5 ‘ACIJUN 2019/MAF201 QUESTION 4 Rara Curtain Sdn Bhd is currently producing and selling one type curtain known as Roller Blinds. The following data relates to the current sales and production of 40,000 units of Roller Blinds: RM RM Sales 4,320,000 Production cost: Direct material 220,000 Direct labour 208,000 Variable production overhead 88,000 Fixed production overhead 74,400 590,400 Non-production cost: Variable selling and distribution 104,000 Fixed selling and distribution 39,600 Fixed administration 8,760_ 152,360 Net Profit 577,240 Require (Each question is to be treated independently) a. Classify the cost into: Total variable cost per unit ji, Total fixed cost for the year (4 marks) b. _Using the above information, calculate the following: i. The breakeven points (in unit and RM) il. The margin of safety (in unit and RM) ili, Units to be sold by the company if the desired net profit is to be 10% higher from the current net profit. (6 marks) c. The company estimated that the direct labour cost per unit will increase by 10% and fixed selling and distribution expenses will increase to RM40,000. Required: Predict the selling price needs to be set for Roller Blinds if the company wish to maintain the current net profit and current sales volume. (4 marks) (© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL,CONFIDENTIAL 6 ACIJUN 2019/MAF201 ‘The manager of the company is proposing to produce and sell two (2) new types of blinds, Bamboo Blinds and Wooden Blinds in addition to the current production in order to improve its performance. The projected information related to the new proposed products are as follows: Product Sales unit | Selling price | Variable cost per unit Bamboo Blinds | __ 25,600 RM25.00 RM13.00 ‘Wooden Blinds | 14,400 RM34.00 | RM19.00 The total fixed cost for the company will increase by RM120,000 if the two products are being produced and sold. Required: Advise whether the company should proceed with the proposal to produce and sell the three types of blinds, or maintain with the current operation. Your advice should be based on the net profit comparison. (6 marks) Outline FOUR (4) advantages of cost volume profit analysis for the company. (4 marks) (Total: 24 marks) QUESTION 5 MyChoice Sdn Bhd is a wholesale frozen tempura chicken nuggets distributor, and in the process of preparing its cash budget for the fourth quarter from October to December 2019. The following table presents the information on budgeted monthly sales and production activities of the company: ‘Aug | Sept | Oct | Nov | Dec | Jan 2019 2019 2019 2019 2019 2020 Sales and production units |" 14,000_| 12,000 | 11,000 | 13,000 | 15,000 | 16,000 ‘Selling price/unit (RM) 12. 14 16 20 24 26 Direct material cost (RM) | 44,000 | 48,200 | 50,800 | 53,600 | 57,000 | 60,100 Direct labour cost (RM) 52,100 _| 53,500 | 66,700 | 58,800 | 60,200 | 63,400 1 2. Opening cash balance for the fourth quarter is an overdraft of RM12,000. Term of sales: 30% will be in cash and the remaining will be in credit. The collection of debts: 60% of the credit sales are collected one month after sales and the remaining credit sales will take an additional month's credit. All materials will be purchased in credit. 40% of the purchases will be paid in the month of purchase and the remaining balance will be paid one month after purchase. Wages are paid in the month which they are incurred. © Hak Cipta Universiti Teknologi MARA CONFIDENTIALCONFIDENTIAL 7 ACIJUN 2019/MAF201 5. Variable overhead is RM3.60 per unit produced. 2/3 of the variable overhead will be paid in the month incurred and the balance is payable one month in arrear. 6. Monthly fixed overhead are expected to be RM15,000 (inclusive RM4,000 depreciation expenses of machinery) and is paid in the month they are incurred. 7. Advertising cost of RM5,000 will be paid in December 2019. 8. Amotor van with a carrying value of RM8,000 is expected to be sold in October for a profit of RM2,000. Required: a. State FOUR (4) purposes of preparing a budget. (4 marks) b. Prepare the monthly Cash Budget for MyChoice Sdn Bhd for the fourth quarter of 2019, (16 marks) (Total: 20 marks) END OF QUESTION PAPER (© Hak Cipta Universit! Teknolog! MARA CONFIDENTIAL