PMA0064 ESSENTIALS OF MANAGEMENT ACCOUNTING IS OCTOBER 2009 Question 1 The following is the estimated cost for Alam Ltd. There are two production departments namely Assembly and Machine Shop and two service departments namely Finishing and Store. Total Assembly Machine Finishing Store RM Shop RM RM Direct material cost 8.000 7,000 2.000 1,000 Indirect material 30,000 40,000 20,000 10,000 Indirect labour 12,000 15,000 3,000 10,000 Electricity 120,000 Insurance of 140,000 Machines Insurance of Factory 80,000 Salaries 200,000 RM Additional information: Assembly Machine Finishing Store Shop RM RM RM RM Floor area (square meters) 4,800 6,400 1.600 3.200 Number of employees 100 60 30 10 Kilowatt hours 20,000 30,000 2,000 8,000 Value of Machines(RM) 80,000 200.000 100,000 20,000 Machine hours 15,000 20,000 Labour hours 60,000 20,000 Service hours 6,000 4,000 Store supports the three departments based on proportions 50% (assembly): 30% (machine shop): 20% (Finishing). Finishing services the two production departments based on service hours Required a) Calculate overhead absorption rates (OAR) for the production departments using the following bases of apportionment: 1) Rate per labour hour for Assembly ii) Rate per machine hour for Machine shop ESSENTIALS OF MANAGEMENT ACCOUNTING 15 OCTOBER 2020 PMA01964 Question 2 The following company uses process costing in their costing system. The following data concern the operation's first processing department for September 2019. Direct materials and conversion cost are added continuously throughout the process. Units started into production during the month 11,000 Units completed and transferred out during the month 10,200 Costs added to production during the month: Direct materials cost RM140,112 Conversion cost RM559,520 Work in process, September 2019: Units in process 600 Percentage of completion with respect to direct 90% materials 20% Percentage of completion with respect to conversion cost a) Calculate the total equivalent units for direct materials and conversion cost. (8 marks) b) Calculate the cost per equivalent unit for direct materials and conversion cost. (6 marks) c) Calculate total cost for the period. (2 marks) d) Calculate the cost of completed production. (2 marks) e) Calculate cost of ending work in process inventory. (7 marks) (Total 25 marks) PMA0064 ESSENTIALS OF MANAGEMENT ACCOUNTING IS OCTOBER 2020 Question 3 Kingbank Berhad has two types of credit cards: Classic and Gold. It uses activity- based costing to assign costs to their products in the credit card department. The following information has been allocated. Costing data: Classic Gold 4,000 Total 10,000 6,000 Activity Processing transactions Preparing statements Answering questions Cost driver Transactions proceed Number of statements Number of calls 8,000 7,000 15,000 5,000 5,000 10,000 Activity cost data: Activity Processing transactions Preparing statements Answering questions a) Calculate the activity cost driver rate. Activity cost RM120,000 RM90,000 RM82,000 (6 marks) b) Calculate the total cost for each credit card. (19 marks) (Total 25 marks) PMA0064 ESSENTIALS OF MANAGEMENT ACCOUNTING IS OCTOBER 2020 Question 4 Harizona firm manufactures and sells a single product, product H. The information about product H is as follow: RM Selling price 30 Variable manufacturing cost 8 Variable selling and administration cost 4 Details for the month of May and June are as follows. May June Production of H 750 units 1,000 units Sales of H 600 units 1,150 units Fixed manufacturing overhead RM4,500 RM4,500 Fixed non-manufacturing cost RM3,750 RM3,750 The normal production of product H is 900 units. a) Calculate production cost per unit using Absorption method and Marginal costing method (3 marks) b) Prepare for May and June the income statements based on Absorption costing approach. (12 marks) c) Prepare for May and June the income statements based on Marginal costing approach. (10 marks) (Total 25 marks) PMA0064 ESSENTIALS OF MANAGEMENT ACCOUNTING IS OCTOBER 2009 Question 1 The following is the estimated cost for Alam Ltd. There are two production departments namely Assembly and Machine Shop and two service departments namely Finishing and Store. Total Assembly Machine Finishing Store RM Shop RM RM Direct material cost 8.000 7,000 2.000 1,000 Indirect material 30,000 40,000 20,000 10,000 Indirect labour 12,000 15,000 3,000 10,000 Electricity 120,000 Insurance of 140,000 Machines Insurance of Factory 80,000 Salaries 200,000 RM Additional information: Assembly Machine Finishing Store Shop RM RM RM RM Floor area (square meters) 4,800 6,400 1.600 3.200 Number of employees 100 60 30 10 Kilowatt hours 20,000 30,000 2,000 8,000 Value of Machines(RM) 80,000 200.000 100,000 20,000 Machine hours 15,000 20,000 Labour hours 60,000 20,000 Service hours 6,000 4,000 Store supports the three departments based on proportions 50% (assembly): 30% (machine shop): 20% (Finishing). Finishing services the two production departments based on service hours Required a) Calculate overhead absorption rates (OAR) for the production departments using the following bases of apportionment: 1) Rate per labour hour for Assembly ii) Rate per machine hour for Machine shop ESSENTIALS OF MANAGEMENT ACCOUNTING 15 OCTOBER 2020 PMA01964 Question 2 The following company uses process costing in their costing system. The following data concern the operation's first processing department for September 2019. Direct materials and conversion cost are added continuously throughout the process. Units started into production during the month 11,000 Units completed and transferred out during the month 10,200 Costs added to production during the month: Direct materials cost RM140,112 Conversion cost RM559,520 Work in process, September 2019: Units in process 600 Percentage of completion with respect to direct 90% materials 20% Percentage of completion with respect to conversion cost a) Calculate the total equivalent units for direct materials and conversion cost. (8 marks) b) Calculate the cost per equivalent unit for direct materials and conversion cost. (6 marks) c) Calculate total cost for the period. (2 marks) d) Calculate the cost of completed production. (2 marks) e) Calculate cost of ending work in process inventory. (7 marks) (Total 25 marks) PMA0064 ESSENTIALS OF MANAGEMENT ACCOUNTING IS OCTOBER 2020 Question 3 Kingbank Berhad has two types of credit cards: Classic and Gold. It uses activity- based costing to assign costs to their products in the credit card department. The following information has been allocated. Costing data: Classic Gold 4,000 Total 10,000 6,000 Activity Processing transactions Preparing statements Answering questions Cost driver Transactions proceed Number of statements Number of calls 8,000 7,000 15,000 5,000 5,000 10,000 Activity cost data: Activity Processing transactions Preparing statements Answering questions a) Calculate the activity cost driver rate. Activity cost RM120,000 RM90,000 RM82,000 (6 marks) b) Calculate the total cost for each credit card. (19 marks) (Total 25 marks) PMA0064 ESSENTIALS OF MANAGEMENT ACCOUNTING IS OCTOBER 2020 Question 4 Harizona firm manufactures and sells a single product, product H. The information about product H is as follow: RM Selling price 30 Variable manufacturing cost 8 Variable selling and administration cost 4 Details for the month of May and June are as follows. May June Production of H 750 units 1,000 units Sales of H 600 units 1,150 units Fixed manufacturing overhead RM4,500 RM4,500 Fixed non-manufacturing cost RM3,750 RM3,750 The normal production of product H is 900 units. a) Calculate production cost per unit using Absorption method and Marginal costing method (3 marks) b) Prepare for May and June the income statements based on Absorption costing approach. (12 marks) c) Prepare for May and June the income statements based on Marginal costing approach. (10 marks) (Total 25 marks)