Question 2 (a) Explain any three differences between financial accounting and cost accounting. (3 marks) (b) Describe any three documents that can be used when computing employees' gross wages in an organisation. (3 marks) (c) Kaleke Kasome Limited (KKL) deals in production and supply of school uniforms across Uganda. KKL's management is focusing on ensuring effective control of the stock of raw materials through monitoring its movements for purposes of effective decision making. Currently, it uses the weighted average cost method for inventory valuation. As at 30 April 2020, 5,000 sq. meters valued at Shs 24 million were held in the stores. KKL's storekeeper has provided the following information regarding the cloth material movements during the month of May 2020: Date 2 4 8 12 21 24 30 Purchases Issues Quantity (sq. meters) 4,500 6,000 Required: Quantity (sq. meters) 6,500 3,000 5,000 3,500 Unit cost (Shs) 4,500 4,750 4,700 4,600 7,000 Determine, for the month of May 2020, Kaleke Kasome Limited's: (i) Closing inventory (ii) Material production costs (iii) Material purchases (12 marks) (1 mark) (1 mark) (Total 20 marks) 21 December, 2020

Question 3 (a) (i) Explain any five salient features of a contract. (ii) Funyuula Construction Services Limited (FCSL) deals in general construction and maintenance. FCSL awarded a contract in 2019 worth Shs 3 billion to construct a drainage system along the road extension from Namayingo to Busia district as part of the government initiative to ease connectivity to the border post. Data relating to the contract performance as at 31 May, 2020 has been provided as below: Particulars Direct labour expenses Advance direct labour payments Materials delivered to the site Machinery installed on site Other direct expenses Accrued other direct expenses Sub-contractor fees Material returns (to the store) Material on site (31 May, 2020) Depreciation of machinery Work certified Work not certified Cash received Required: Shs '000' 820,000 120,000 1,050,000 250,000 105,000 25,000 125,000 205,000 102,000 80,000 2,100,000 300,000 2,600,000

Prepare, for FCSL, a contract account and an extract of the statement of financial position (10 marks)

(b) Afronica Processors Limited (APL) deals in production of sweet potato flour for export to Asian countries. APL operates an interlocking accounting system where cost accounts are kept separate from the financial accounts. During the period ended 31 May 2020, the financial accounts showed a profit Shs 64,142,400 while the cost accounts showed a profit Shs 70,711,200. (5 marks)

Introduction to Management Accounting - Paper 6 A thorough analysis of the accounts revealed the following: Stock valuations Direct materials: Opening inventory Closing inventory Finished products: Opening inventory Closing inventory Cost accounts Shs 23,532,450 18,916,350 45,853,950 39,433,500 Financial accounts Shs 25,043,550 17,691,600 44,522,250 38,401,950 The firm received interest Shs 1,904,400 and suffered a loss Shs 6,037,500 from the disposal of an equipment. All these transactions were not recorded in the cost accounts.

Required: Reconcile the profit obtained under the cost accounts with the profit under the financial accounts.

Question 4 (a) Explain any four features of process costing. (b) (i) (4 marks) Explain any two arguments for and against the absorption costing technique. (4 marks) (ii) Bugiri Plastics Limited (BPL) produces and distributes packaging materials in Eastern Uganda. BPL uses absorption costing system to determine the profits obtained during the year. BPL's newly employed chief finance officer has advised that they should now adopt the use of the marginal costing system for quarterly reports since it recognises fixed overheads as period costs as opposed to absorption costing that recognises overheads as product costs. (5 marks) (Total 20 marks)

The data provided below relates to BPL's transactions for the quarter ended 31 March, 2020: Production (batches) Sales (batches) Variable production costs: Direct materials Direct labor Direct expenses Fixed overheads. Production overheads Administrative expenses Distribution expenses Advertising expenses Ware house expenses January 65,000 50,000 Shs '000' 1,300,000 2,600,000 1,430,000 1,625,000 670,000 450,000 200,000 500,000 February 67,500 68,000 Shs '000' 1,350,000 2,700,000 1,485,000 1,755,000 650,000 510,000 180,000 500,000 March 69,000 98,000 Shs '000' 1,380,000 2,760,000 1,518,000 1,863,000 695,000 480,000 150,000 500,000 Additional information: Closing inventory as at 31 December, 2019 was Each batch sold for Shs 200,000 and the unit variable costs remained constant during the period.

Required: Determine, using the marginal costing technique, the profit per batch for each month. Question 5 (a) Describe the following budgetary control ratios used by various organisations: (i) Activity ratio (ii) Capacity ratio (iii) Efficiency ratio (b) Explain any three arguments for adoption of activity based budgeting in organisations. (3 marks) (c) Sweet Sip Uganda Limited (SSUL), a soft drinks bottling firm, produces "Sweet time" that is highly demanded for by the youth. In order to reorganise internally, management has created a management accounting unit to assist in providing information for effective decision making. 15,000 batches. Question 6 Mr. Mugisa Mugi, the head of the unit, has opted for a weekly variance analysis of the production costs and sales in order to identify key issues for future improvement. The information provided below relates to the firm's production and sales for "sweet time" for a week at Mito sales point: 1 Actual sales were 120,000 units at a unit cost Shs 995 as opposed to the budgeted sales of 100,000 units estimated to generate Shs 100 million. 2 Material usage was 10 ml per unit at Shs 30 per ml compared to the budgeted 12 ml per unit estimated at Shs 28 per ml. 3 Direct labour expense was Shs 1,000 per hour as opposed to the planned Shs 1,200 per hour. 4 Actual labour hours spent on actual production were 24,000 hours compared to 30,000 hours budgeted. 5 All units produced were sold and there was no opening or closing inventory during the period. Required: Determine, for SSUL, the following variances: (i) Sales price (ii) Sales volume (iii) Material price (iv) Material usage (v) Labour rate (vi) Labour efficiency (Total 20 marks)

(a) Explain any three factors that influence the selection of an overhead recovery rate method. (3 marks) (b) Mukwaasi Coffee Processors Limited processes coffee mainly for export. The company's management has always determined the product prices basing on the prevailing international prices but has now adopted the full cost-plus pricing policy. The challenge now lies in the distribution of service department overheads to production departments in order to determine unit product costs basing on the fact that the service departments exist to aid production. Departmental overhead Production department Shs '000' 150,000 130,000 120,000 data for May 2020 has been provided below: Service department 1 2 3 Q R Shs '000' 140,000 100,000 Additional information regarding the distribution of service department overhead expense has been provided below: Departments Q R 1 2 40% 10% 30% 40% 3 30% 20% Q R - 20% 10% - reapportion service department using the simultaneous equation It is the policy of management to overheads to production departments method.

Required: Reapportion the service department overheads to the production departments. (8 marks) (c) Buyonjo Uganda Limited (BUL) deals in production and sale of soap within Uganda. The firm has attained goodwill as a result of production of high quality soap. Following the appointment of Miss Muledu Mule as the new finance manager, BUL has adopted the use of activity based costing (ABC) techniques in order to have overheads allocated to products for effective control purposes. The information below relates to production of BUL's the month of May 2020: three main brands for Mukubwa 2,200 Shs '000' 400 500 350 Product Kuwoosha Mudoogo 3,500 Shs '000' 400 400 600 Production (batches) Variable costs per batch Direct materials Direct labour Direct expenses 2,000 Shs '000' 300 400 500 21 December, 2020 Overhead costs information: Shs '000' Cost driver Number of set ups Number of production runs Number of inspections Number of distribution points Set up costs Production costs Inspection costs Distribution costs 434,000 506,000 397,000 513,000 Cost driver information: Products Cost driver rate: Number of setups Number of production runs Number of inspections Number of distribution points Note: All units produced were distributed during the period.

Required: Kuwoosha Mudoogo Mukubwa 70 80 90 40

Calculate, using activity based costing, BUL's total cost per product brand.