Solve the questions below

8 Closing balance during the month of May 2018 was Shs 26,000,000. 9 Rent is paid on the 5 of every month and is to remain constant. Required: Prepare a cash budget for Ornaments Limited for the next 6 months starting June 2018. (14 marks) (Total 20 marks) Question 6 (a) (b) (C) (i) Define the term 'payroll accounting'. (1 mark) (ii) Describe any three fraud issues in the payroll department and explain how they can be overcome. (6 marks) TLK Fumigators Ltd provides fumigation and cleaning services to the residents of Mukono district. The rm employs 45 casual workers who are paid on a daily basis at a rate of Shs 12,000 on top of a monthly basic pay of Shs 200, 000. During the month of May. 2018 the rm received three major projects which it distributed to all its casual workers equally. In all the projects, a standard time of 25 days per worker was set and agreed upon by all the workers. Due to the effects of teamwork. workers on the first, second and third projects accomplished their tasks 4 days, 6 days and 5 days less than the standard time set respectively. It is the company's policy to reward workers basing on the Rowans premium scheme. Required: Prepare the company's total labour expense for the month of May 2018. (8 marks) Luzze Soft Drinks Packers Limited (LSDPL) deals in the production of juice products in Busia district. The company enjoys monopoly at the border and the nearby towns due to the production of cheap affordable products. The company temporarily hires casual workers who assist in packing its products before delivery to the distributors. The workers are rewarded on a differential piece rate scheme that is based on the number of batches packed per week as shown below: Question 5 (a) ('3) Explain the steps involved in the budgeting Process. (6 marks) Ornaments Electronics Ltd is a renowned electronics trading company with its main stores on Main Street of Jinia municipality. Management is in the process of preparing its financial plan for the next six months starting June 2018. The company's performance records for the month of May 2018 have been provided by the finance manager as shown below: Particulars Shs '000' Shs '000' Sales revenue 85,000 Purchases 40,000 Rent 4,000 Salaries 10,000 Welfare 6,000 Transport 5,000 Miscellaneous 2,500 151.5001 Profits m The following additional information relating the next budget period has been provided: 1 Due to the growing construction sector, sales and purchases are expected to increase by 5% and 3% respectively on a monthly basis for the first four months. Cash sales are expected to be 45% of the total monthly sales. 60% of the credit sales are to be recovered in the next month following the month of sale, 20 % to be recovered two months after the month of sale while 15% is to be recoverable in the third month after the month of sale. 4 60 % of the purchases are to be paid for in the month of purchase while the balance payable in the next month following the month of purchase. 5 Salaries and transport expenses are expected to increase by 3% during the month of June, July and August and thereafter remain constant. 6 Welfare and miscellaneous expenses are to increase by 10% in the first two months and by 5% in the remaining period. These are paid for during the month in which they arise. 7 Management acquired a loan Shs 120,000,000 at a 20% interest rate in the month January 2018, interest is paid on a quarterly basis. COM If this machine is purchased by the company. variable operating costs will reduce by Shs 4,000,000 from Shs 20,120,000 per annum due to its condition. Mr. Musoke one of the company's plumbers is willing to purchase the company's old machine at Shs 27.200.000 it replaced. Required: Advise management on whether they should replace the old machine. (7 marks) (Total 20 marks) Question 3 (a) Define the following terms: (i) Cost objective. (1 mark) (ii) Semi - variable costs. (1 mark) (iii) Cost center. (1 mark) (b) Ms. Judith Bombo operates a catering service company, Bombo Dinner Ltd that specialises in serving local foods. The restaurant relies on individual and companies for their customers. The company allocates its costs basing on the number of plates served. The following cost information is for the first five months ending 31 May. 2018: No of Total cost Month plates Shs '000' January 2,500 16.500 February 2,700 17.500 March 3,000 19.000 April 3,300 20.500 May 3,350 20.750 The firm has received an order from a new Non-Government organisation in the area to supply 50 plates of food for its staff on a daily basis during the working days for a period of 3 months. As a result of the order. the firm plans to supply 4.400 plates of food during the month of June 2018. Required: Using the simple regression method determine the firm's total costs for the month of June, 2018. (9 marks) Joint products Koke Coal Sulphate Gas Selling price at split off (Shs) 200,000 400,000 500,000 700,000 Output (laboratory weight) 13,000 1,800 3,600 6,000 Raw materials, direct labour expenses and production overhead costs up to the split off point were Shs 80,000,000, Shs 40,000,000 and Shs 60,000,000 respectively. The company allocates joint costs to products basing on the weight in the laboratory. Required: Calculate the total costs incurred on each of the products. (10 marks) (c) Describe the accounting treatment for by-products using the following methods: (i) Other income method. (1 mark) (ii) By-product sales added to the main product sales. (1 mark) (d) kyuma Manufacturing Company Lid deals in the manufacture of nails. The company produces two types of nails A and B in batches of 50 and 80 respectively per hour. The following data relates to the month of April, 2018: Type of nail Products A B Budgeted production (batches) 4,500 6,800 Actual production (batches) 5,800 7,200 The firm spent 160 hours on the production of nails during the month of April. Required: Calculate the following control ratios: (i) Capacity. (2 marks) (ii) Efficiency. (2 marks) (iii) Activity . (2 marks) (Total 20 marks)(c) Braga paints Lid is a newly established small scale paints firm in western Uganda. The firm operates under three production departments namely pasting, thinning and paint shop as well as two service departments of canteen and inspection. For the first quarter of 2018, the following overhead cost information below was extracted from the company's cost accounts: Department Shs '000' Pasting 160,000 Thinning 100,000 Paint shop 60,000 Canteen 70,000 Inspection 40,000 Service department overheads are charged to production departments basing on the rates below: Machinery Pasting Thinning Paint shop Canteen Inspection Department % % % % % Canteen 25 30 35 10 Inspection 30 25 30 15 Required: Using the repeated distribution method, calculate the overhead costs charged to each production department. (8 marks) (Total 20 marks) Question 4 (a) Explain the difference between joint products and by-products. (2 marks) (b ) M/S Axe Minerals Ltd is a chemical processing firm located in Kabarole district. The firm produces various chemicals that are sold within the region. Production of the chemicals goes through a series of processes before the final product is produced. The following data has been provided by the production manager relating to the month of April, 2018:Question 2 (a) (b) (0) Describe any three objectives of cost and management accounting. (3 marks) Savvy takeaway is a fast foods restaurant located in the downtown areas of Kampala. The restaurant is currently facing stiff competition from several new restaurants that have been established in the same area. The following information was extracted from the restaurant's quarterly performance records for the first quarter of 2018: Products Chips Sausages Chicken Sandwiches Units (packs) 5.000 3.000 1.500 300 Shs Shs Shs Shs Unit selling price 5,000 3.000 7.000 10,000 Unit variable costs (3.000) (1 .200) (3.500) (5.000) Directly attributable fixed costs (1.200) (800) (1,000) (2.000) Common fixed costs (1.500) (500) (1.000) (1.5.0.0.) Profit/loss 1m) 4011 w The restaurant management is concerned about the poor performance of chips. Mr. Mabiriizi the head of customer care has advised that the production of chips be discontinued since it is loss making. He insists that dropping chips would enable his team concentrate on only the profitable products. Common fixed costs are absorbed on the basis of the number of units produced. They are. however. constant regardless of output levels. Required: Using appropriate computations, advise management on the proposal to drop the production of chips. (10 marks) Vet Ltd provides plumbing services with its main market in Wakiso district. The company purchased a plumbing machine three years ago at Shs 87, 600,000 with a usefull life of 6 years and zero scrap value. it's the company's policy to depreciate its assets using straight line method. At a recent disposal of assets by a local authority, a plumbing machine was advertised at a cost of Shs 33, 000,000 with expected life span of 3 years. No of batches Rate per batch (Shs) 0 - 500 40 501 - 1000 60 1001-1500 70 1501-2000 80 Above 2000 95 Mr. Hahulo one of the hard-working workers normally hired by the company to do the packing managed to pack 3,200 batches with 30%, 50%, 16%, 4% packed in the first week, second week, third week and the fourth week respectively in the month of May, 2018. This was slightly above his target of 3,000 batches during the month. It is company's policy to pay all casual workers at the end of the month. Required: Determine Mr. Hahulo's wage for the month of May, 2018. (5 marks) (Total 20 marks)