Final Examination Semester 3 / Year 2011

Transcription

1 Final Examination Semester 3 / Year 2011 COURSE : COST ACCOUNTING COURSE CODE : ACCT2113 TIME : 2 1/2 HOURS DEPARTMENT : FINANCE AND ACCOUNTING LECTURER : WONG SENG WEE Student s ID : Batch No. : Notes to candidates: 1) The question paper consists of 6 pages and 2 Sections. 2) Section A consists of 3 questions and Section B consists of 10 objective questions. 3) Answer ALL the questions. Return the question paper with your answer booklet.

2 Section A (70%): Answer all the questions: Q1 Proton Bhd make a product with the following standard cost per unit: $ / unit Raw materials $6.50) Direct labour (3 $6.00) Variable production overheads (@ $2.50 per direct labour) 7.50 Fixed production overheads (@ $5.00 per direct labour) Fixed production overheads for the period just ended were budgeted as $450,000 and were used to establish the above standard. Budgeted selling price set at $100 per unit. Actual costs for the period, when actual production / sales at 30,500 units were: Raw materials 152,000kg $957,600 Direct labour 92,400 hours $535,920 Variable production overheads $221,760 Fixed production overheads $430,000 Actual sales value achieved = $2,989,000 REQUIRED: (a) Calculate the budgeted production units for the period (3 marks) (b) Calculate the following variances for the period i. Raw material price variance (3 marks) ii. Raw material usage variance (3 marks) iii. Direct labour rate variance (3 marks) iv. Direct labour efficiency variance (3 marks) v. Variable production overhead expenditure variance (3 marks) vi. Variable production overhead efficiency variance (3 marks) vii. Fixed production overhead expenditure variance (3 marks) viii. Fixed production overhead volume variance (3 marks) ix. Fixed production overhead capacity variance (3 marks) x. Fixed production overhead efficiency variance (3 marks) xi. Sales volume profit variance (3 marks) xii. Selling price variance (3 marks) (c) Suggest 2 possible causes of adverse labour efficiency variance. (4 marks) (Total 43 marks) 1/5

3 Q2 A company refines crude oil into two grades (Grade A and Grade B) in a single process. The normal loss in refining is 2% of input and process costs are apportioned to the joint products on the basis of volume of output. The following information is provided for the period just ended: Input of crude oil 800,000 litres at a cost of $130,000 Conversion costs $105,200 Output of Grade A 468,000 litres, sold for $280,800 Output of Grade B 312,000 litres, sold for $87,360 There was no opening or closing inventory in the period and losses of raw material have no value. Required: For the period just ended: (a) Prepare the process account, showing both litres and value. (10 marks) (b) Prepare a statement showing the sales, joint costs and gross profit/(loss) of each product and in total. (5 marks) (Total 15 marks) Q3 A factory manufactures two main products. Product X has unit costs of production during a trading year as follows: $ Components 325 Labour 240 Production overheads 85 Distribution expenses 60 All the cost of the components varies directly with the number of units produced. 65% of the labour costs vary directly with the number of units produced. The production overheads do not vary with the number of units produced. 85% of the distribution expenses vary directly with the number of units produced. (a) Calculate: (i) the variable cost per unit (3 marks) (ii) the fixed cost per unit for the trading year. (3 marks) Product Y has fixed costs of $1,200,000 and variable costs per unit of $785 during a trading year. It is sold to wholesalers at $870 per unit. (b) Calculate: (i) the number of units that must be sold in order to break even (3 marks) (ii) the level of output required to provide a profit of $500,000. (3 marks) (Total 12 marks) 2/5

4 Section B (30%): Answer all the questions: COST ACCOUNTING Q4. The following information relates to a raw material stock item: Economic order quantity 800 units (established using the formula ) Demand 12,000 units per annum Cost of holding stock $1 50 per unit per annum What is the cost of placing an order? A $27 B $40 C $71 D $80 Q5. How is the activity (production volume) ratio calculated? A Actual hours budgeted hours B Budgeted hours actual hours C Standard hours for actual output actual hours D Standard hours for actual output budgeted hours Q6. A product has the following unit costs: Variable manufacturing $7 60 Variable non-manufacturing $1 40 Fixed manufacturing $3 70 Fixed non-manufacturing $2 70 The selling price of the product is $17 50 per unit What is the contribution/sales ratio? A 12 0% B 48 6% C 51 4% D 56 6% Q7. A company manufactures Chemical Z in a single process. No losses occur in the process. There was no work-in-progress at the start of a period during which 300 litres of raw material were input to the process. 250 litres of the finished chemical were output from the process in the period. The work-in-progress remaining was 100% complete with respect to materials and 50% complete with respect to conversion costs What were the equivalent units for closing work-in-progress at the end of the period? Material Conversion costs A 25 litres 25 litres B 25 litres 50 litres C 50 litres 25 litres D 50 litres 50 litres. 3/5

5 Q8. In an interlocking system, what would be the entry for the issue of indirect material from stock? Account debited Account credited A Material stock Production overhead B Material stock Work-in-progress C Production overhead Material stock D Work-in-progress Material stock. Q9. Which of the following is a calculation of the minimum inventory control level (buffer inventory)? A Re-order level minus average usage in average lead time B Re-order level minus maximum usage in maximum lead time C Re-order quantity minus maximum usage in maximum lead time D Re-order quantity plus re-order level minus minimum usage in minimum lead time Q10. A single-product business has the following results for a period: $ Sales revenue 268,000 (at $25 per unit) Less: variable costs 139,360 Contribution 128,640 Less: fixed costs 87,480 Net profit 41,160 What is the break-even point in units? A 3,499 B 7,290 C 8,645 D 9,074 Q11. The conversion costs in a process totalled $47,620 for a period. There was no opening work-in-progress. During the period 9,000 units of product completed production and a further 1,000 units remained, 60% complete. What was the conversion cost per unit (to 2 decimal places) in the period? A $4 76 B $4 96 C $5 07 D $5 29 Q12. 6,150 kilograms (kg) were input to a manufacturing process in a period during which output was 5,820 kg. The normal weight loss in the process is 10%. What was the abnormal gain/loss? A 285 kg abnormal gain B 285 kg abnormal loss C 330 kg abnormal gain D 330 kg abnormal loss 4/5

6 Q13. The purchases of an inventory item in a period were: Day Units Total cost ($) , ,125 There was no opening inventory. 700 units were issued on Day 15. The first-in first-out (FIFO) method is used. What is the valuation of the closing inventory? A $1,170 B $1,175 C $1,325 D $1, /5