Question 1
a. A number of companies in different industries are listed below:
1. Electric utility
2. Frozen orange juice processor
3. Specialty coffee roaster (roasts small batches of specialty coffee beans)
4. Natural gas production company
5. Commercial photographer
6. Contract oil drilling company
Required:
For each company, indicate whether the company is most likely to use job-order costing or process costing.
(3 marks)
b. Mat Company's actual manufacturing overhead cost for the month ended March 31 was RM78,000. The company's predetermined overhead rate was 50% of direct labor cost. Other information pertaining to Mat Company's inventories and production for the month of March is as follows:
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| Beginning inventories, March 1 |
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| Direct materials.................................................. | RM20,000 |
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| Work in process................................................. | RM40,000 |
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| Finished goods................................................... | RM102,000 |
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| Purchases of direct materials during March......... | RM110,000 |
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| Direct labor cost.................................................... | RM160,000 |
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| Ending inventories, March 31 |
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| Direct materials.................................................. | RM26,000 |
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| Work in process................................................. | RM36,000 |
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| Finished goods................................................... | RM105,000 |
Required :
(i) Determine the amount of direct materials used during March.
(3 marks)
(ii) Determine the underapplied or overapplied overhead for the month.
(2 marks)
(iii) Determine the Cost of Goods Manufactured for the month.
(5 marks)
c. Parker Company uses a job-order costing system and applies manufacturing overhead to jobs using a predetermined overhead rate based on direct labor-hours. Last year manufacturing overhead and direct labor-hours were estimated at RM50,000 and 20,000 hours, respectively, for the year. In June, Job #461 was completed. Materials costs on the job totaled RM4,000 and labor costs totaled RM1,500 at RM5 per hour. At the end of the year, it was determined that the company worked 24,000 direct labor-hours for the year and incurred RM54,000 in actual manufacturing overhead costs.
Required :
i. Job #461 contained 100 units. Determine the unit cost that would appear on the job cost sheet.
(2.5 marks)
ii. Determine the underapplied or overapplied overhead for the year.
(4.5 marks)
[Total : 20 marks]
Question 2
a. Biah Inc. produces and sells two products. Data concerning those products for the most recent month appear below:
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| Product W07C | Product B29Z |
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| Sales.................................. | RM25,000 | RM27,000 |
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| Variable expenses............. | RM7,000 | RM8,600 |
Fixed expenses for the entire company were RM32,860.
Required :
Determine the overall break-even point (in units and Ringgit) for the company.
(8 marks)
b. Leha Company, which has only one product, has provided the following data concerning its most recent month of operations:
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| Selling price............................................... | RM112 |
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| Units in beginning inventory...................... | 500 |
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| Units produced.......................................... | 2,600 |
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| Units sold................................................... | 3,000 |
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| Units in ending inventory........................... | 100 |
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| Variable costs per unit: |
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| Direct materials...................................... | RM13 |
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| Direct labor............................................. | RM49 |
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| Variable manufacturing overhead.......... | RM6 |
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| Variable selling and administrative......... | RM10 |
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| Fixed costs: |
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| Fixed manufacturing overhead.............. | RM80,600 |
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| Fixed selling and administrative............. | RM15,000 |
The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month.
Required :
(i) Determine the unit product cost for the month under variable costing.
(2marks)
(ii) Prepare an income statement for the month using the contribution format and the variable costing method.
(10 marks)
[Total : 20 marks]
Question 3
a. Indah Corporation is a wholesaler of industrial goods. Data regarding the store's operations follow:
· Sales are budgeted at RM390,000 for November, RM360,000 for December, and RM340,000 for January.
· Collections are expected to be 85% in the month of sale, 10% in the month following the sale, and 5% uncollectible.
· The cost of goods sold is 80% of sales.
· The company purchases 40% of its merchandise in the month prior to the month of sale and 60% in the month of sale. Payment for merchandise is made in the month following the purchase.
· The November beginning balance in the accounts receivable account is RM77,000.
· The November beginning balance in the accounts payable account is RM320,000.
Required :
i. Prepare a Schedule of Expected Cash Collections for November and December.
(6 marks)
ii. Prepare a Merchandise Purchases Budget for November and December.
(9 marks)
b. The manufacturing overhead budget of Rina Corporation is based on budgeted direct labor-hours. The February direct labor budget indicates that 5,800 direct labor-hours will be required in that month. The variable overhead rate is RM4.60 per direct labor-hour. The company's budgeted fixed manufacturing overhead is RM82,360 per month, which includes depreciation of RM16,820. All other fixed manufacturing overhead costs represent current cash flows.
Required :
i. Determine the cash disbursement for manufacturing overhead for February.
(3.5 marks)
ii. Determine the predetermined overhead rate for February.
(1.5 marks)
[Total : 20 marks]
Question 4
a. Cambi Company has a process costing system in which the weighted-average method is used. The company adds all materials at the beginning of the process in the Molding Department, which is the first of two stages of its production process. Information concerning the materials used in the Molding Department during March is as follows:
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| Units | Materials Costs |
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| Work in process on March 1........................................... | 22,000 | RM11,000 |
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| Units started during March.............................................. | 90,000 | RM46,120 |
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| Units completed and transferred to next department during March................................................................ | 97,000
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|
Required :
Determine the materials cost of the work in process inventory at March 31.
(10 marks)
b. Jijan Company has a process costing system in which it uses the weighted-average method. The equivalent units for conversion costs for the month were 47,500 units. The beginning work in process inventory consisted of 15,000 units, 60% complete with respect to conversion costs. The ending work in process inventory consisted of 10,000 units, 75% complete with respect to conversion costs.
Required :
Determine the number of units started during the month was:
(10 marks)
[Total : 20 marks]
Question 5
Wak Joko Company, which has only one product, has provided the following data
concerning its most recent month of operations:
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| Selling price............................................... | RM140 |
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| Units in beginning inventory...................... | 300 |
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| Units produced.......................................... | 4,300 |
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| Units sold................................................... | 4,500 |
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| Units in ending inventory........................... | 100 |
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| Variable costs per unit: |
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| Direct materials...................................... | RM25 |
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| Direct labor............................................. | RM51 |
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| Variable manufacturing overhead.......... | RM7 |
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| Variable selling and administrative......... | RM6 |
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| Fixed costs: |
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| Fixed manufacturing overhead.............. | RM150,500 |
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| Fixed selling and administrative............. | RM72,000 |
The company produces the same number of units every month, although the sales in units
vary from month to month. The company's variable costs per unit and total fixed costs have
been constant from month to month.
Required :
a. Prepare an income statement for the month using the contribution format and the variable costing method.
( 11 marks)
b. Prepare an income statement for the month using the absorption costing method.
( 9 marks)
[Total : 20 marks]
END OF QUESTIONS
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