BOOKKEEPING AND ACCOUNTING 3

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1 BOOBUS3 JUNE 2012 EXAMINATION DATE: 14 JUNE 2012 TIME: 14H00 17H00 TOTAL: 100 MAKS DUATION: 3 HOUS PASS MAK: 40% (NH-32 / UD-08) THIS EXAMINATION PAPE CONSISTS OF 2 SECTIONS: SECTION A: SECTION B: CONSISTS OF 15 TUE O FALSE QUESTIONS CONSISTS OF 4 QUESTIONS (15 MAKS) (85 MAKS) INSTUCTIONS: 1. ead the following instructions carefully before answering the paper, as failure to act upon them will result in a loss of marks. 2. Write your answers in your answer book, which is provided in the exam. 3. Ensure that your name and student number are clearly indicated on your answer book. 4. Write your answers in either blue or black ink in your answer book. 5. ead each question very carefully before you answer it and number your answers exactly as the questions are numbered. 6. Begin with the question for which you think you will get the best marks. 7. Note the mark allocations for each question give enough facts to earn the marks allocated. Don't waste time by giving more information than required. 8. You are welcome to use diagrams to illustrate your answers. 9. Please write neatly we cannot mark illegible handwriting. 10. Any student caught cheating will have his or her examination paper and notes confiscated. The College will take disciplinary measures to protect the integrity of these examinations. 11. If there is something wrong with or missing from your exam paper or your answer book, please inform your invigilator immediately. If you do not inform your invigilator about a problem, the College will not be able to rectify it afterwards, and your marks cannot be adjusted to allow for the problem. 12. This paper may be removed from the examination hall after the examination has taken place. NOTE: YOU MAY USE A NON-POGAMMABLE CALCULATO. DAMELIN COESPONDENCE COLLEGE JUNE 2012 PAGE 1 OF 5

2 SECTION A (15 MAKS) TUE O FALSE QUESTIONS Indicate whether the following statements are true or false. Write only 'true' or 'false' for your answer. There is no negative marking so do not leave any questions unanswered. 1. Manufacturing overhead describes all manufacturing costs incurred in producing the finished product. 2. Marketing, distribution and selling costs are sometimes known as order filling costs. 3. Sunk costs are costs which can only be changed in the future. 4. Variable costs change as the seasons change. 5. The South African evenue Service allows the use of the FIFO and weighted average methods of inventory keeping. 6. eorder point = lead time average daily or weekly usage. 7. Primary material is also known as direct material. 8. Under stocking is the amount the supplier delivered short. 9. Prevention costs with regard to stock are costs incurred to prevent pilferage or stealing. 10. In activity based costing, the number of cost drivers is a function of the complexity of the business's operations. 11. Overhead costs have been under-applied if the applied costs are less than the actual costs. 12. A budget is prepared to ensure that unexpected surprises do not have detrimental effects on the business. 13. Actual costing systems are not usually preferred as they tend to produce unit costs that fluctuate between periods or batches. 14. Material purchase price variance occurs when there is a difference between the actual quantity issued at the actual cost and the actual quantity issued at standard price. 15. Actual year-end overheads not exceeding the standard variances will result in a favourable variable overhead efficiency variance. [15] DAMELIN COESPONDENCE COLLEGE JUNE 2012 PAGE 2 OF 5

3 SECTION B (85 MAKS) QUESTION 1 The following cost data is an extract from the books of Jam Jar: Planned production for the month is 500 units. All the products were sold in the month of manufacture. Direct materials to produce one unit of product A is 5 30 per unit. Direct labour to produce one unit of product A is per hour. Manufacturing overheads are as follows: Foreman salary for the month ental is 100 per square metre. Total space is square metres. Production occupies 60% of the floor space and the balance is administrative cost. Indirect materials amount to for the month. Insurance is per annum. Quality controller costs are per annum. Marketing, distribution and selling costs is equal to 50% of the direct labour cost. Carriage on sales is 75 per product sold. Municipal services and rates are per month. Temporary secretary per month. Do the necessary calculations to prepare a summarised statement of cost. [20] DAMELIN COESPONDENCE COLLEGE JUNE 2012 PAGE 3 OF 5

4 QUESTION 2 Use the FIFO method of inventory control and draft the inventory cost from the transactions listed below: You may do so in tabular form. Date Transaction 2 Purchase ,75 each 4 Issued units into production 6 Purchased ,80 6. Issued units into production 10 Purchased , Issued units into production 20 Issued units into production 25 Purchased ,85 25 Issued units into production Note: There was no opening stock [20] QUESTION 3 The following information is an extract from the books of Tilton Enterprises: Cash purchases of direct material Transport cost of direct material paid from petty cash Direct labour Indirect labour Indirect material Maintenance: Factory Sundry manufacturing overheads Electricity (60% relates to factory) Depreciation of factory equipment Depreciation of office equipment Salaries: Admin staff Selling expenses ent (50% relates to the factory) Inventory on hand 2011/03/ /04/01 Direct material Work in process Finished goods DAMELIN COESPONDENCE COLLEGE JUNE 2012 PAGE 4 OF 5

5 Complete the following accounts in the general ledger: Direct material Direct labour Manufacturing overheads Work in process Finished goods [25] QUESTION 4 Month Budgeted Sales Credit sales January February March April May June July August September Debtors Apr 80% of sales are expected to be on credit Debtors payments are expected to be as follows: 70% in the month following the month of the sales 20% in the second month following the month of the sales 7% in the third month following the month of the sales 3% is written off as irrecoverable Prepare a schedule showing the budgeted amounts which Bolton Limited expects to receive from debtors for each month April, May and June. [20] [85] Section A: 15 marks Section B: 85 marks TOTAL: 100 MAKS DAMELIN COESPONDENCE COLLEGE JUNE 2012 PAGE 5 OF 5