Question 1

(a)Describe theFOUR (4)methods of allocating joint costs to products.(12 marks)

(b)Weng Tai company simultaneously produces three products (X, Y and Z) from a single process. X and Y are processed further before they can be sold; Z is a by-product that is sold at split off point for RM2 per unit without incurring any further process costs. Joint costs are apportioned using the final sales value method. The sales prices of X and Y after further processing are RM40 per unit and RM35 per unit respectively. Data for April are as follows:

RM

Joint production costs that produced 5,000 units of X, 5,500 units of Y and 3,500 units of Z

150,000

Further processing costs for 5,000 units of X

30,000

Further processing costs for 5,500 units of Y

40,000

Required:

Calculate the total costs and profit for the production of X and Y.(14 marks)

(c)DiscussTHREE (3)arguments in support of variable costing and absorption costing.(12 marks)

(d)Zency Sdn Bhd produces pens. Dataconcerning the company's operations last year appear as follows:

Units in beginning inventory

5,000

Units produced

50,000

Units sold

46,000

Selling price per unit

RM2.50

Variable costs per unit:

Direct materials

RM0.80

Direct labor

RM0.50

Variable manufacturing overhead

RM0.10

Variable selling and administrative overhead

RM0.05

Fixed costs in total:

Fixed manufacturing overhead

RM20,000

Fixed selling and administrative overhead

RM10,000

Required:

make an income statement for the year using absorption costing.(12 marks)

[Total: 50 Marks]