QUESTION 1 A. Differentiate between management accounting and financial accounting. (6 marks)

B. Given below is the list of materials used in production of the respective products. Classify the materials into direct or indirect materials. i. Glue used in binding a book. ii.Glass used in spectacle. iii. Cloth used in making a dress. iv.Timber used in constructing a house. v. Water used in making ice cream. vi.Water used in making household ice cube. (3 marks)

C.Lilistreet Art Center commenced its business on 1 May 2017. The company provides hands on artist inspired art lessons to school children. The following is a list of expenses incurred by Lilistreet Art Center for the month of May 2017:

Expenses	RM
Artinstructors'salaries(3instructors)	2,200perinstructor
1supportstaff'ssalary	1,800
Artsupplies(100%variable)	270perchildren
Utilitiesbills(80%variable)	900
Rentalofartstudio	2,000
Newspaperadvertising(3newspapers)	500per newspaper

During the month of May 2017, 35 children had registered for the art lessons. Lilistreet Art Center also incurred business license cost of RM960 per year. Required:

Identify the total variable costs and total fixed costs incurred by Lilistreet Art Center for the month of May 2017.

QUESTION 2

(6 marks) (Total:15 marks) Malchers Bhd is reviewing the purchasing policy for its raw material, 'Nigella Powder'. The material is being used in its production of mineral coffee which is sold in boxes. The estimated production of the mineral coffee is 20,000 boxes per year. Each box of mineral coffee requires 0.5 kg of 'Nigella Powder'. Currently the company obtains supplies of this raw material from Purple Bright Bhd at a fixed price of RM5 per kg.

The purchasing department estimates the following costs associate with the supplies of the raw material: Holding cost per kg is 20% of purchase price of the raw material. Administrative cost for each order is RM12.50. Delivery and receiving charge of RM100 per order.

Required:

i.Calculate the Economic Order Quantity (EOQ) for 'Nigella Powder'. ii.Calculate the total costs for 'Nigella Powder' if the company were to order the materials at the EOQ. (15 marks)

Question 3

Fiona Tailor, owned by Miss Fiona, offers exclusive, ready-to-wear outfits for the stylish, modern Muslimah. In order to meet an increasing demand, Miss Fiona hires three workers to help her fulfill the orders from regular customers. For the fourth week of May 2017, the following data was available:

Workers	Rateper hour (RM)	Hours Worked	FinishedProducts
Siti	5	50	15
Lina	6	60	20
Yan	8	55	10

Standard time allowed for one pair of Muslimah outfit is 4 hours.

The normal working hours in a week is 40 hours and overtime premium is 50% of the normal hourly rate. Fiona Tailor has implemented individual bonus scheme. Under this scheme workers are entitled for bonus of 70% of time saved at basic rate.

Required:

a.Calculate total wages for each worker. (11 marks)

b.Discuss the differences between individual bonus schemes and group bonus schemes. (4 marks)

(Total: 15 marks)