SOUTHERN UNIVERSITY COLLEGE
SEMESTER B
YEAR 2021
FINAL EXAMINATION
BBAC2223 MANAGEMENT ACCOUNTING
DATE :
DURATION :
BACHELOR IN ACCOUNTING (HONOURS)
YEAR TWO
Instruction to Candidates :
1)
2)
3)
4)
5)
The question paper consists of 4 compulsory questions covering 5 pages.
Answer all questions.
Return the question paper with your answer booklet.
All workings must be shown and clearly labelled.
Answers should be illustrated with examples, where appropriate.
This question paper consists of 4 questions on 5 printed pages.
2
BBAC2223 MANAGEMENT ACCOUNTING
Q1.
Pokcon Company will commence trading on 1 June with a capital of RM380,000 in
the bank. The following estimates have been made:
1) Equipment costing RM240,000 will be purchased and installed prior to
commencement of the business. The equipment will be paid for in June and
will be depreciated on a straight line basis over eight years with no expected
disposal value.
2) On 1 June an initial stock of goods will be purchased, for RM110,000 payable
in July. All goods sold from 1 June will be replaced immediately. Purchases
will be on two months credit.
3) Gross profit will be 33 ⅓% on the cost of the goods.
4) Forecast sales for the first three months are:
June
July
August
RM
100,000
120,000
160,000
Sales will be on credit, payable in the month following sales.
5) Rent and rates, of RM42,000 for twelve months from 1 June, will be paid in
July.
6) 50% Wages and other overheads, commencing in June, are estimated at
RM48,000 per month. 50% will be paid in the month incurred with the balance
payable in the following month.
Required:
a) Calculate the cost of goods sold for each of the three months June, July and
August.
(6 marks)
b) A cash budget for each of the three months June, July and August.(11 marks)
c) A budgeted Profit & Loss Account for the three months in total ended in 31
August.
(8 marks)
[Total : 25 marks]
Q2.
Neelaflex Company operates a standard costing system for the single product which
it manufactures and sells.
This question paper consists of 4 questions on 5 printed pages.
3
BBAC2223 MANAGEMENT ACCOUNTING
Q2. (Continued)
The following standards and budgets set for September 2020.
Selling price
Direct material
Direct labour
Fixed overheads
Budgeted production and sales quantity
RM230 per unit
5 kg x RM18.20 per kg
4 hours x RM17.00 per hour
RM8.225 per direcdt labour hour
3800 units
The actual results for September 2020 were as follows:
Production and sales quantity
Sales revenue
Direct material
Direct labour
Fixed overheads
4040 units
RM882,740
22,600 kg costing RM402,280
15,352 hours costing RM274,033
RM122,816
Required:
a) Calculate standard profit per unit
(4 marks)
b) Calculate sales price variance & sales volume-profit variance
(4 marks)
c) Calculate direct material usage & direct material price variances (4 marks)
d) Calculate direct labour efficiency & direct labour rate variances (4 marks)
e) Calculate fixed overhead expenditure, fixed overhead volume-efficiency &
fixed overhead volume-capacity variances
(6 marks)
f) Explain the meaning of the term “ standard hour”
Q3.
(3 marks)
[Total : 25 marks]
Amilon Company manufactures three types of cosmetics: toner, foundation and
primer. Machine and labour time available are 1000 hours and 900 hours
respectively for each month.
This question paper consists of 4 questions on 5 printed pages.
4
BBAC2223 MANAGEMENT ACCOUNTING
Q3. (Continued)
Selling price
Variable cost
Toner
(RM
per unit)
330
210
Foundation
(RM
per unit)
254
170
Primer
(RM
per unit)
215
160
5
2
300
2
1
120
1
0.5
100
Machine time in hours
Labour time in hours
Demand in units
Fixed overhead is incurred at RM11,200 a month.
Required:
a) Determine the limiting factor of the company.
(5 marks)
b) Calculate the contribution per limiting factor for each product and indicate the
profit ranking.
(9 marks)
c) Calculate the optimum production schedule of each product to maximise
budgeted profit for the month.
(6 marks)
d) Calculate the maximise budgeted profit for the month.
Q4.
(5 marks)
[Total : 25 marks]
Rockwell Company is proposing to purchase a new machine to manufacture an
additional new product. It estimates that:
1) The capital investment cost will be RM100,000.
2) The scheme would require an investment of RM60,000 in working capital.
3) During the 4-year life:
Product sales in units
Variable cost per unit
Selling price per unit
Year 1
Year 2 Year 3 Year 4
1700
1800
2300
2400
RM
30
58
RM
30
69
RM
28
69
This question paper consists of 4 questions on 5 printed pages.
RM
27
72
5
BBAC2223 MANAGEMENT ACCOUNTING
Q4. (Continued)
4) If the new machine is purchased, an existing product, which gives an annual
contribution of RM16,000 will have to be withdrawn.
5) The new machine will have a 4-year life and will be depreciated on the sum of
the digits method.
6) The extract present value table given below:
15%
The present value of RM1 at:
Year 1
2
3
4
0.869
0.756
0.657
0.571
30%
0.769
0.591
0.455
0.350
Required:
Calculate for the proposal to purchase the new machine:
a) The net cash flows from year 1 to year 4.
(9 Marks)
b) The net present value (NPV) at a 15% discount rate.
(6 Marks)
c) The profitability index (PI) at a 15% discount rate.
(4 Marks)
d) The internal rate of return (IRR).
(6 Marks)
[Total : 25 marks]
_______________________________
This question paper consists of 4 questions on 5 printed pages.