Question 1
a. Briefly describe what is meant by enterprise risk management
(2 marks)
b. Explain the four steps in the planning and control cycle.
(5 marks)
c. Given the following information, calculate the company's manufacturing overhead:
| Work in process, ending................ | RM8,000 |
| Work in process, beginning........... | RM11,000 |
| Cost of goods manufactured........ | RM70,000 |
| Direct labor.................................... | RM25,000 |
| Direct materials............................. | RM20,000 |
Required :
Calculate the manufacturing overhead by using the Schedule of Cost of Goods Manufactured.
(6 marks)
d. Mei Corporation has provided the following partial listing of costs incurred during April:
RM
| Marketing salaries..................................... | 39,000 |
| Property taxes, factory............................. | 8,000 |
| Administrative travel.................................. | 102,000 |
| Sales commissions................................... | 73,000 |
| Indirect labor.............................................. | 31,000 |
| Direct materials......................................... | 197,000 |
| Advertising................................................. | 145,000 |
| Depreciation of production equipment...... | 39,000 |
| Direct labor................................................ | 78,000 |
Required :
(i) Calculate the total product cost listed above.
(4 marks)
(ii) Calculate the period cost for April
(3 marks)
[Total : 20 marks]
Question 2
a. List the three main categories of inventories in a manufacturing company.
(1.5 marks)
b. Explain the difference between a contribution approach income statement and a traditional approach income statement.
(4 marks)
c. Lala Brothers, Inc., used the high-low method to derive its cost formula for electrical power cost. According to the cost formula, the variable cost per unit of activity is RM3 per machine-hour. Total electrical power cost at the high level of activity was RM7,600 and at the low level of activity was RM7,300.
Required :
Calculate the low level of activity if the high level of activity was 1,200 machine hours.
(3.5 marks)
d. An income statement for Cerdik's Bookstore for the first quarter of the current year is presented below:
| Sales.......................................................... |
| RM800,000 |
| Cost of goods sold..................................... |
| 560,000 |
| Gross margin............................................. |
| RM240,000 |
| Selling and administrative expenses: |
|
|
| Selling..................................................... | RM98,000 |
|
| Administrative......................................... | 98,000 | 196,000 |
| Net operating income................................ |
| RM 44,000 |
On average, a book sells for RM50. Variable selling expenses are RM5.50 per book, with the remaining selling expenses being fixed. The variable administrative expenses are 3% of sales, with the remainder being fixed.
Required :
i. Calculate the contribution margin and net operating income for Cerdik's Bookstore for the first quarter by preparing the income statement using the contribution approach
(8 marks)
ii. State the cost formula for selling and administrative expenses with “X” equal to the number of books sold
(3 marks)
[Total : 20 marks]
Question 3
Wanz Company uses the weighted-average method in its process costing system.
Information for the month of May concerning Department A, the first stage of the company's
production process follows:
|
| Materials | Conversion |
| Work in process, beginning....................... | RM 4,000 | RM 3,000 |
| Current costs added.................................. | 20,000 | 16,000 |
| Total costs................................................. | RM24,000 | RM19,000 |
| Goods completed...................................... | 90,000 units | 90,000 units |
| Work in process, ending............................ | 10,000 units |
|
Material costs are added at the beginning of the process. The ending work in process is 50% complete with respect to conversion costs and 100 % complete for materials.
Required :
a. Calculate the equivalent units for May for the Department A
(5 marks)
b. Calculate the cost per equivalent units for May for the Department A
(7 marks)
c. Calculate the total cost of units transferred out to the next process in May
(5 marks)
d. Calculate the total cost of ending work in process inventory for May for the Department A.
(3 marks)
[Total : 20 marks]
Question 4
a. Define the meaning of;
i. budget
(1.5 marks)
ii. budgetary control
(1.5 marks)
b. Explain FOUR (4) of the major benefits to be gained from budgeting.
(8 marks)
c. All of Gemilang Company's sales are on account. 35 % of the credit sales are collected in the month of sale, 45% in the month following sale, and the rest are collected in the second month following sale. Bad debts are negligible and should be ignored. The following are budgeted sales data for the company:
|
| January | February | March | April |
| Total sales (RM).... | 50,000 | 60,000 | 40,000 | 30,000 |
Required :
Calculate the amount of cash that should be collected in March
(4 marks)
d. Garry Manufacturing Corporation's most recent production budget indicates the following required production:
|
| October | November | December |
| Required production (units)........ | 210,000 | 175,000 | 110,000 |
Each unit of finished product requires 5 pounds of raw materials. The company maintains raw materials inventory equal to 25% of the next month's expected production needs.
Required :
Calculate the weight of raw material (pounds) that Garry should plan to purchase for the month of November.
(5 marks)
[Total : 20 marks]
Question 5
a. Abdi Company, which has only one product, has provided the following data concerning its most recent month of operations:
| Selling price............................................... | RM81 |
|
|
|
| Units in beginning inventory...................... | 0 |
| Units produced.......................................... | 7,300 |
| Units sold................................................... | 7,000 |
| Units in ending inventory........................... | 300 |
|
|
|
| Variable costs per unit: |
|
| Direct materials...................................... | RM20 |
| Direct labor............................................. | RM30 |
| Variable manufacturing overhead.......... | RM7 |
| Variable selling and administrative......... | RM11 |
|
|
|
| Fixed costs: |
|
| Fixed manufacturing overhead.............. | RM65,700 |
| Fixed selling and administrative............. | RM21,000 |
Required :
i. Calculate the unit product cost for the month under variable costing.
(2 marks)
ii. Calculate the unit product cost for the month under absorption costing
(3 marks)
b. A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:
| Selling price............................................... | RM123 |
|
|
|
| Units in beginning inventory...................... | 0 |
| Units produced.......................................... | 1,000 |
| Units sold................................................... | 900 |
| Units in ending inventory........................... | 100 |
|
|
|
| Variable costs per unit: |
|
| Direct materials...................................... | RM41 |
| Direct labor............................................. | RM26 |
| Variable manufacturing overhead.......... | RM4 |
| Variable selling and administrative......... | RM6 |
|
|
|
| Fixed costs: |
|
| Fixed manufacturing overhead.............. | RM17,000 |
| Fixed selling and administrative............. | RM11,700 |
Required :
Prepare the income statement for the month using the variable costing.
(9 marks)
c. The following standards for variable manufacturing overhead have been established for a company that makes only one product:
| Standard hours per unit of output........ | 1.2 | hours |
| Standard variable overhead rate......... | RM10.20 | per hour |
The following data pertain to operations for the last month:
| Actual hours.............................................. | 5,000 | hours |
| Actual total variable overhead cost........... | RM52,750 |
|
| Actual output............................................. | 4,000 | units |
Required :
Calculate variable overhead efficiency variance for the month
(3 marks)
d. The following materials standards have been established for a particular product:
| Standard quantity per unit of output.......... | 2.8 grams |
| Standard price........................................... | RM12.50 per gram |
The following data pertain to operations concerning the product for the last month:
| Actual materials purchased....................... | 6,200 grams |
| Actual cost of materials purchased........... | RM81,530 |
| Actual materials used in production.......... | 5,700 grams |
| Actual output............................................. | 1,800 units |
Required :
Calculate the materials price variance for the month.
(3 marks)
[Total : 20 marks]
END OF QUESTIONS
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