MINISTRY OF EDUCATION AND TRAINING
MANAGERIAL ACCOUNTING
NATIONAL ECONOMICS UNIVERSITY
Mode of study: Full time. Intake: 6x
School of Advanced Education Programs
Exam place: A2
Exam date: _/05/2023 Exam time: _
Version: 01
Allowed time: 90 minutes
Note: Closed book
You must submit workings for all numerical questions attempted; otherwise they will not be
marked. Credit will be given for your logic/method as well as the results of your calculations.
Question 1 (1.0 marks)
A production cost center charged budgeted overheads to cost units using a machine
hour rate based on the following estimates:
Total machine hours
1,000
Total oveheads
$15,000
A total of 982 machine hours were used and overheads incurred were $15,160.
Calculate the amount of over- or under-applied overhead for the period?
Prede OH rate = 15k / 1k = 15
Budgeted OH = 15 * 982 = 14,730
Budgeted OH < Actual OH => Underapplied by 15k – ans
1
Question 2 (1.5 marks)
Eban Wares is an investment center in a large corporation.
Selling price per unit
$32
Variable cost per unit
20
Fixed costs for period
$45,000
Budgeted sales for period
15,000 units
1. Compute the margin of safety % (1.0 marks).
2. The corporation’s minimum required rate of return on investment is 16% and the
average operating assets of this division is $40,000,000. Compute residual income
(0.5 marks).
BE sale = FC / (P – VCu) = xx
Actual sale = 32 * 15k = xxx
MOS% = (xxx – xx) / xxx
Rressi Inc = CTM – 0.16 x 40M
CTM = Actual Sale – TVC – CFC = ….
2
Question 3 (2.0 marks)
Shakespear Book Ltd has been formed to open a book shop in NEU.
1. Sales for 2020 are expected to be as follows: January $40,000, February $50,000,
March $70,000.
2. 90% of sales are for cash, the remainder of sales are on credit terms and collected
1 month later.
3. Inventory purchases are estimated to be 40% of sales each month purchased as
sales are made. Suppliers are paid one month in arrears.
4. 2 staff members will be employed at a cost of $5,000 a month which is paid in the
month incurred. Overheads are forecast to be $3,000 per month and paid one
month in arrears.
5. Rent is $36,000 per year payable annually in advance.
6. The Shop require minimum cash balance of $20,000. Assuming the beginning
cash balance of February is $22,000.
Prepare a cash budget for February, 2022.
Acc Rec
Jan
Feb
March
Sales
40k
50k
70k
1
36
2
4
45
3
4
5
63
7
Feb: Collection = 40k * 10% + 50k *90% =
Disbursement = 40% * 40k + 5k + 3k =
Rent is not recorded because no date
Financing = 0 if excess > borrowing
Dinhxa corp
Cash budget
For the month ended Feb 29
Beginning cash balance
Add: cash receipt:
Less: Cash disbursement
Excess of available cash over cash disbursement
Financing 0
Ending cash balance
3
Question 4 (2.0 marks)
Last year Fallon Company expected to sell 2,000 units. Budgeted variable selling
costs are sales commisions $12,000, traveling $6,000 and delivery $4,000. Fixed
selling expenses will consist of sales salaries $35,000, depreciation on delivery
equipment $7,000 and insurance on delivery equipment $1,000.
The actual sales last year were 1,950 units and selling expenses incurred last year by
Fallon Company are sales commisions $11,000, travel $5,100, delivery $3,450, sales
salaries $36,000, depreciation $7,000 and insurance $1,000.
Prepare a flexible budget performance report for last year.
12k:2k = commi u x 1950
6k:2k = travel u x x 1950
….
Mvu Group
Flexible Budget Report
For year the year ending last year
Budget
Sales
1950
VC
Commi
A
Tavel
B
Deli
C
FC
Sala Same with 2000
Depre
Insu
Total Manu
Cost
Actual
1950
Diff
F/U
11k
5,1
3,45
36
7
1
4
Question 5 (1.5 marks)
Alpha Cables Ltd manufactures electric cables for households. The company has capacity to
produce 16,000 units per month. However, the current plans call for monthly production and
sales of 10,000 units at $15 each. Cost per unit is $13, including:Direct materials $6.25;
Direct labor $3.75; Fixed manufacturing overheads $1.50; Variable selling expenses $0.25;
Fixed administrative expenses $1.25.
Should the company accept a special order for 6,000 units at $10.50 per unit?
Revenue
Cost
Net Income
Reject
Accept
0
0
0
6000*10.5
10.25 *6000
0.25 *6000
Netincome Decrease
or Increase
A
(b)
C
5
Question 6 (2.0 marks)
Presented below are data for Harmon Electrical Repair Shop for next year.
Time charge
Material loading charge
Total repair-technicians’ wages
$130,000
Fringe benefits
30,000
Overhead
20,000
80,000
The desired profit margin per labor hour is $10. The material loading charge is 40% of
invoice cost of parts and materials. Harmon estimates that 8,000 labor hours will be
worked next year.
1. Calculate the rate charge per hour of labor (1.0 marks).
2. If Harmon repairs a TV that takes 4 hours to repair and uses parts of $50,
compute the bill for this job (1.0 marks).
1. (130k + 30k + 20k) / 8,000 + 10$ =32.5
2. DL charge = 32.5*4 =
Material cost
Material Charge 50
Material loading charge 40%*50
Total material cost = …
Total price of labor and materials
6