Final Examination
Management accounting 1
Duration: 90 minutes
No material allowed
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Problem 1 (1.5 marks)
1. (0.75 marks)
Indirect material/LH = $126,000/21000LH = $6/LH
Electricity cost (at 55,000 LH) = 565000 – 55000*6 – 11000 = $224,000
Variable Electricity cost/LH = ($224,000 - $88,000)/(55,000 – 21,000) = $4/LH
Fixed Electricity cost = 224,000 – 55,000*4 = 4,000
y = 4,000 + 4x
2. (0.75 marks)
10 * 40,000 + 15,000 = 415,000
Problem 2 (1.5 marks)
1.
a. Dr Raw material 60,000
Cr Account Payable 60,000
b. Dr Work in process – Job 612 22,000
Dr Work in process – Job 613 18,000
Dr Work in process – Job 614 12,000
Cr Raw material 52,000
c. Dr Work in process – Job 612 32,000
Dr Work in process – Job 613 24,000
Dr Work in process – Job 614 16,000
Cr Wages payable 72,000
d. Dr Manufacturing overhead 35,000
Cr various payables account 35,000
e. Dr Work in process – Job 612 16,000
Dr Work in process – Job 613 12,000
Dr Work in process – Job 614 8,000
Cr Manufacturing overhead 36,000
f. Dr Finish goods – Job 612 70,000
Cr Work in process– Job 612 70,000
Dr Finish goods – Job 613 54,000
Cr Work in process– Job 613 124,000
g. Dr Account receivable 98,000 (40%*$70,000)
Cr Sales revenue 98,000
Dr Cost of goods sold 70,000
Cr Finish goods – Job 612 70,000
Dispose the under/overapplied MOH, given that under/overapplied MOH was material.
+ Estimated WIP (Job 614) = $36,000 22.5%
+ Estimated FG (Job 613) = $54,000 33.75%
+ Estimated COGS = $70,000 43.75%
Total estimated cost = $160,000
Over-applied MOH = $36,000 - $35,000 = $1,000 (material)
Dispose Over-applied MOH for:
+ WIP (Job 614) = 1,000*22.5% = $225
+ FG (Job 613) = 1,000*33.75% = $337.5
+ COGS (Job 612) = 1000 – 225- 337.5 = 437.5
Dr MOH 1,000
Cr WIP (Job 614) 225
Cr FG (Job 613) 337.5
Cr COGS (Job 612) 437.5
Problem 3 (2 marks)
Problem 4 (1.5 marks)
1. VC/unit = $14/u; CM/unit = $6/u
BEQ = 90,000/6 = 15,000 units
BER = 15,000 * $20 = 300,000
2. CM/u (new) = $4/u
The increase in CM = 27,000*$4 – 13,500*$6 = $27,000
The decrease in profit = $35,000 - $27,000 = $8,000
Problem 5 (2 marks)
1. (1 mark)
Cost base/unit = 90 + 30 + 20+ 10= $150/unit
% markup = ($100,000 + $60,000 + 20%*1,000,000)/(2,000*$150) = 120%
Price Quotation Sheet
Cost base/unit $150
Markup/unit (120%*150) 180
Selling price/unit 330
2. (1 mark)
Variable cost/unit 145
Opportunity cost/unit (300*($330 - $150)/500) 108
Fixed cost/unit ($4,000/500) 8
Minimum selling price/unit 261
Problem 6 (1.5 marks)
1. (0.75 mark)
Contribution margin lost....................................................................................$(756,000)
Segment salaries can be avoided ....................................................................... 656,000
Decrease in income ........................................................................................... (100,000)
Sophia should keep UA40
2. (0.75 mark)
Contribution margin lost......................................................................................$(750,000)
Segment salaries can be avoided ....................................................................... 850,000
Increase in income .............................................................................................. 100,000
Sophia should drop UA43
