1. (a)Describe any three ethical requirements of a management accountant.
2. (3 marks)
3. (b)Tasty Juice Uganda (TJU) located in 'downtown' Kampala city is the leading producer of fruit juice in central region. TJU buys a variety of fruits from Owino market, such as: oranges, pineapples and mangoes which are supplied directly to TJU's store. The fruits are then processed, packed in different brands and dispatched to shops and supermarkets.
4. On 31 March, 2019 the stores ledger card showed 350 kg of fruits in the store valued at Shs 4,500 per kg. The company uses the first in first out (FIFO) method to value the inventory of raw materials.
5. The following information relates to the fruits received and issued during the month of April2019:

Required:

Prepare TJU's stores ledger account and determine the:

1. (i)value of closing stock as at 30 April, 2019. (14 marks)
2. (ii)direct material cost charged to production. (1 mark)

(c) Explain any two merits of the piece rate method of remuneration.

(2marks) (Total 20 marks)

Question 3

1. (a)Distinguish between relevant costs and irrelevant costs. (4 marks)
2. (b)Myhygien Ltd, is a manufacturing firm dealing in house cleaning materials. The squeezer, one of the pioneer products had made a loss at the end of the year. The managing director in the finance meeting proposed to drop
3. the squeezer and discontinue it from operations.
4. Below is an extract of their profit statement per unit for the year ended 31 December, 2018:

(i)Advise the management of Myhygien Ltd whether or not to discontinue the squeezer.

(12 marks)

(ii)Identify any four qualitative factors that should be considered when

taking a decision in

(b) (i) above.

Particulars

Toilet brush

Squeezer

Scrubbing brush

Shs

Shs

Shs

Selling price

5,400

7,500

13,800

Raw materials

(2,550)

(4,200)

(7,800)

Wages

(900)

(1,650)

(1,800)

Directly chargeableexpenses

(900)

(900)

(1,450)

Selling &distributionexpenses

(270)

(375)

(690)

Fixed costs

(375)

(675)

(1,095)

Profit/ (loss)

405

(300)

965

Total units sold were:

There was no opening and closing inventory at the year end. The cost of closing the production line, if any, is Shs 27 million.

Required:

Toilet brush

76,000

Squeezer

85,000

Scrubbing brush

61,000

Question 4

(a) (b)

Explain any three procedures for batch costing. (3 marks) Anyomo Tea Factory (ATF)located in Southern Uganda deals in tea processing.ATF buys fresh tea leaves from the local farmers and processes it into fine consumable tea product called 'Anyo Tea Bags'. The fresh tea leavesgo through 3 distinct processes before the final product is ready for the market. Output from Process 1 becomes the input inProcess 2.

The following information relates to Process 2 for the month of February, 2019:

Closing work-in-progressis 1,000 kg and the degree of completion is as follows:

Required:

Prepare Process 2 account for the month. (8 marks) Awololo Enterprises Ltd deals in coffee processing. The shareholders are mainly indigenous coffee farmers in Eastern Uganda. During their last general meeting the shareholders were worried of drought that has affected the harvest. One of the shareholders suggested that they should produceat least at breakeven point.

The sales and profit figures for 2017 and 2018were as follows:

(c) Opening inventory

Nil

Input materials from Process 1

5,000 kg

Input costs:

Shs '000'

Materials from Process 1

16,000

Materials added in Process 2

7,000

Conversion costs

5,000

Process 1 material

100%

Materials added

60%

Conversion costs

40%

2017

2018

Shs '000'

Shs '000'

Sales

600,000

650,000

Profit

70,000

90,000

Required:

Advise the general meetingof Awololo Enterprises Ltd on:

1. (i)break-even point (in sales).
2. (ii)margin of safety.

(d) Identify any four assumptions of cost-volume-profit analysis.

Question 5

(a) (i) With help of examples, define the term 'limiting factor', as applied tothe preparation of budgets.

(2 marks)

(ii) Explain any three disadvantages of budgeting. (3 marks)

(b) Kamurasi Assembler Ltd (KAL) assembles a number of electronic appliances. The following information relates to the assembling of extensioncables, one of its products during the year ending 31 March, 2019.It is a company standard to assemble five extension cables within

one hour.

Required:

Compute the following variances:

(i) (ii) (iii) (iv)

Variable overhead cost and fixed overhead cost. Variable overhead expenditure.

Variable overhead efficiency and fixed overhead efficiency. Fixed overhead capacity and fixed overhead volume.

Budgeted

Actual

Production (units)

8,000

9,500

Total overheads (Shs '000')

10,800

11,500

Variable overheads (Shs '000')

8,640

9,200

Fixed overheads (Shs '000')

2,160

2,300

Time (hours)

1,600

2,200

Question 6

(a) The academic registrar of ISAK Public Universityhas identifiedthe number of hours taught as a cost driver for extrateaching overheads. The following is a summary of thenumber of hours and overhead costs for the papers taught per month:

Month

No of hours taught

Overhead costs

Shs '000'

January

200

3,500

February

240

4,100

March

260

4,400

April

300

5,000

May

320

5,300

Required:

Using least squares analysis,estimate the overhead costs when 350 hours are taught.

(10 marks)

1. (b)(i) Explain any two causes of over and under absorption of overheads.
2. (2 marks)
3. (ii) Explain the accounting treatment of over and under recovery of overheads. (2 marks)
4. (c)Global Furniture Ltd (GFL) has received a purchase order from the Ministry of Finance, to supply 10,000 office chairs under the 'Buy Uganda Build Uganda' policy. In order to undertake this job, GFL will need a fixed investment of Shs 60 million and a working capital of 50% of the sales. Required are 10,000 pieces of timber and 3,500 hours of direct labour of
5. which 1,000 hours is overtime payable at double the labour rate. The following information is also relevant to the job:

Item

Amount

Shs '000'

Timber(per piece)

15

Vanish& accessories

55,000

Labour rate (per direct labour hour)

10

Factory overheads (per direct labour hour)

10

Selling & distribution expenses

30,000

Material recovered as scrap

5,000

GFL expects a net return of 25% on the capital employed.

Required:

Prepare job cost sheet showing the price GFL should quote. (6 marks)