Question 2 (a) (i) Describe any two ethical responsibilities of a management accountant. (2 marks) (ii) Explain any two roles of a management accountant in an organization. (2 marks) (b) (i) Distinguish between a materials requisition note and a bill of materials. (2 marks) (ii) Magoola carpentry workshop Limited deals in furniture. The firm purchases timber and turns it into furniture. Provided below is the monthly requirement for timber: Particulars Pieces Minimum usage 500 Maximum usage 900 Average usage 425 Normal usage 800 The supplier's lead-time ranges between 2 to 8 days and the reorder quantity is 3000 pieces. Required: Determine the firm's: (i) Reorder level (2 marks) (ii) Maximum stock level (2 marks) (iii) Minimum stock level (2 marks) (iv) Average stock (2 marks) During month of July 2019. 10.000 batches were introduced to the process and the following costs were incurred: Shs '000' Direct Materials 22.000 Direct labour 15.500 Overheads 9.000 Materials are added at the beginning of the process. Closing work in progress is 4.000 batches at 67% stage of completion. Required: Using F|F0 method of inventory valuation. prepare KSL's: (i) statement of equivalent units (4 marks) (ii) statement of cost per unit (3 marks) (iii) statement showing value of completed units and closing work in progress (4 marks) (iv) a process account (4 marks) (Total 20 marks) Question 5 (a) Describe any two qualitative factors that may be considered when (b) undertaking a make or buy decision. (2 marks) Fancy fabrics Ltd (FFL) manufactures textiles of various types purposely for sale. Production is carried out in rolls and normal monthly production is 50.000 rolls. At the beginning of October 2018. opening inventory was 25.000 rolls. 45.000 rolls were manufactured during the period while 60.000 rolls were sold. Cost data relates to the month of October 2019: Particulars m Direct materials m Direct labour m variable overheads m Fixed manufacturing absorption rate is Shs 320.000 per roll while administrative overheads and selling & distribution overheads are Shs 4 billion and Shs 6.5 billion respectively. Each roll produced is sold for Shs 2.5 million. Required: (i) Using absorption costing. prepare FFL's profit and loss statement. (c) (7 marks) (ii) Explain any three arguments in favour of marginal costing. (3 marks) Jingo and sons Ltd makes and sells music instruments both on a retail and whole sale basis. The firm's selling price for a speaker is Shs 850,000. The firm incurs variable cost expenses of Shs 650,000 per speaker while monthly fixed manufacturing cost and non manufacturing overheads are Shs 19 million and Shs 15 million respectively. Required: Determine the (i) firm's break even quantity. (2 marks) (ii) contribution to sale ratio. (2 marks) (iii) number of units to be sold in order to achieve the target profit of Shs 80 million. (2 marks) (iv) firm's margin of safety if budgeted sales is 300 speakers. (2 marks) (Total 20 marks) Question 6 (a) (b) (i) Explain any four merits of budgeting in organisations. (4 marks) (ii) Describe any two causes of labour variances. (2 marks) Byansi plastics Limited (BPL) is a renowned manufacture of quality plastic products. It deals in chairs, buckets and tables. BPL prepares quarterly budgets for planning purposes. The following data for relates to the current quarter: Product Budgeted selling price Opening Closing sales per batch inventory inventory (Batches) (Shs '000') (batches) (batches) Chairs 10,000 17,000 2,000 1,500 Buckets 50,000 12,000 15,000 10,000 Tables 7,000 18,000 1,700 1,000 Data relating to materials and labour has been provided as below: Material type Opening stock Closing stock tons tons A 7,000 5,000 B 8,000 7,000 Requirements per batch Product Material A Material B Direct labour hours tons tons Chairs 0.55 0.75 18 Buckets 0.4 0.6 22 Tables 0.65 0.95 20 Additional information: The company expects to incur Shs 400,000 and Shs 300,000 on purchases of a ton of material A and material B respectively. Budgeted direct labour expense per hour is Shs 2,000 while variable and fixed production overheads are to be incurred at Shs 200 and Shs 150 per direct labour hour respectively. Required: Prepare for BPL the following budgets following quarter: (i) Sales (3 marks) (ii) Production (3 marks) Raw material utilisation budget for material A (3 marks) Raw material purchases budget for material A (2 marks) Labour cost (3 marks) (Total 20 marks)Overheads Shs '000' Electricity 12 .000 Staff medical Insurance 25.000 Salaries 25.500 Depreciation 20.000 The following additional information has also been provided: Base Departments Number of employees Total A B C D Kilowatts 50 25 15 5 5 Bookvalue (100%) 2,000 1.200 600 80 120 100% 55% 30% 5% 10% Required: Determine the total costs for each department during the month of October 2019. (12 marks) (c) Define the following terms: (i) Practical capacity (1 mark) (ii) Maximum capacity (1 mark) (iii) Idle capacity (1 mark) (iv) Excess capacity (1 mark) (Total 20 marks) Question 4 (a) (i) Explain any three features of iob costing. (3 marks) (ii) Describe any two distinctions between process and specific order costing. (2 marks) (b) Kigonya Sweets Ltd (KSL) produces sweets mainly for the domestic market. It is company policy to value inventory using the first in first out (FIFO) method. Opening work in progress is 8,000 batches at 50% stage of completion. The following cost data relates to opening work in progress for the month of July 2019: Particulars Cost Shs '000' Direct Materials 17.600 Direct labour 12.400 Overheads 7.200 (c) Sabuuni Ltd is a liquid soap manufacturing firm in Kotido. Due to fear of routine expenses, the firm employs only temporary workers who are always called on basing on the demand. During August 2019, 4 workers were temporarily employed. The information below relates to the month of Auust 209: mm_ Rwakijuma Supervisor Worked for 50 hours in a week at an hourly rate of Shs 5.000 and Qualified for a monthly bonus of Shs 450,000 Supervisor Worked for 100 hours per week at an hourly rate of Shs 8.000 and qualified for a monthl bonus of Shs 200,000 Kagwa Driver Worked for 80 hours in a week at an hourly rate of Shs 3.000 and Qualified for a monthl bonus of Shs 150,000 I"- Worked for 80 hours in a week at an hourly rate of Shs 4.500 and Qualified for a monthl bonus of Shs 150,000 Required: Determine the firm's total labour expense for the month of August 2019. (6 marks) (Total 20 marks) Question 3 (a) (i) Explain the steps involved in activity based costing (ABC). (4 marks) (ii) Omega steels manufacture metallic storage containers that are mainly used by small scale business people in Kampala city. The production process goes through four departments A, B. C and D. During the month of October 2019, the firm produced and sold 150 containers and incurred the following expenses: Departments Cost Element A B C D Shs'000' Shs \"000' Shs '000' Shs '000' Direct Materials 120,000 70,000 20,000 10,000 Direct Labour 90,000 55,000 30,000 85,000