June Sem, 2020 End Semester Examination ACCT 1423 Management Accounting II Section B Question 2 a) Clucas Diomande Sdn Bhd manufactures and sells four products. The company is currently preparing its production schedule for the next period. The details of the four products are as follows: Product P Product Q Product R Product S Per unit RM RM RM RM Selling price 240 400 360 259 Direct material 60 100 92 65 Direct labour (RM10 per hour) 50 100 80 60 Variable overheads 40 80 60 50 Total fixed overheads are expected to be RM284,000 for the next period. Product P Product Q Product R Sales demand (units) 1,150 1,800 2,500 Product S 3,160 The sales figures include the following units, which the company must supply to customers in the next period. Product P 250 units Product Q 350 units Product S 400 units The availability of direct labour will be limited to 33,150 hours for the next period. Required: Determine the order of priority for production, develop the production schedule, and calculate the resulting profit that your production plan will yield. (17 marks) Page 1 of 10 (b) Jack Personal Devices makes and sells hand-held computers. Each computer regularly sells for RM200. The following cost data per computer are based on a full capacity of 12,000 computers produced each period: Direct materials. RM75; Direct labour, RM55; Factory Overhead (75% variable, 25% fixed), RM48. A special order has been received by Jack for a sale of 2,500 computers to an overseas customer. The offered price in this special order is RM178 each. Jack is now selling 7,200 computers through regular distributors each period. Required: Advise Jack on whether he should accept this special order. (5 marks) [22 Marks] Question 3 Hernandez Bhd uses absorption costing, based on a labour hour rate, to establish the production costs for the three products it manufactures. The budgeted details for the next period are as follows: Product Exe Whye Zed 3,000 2,500 2,000 Production (units) 144,000 96,000 57,600 Direct materials (RM) 134,400 112,000 67,200 Direct labour (RM) 4 4 3 Direct labour hours per unit 5 4 3 Direct materials per unit (kg) 2 4 3 Machine hours per unit Exe, Whye and Zed all use the same direct material purchased at the same price. Direct labour is paid at the same hourly rate for working on Exe, Whye and Zed. Production overheads for the period are RM408,800 and are absorbed on a direct labour hour basis. The company is now considering using activity based costing (ABC) to calculate the production costs of each product. The following overhead information is available for the period: Activity Cost (RM) Cost driver 120,000 Inspection Number of production runs 112,200 Machining Number of machine hours 49,500 Packaging Number of orders 127,100 Material handling Quantity of material used Product Number of production runs in the period Number of orders in the period Exe 150 150 Whye 200 175 Zed 250 225 Required: a) Calculate the production overhead costs (to two decimal places) for one unit of each product using absorption costing. (5 marks) b) Calculate the total production overhead cost (to two decimal places) for one unit of each product using activity based costing. (11 marks) [16 Marks] END OF QUESTION PAPER