ACCA
Paper F2 and FMA
Management Accounting
December 2014 to June 2015
Interim Assessment – Answers
To gain maximum benefit, do not refer to these answers
until you have completed the interim assessment
questions and submitted them for marking.
ACCA F2 AND FMA: MANA GEME N T A CCO UN TING
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2
K A P LA N P UB L I S H I N G
IN TER IM ASSE SSMEN T AN SWERS
SECTION A
1
C
EOQ = √ ((2 × $30 × (5,000 × 4))/0.192) = 2,500 units
2
B and C
3
B
4
D
5
A
Materials inventory account
Opening inventory (balancing item)
9 Issued to production
Payables for purchases
150 Returned to suppliers
Returned to stores
4 Written off
Closing inventory
––––
163
––––
6
126
3
8
26
––––
163
––––
C
OAR = $176,400/3,600 = $49
Amount absorbed = $49 × 5,400 =
Actual overhead
Over absorbed
7
A
8
$160,000
$
264,600
(250,400)
––––––––
14,200
––––––––
Total cost per unit − Fixed cost per unit = Variable cost per unit
9
10
= $43 − (60% of $15)
= $34
Revenue − Variable costs
= ($50 × 10,000) − ($34 × 10,000) = $160,000
A
Overhead absorption rate
= $15,000/10,000 = $1.50 per unit
Overhead over-absorbed
= $12,470 – (9,400 × 1.50) = $1,630
B
KAPLAN P UBLI S H I N G
3
ACCA F2 AND FMA: MANA GEME N T A CCO UN TING
11
$3,000
The formula for calculating the fixed cost (a) using linear regression is given to you in the
exam:
a=
y bx
−
n
n
a=
20,000
500
− 10 ×
5
5
a = 4,000 – 1,000
a = 3,000
12
A
Variable cost per unit = $(189,125 – 169,750)/(11,500 – 9,000) = $7.75
13
$105,000
Input = Output + CWIP
10,000 = 7,000 + 3,000
EU
Output
CWIP
Total EU
Material
7,000
3,000
10,000
Conversion
7,000
1,800
8,800
Cost per EU
Material = 90,000/10,000 = $9
Conversion = 52,800/8,800 = $6
Value of output = (9 + 6) × 7,000 = $105,000
14
A
Marginal costing profit
2,000 × $0.5 =
Absorption costing profit
15
$
25,000
1,000
–––––––
26,000
–––––––
A
Idle time + General overtime = (15 hrs × $12) + ((10 hrs – 4 hrs) × $6) = $216
16
C
Re-order level to ensure that stockouts are avoided = 500 units × 2 weeks = 1,000 units
4
K A P LA N P UB L I S H I N G
IN TER IM ASSE SSMEN T AN SWERS
17
A
Average inventory = (2,000 units/2) + ((1,000 units – (300 units × 2 weeks)) = 1,400 units
18
$292
Cost per unit = (8,230 – 17)/(1,700 – 34) = $4.93
Description
Kg’s
Material
Labour
Overheads
1,700
–––––––
1,700
–––––––
Description
Abnormal loss
19
Kg’s
66
Process account
Total cost
Description
$
1,830
Normal loss
2,560
Output
3,840
Abnormal loss
–––––––
Kg’s
34
1,600
66
Total cost
$
17
7,888
325
–––––––
–––––––
8,230
1,700
8,230
–––––––
–––––––
–––––––
Kg’s
Total cost
$
Abnormal loss account
Total cost
Description
$
325
Scrap
Income statement
––––––
–––––––
66
325
66
––––––
66
33
292
––––––
325
A
Re-distribute maintenance: 60% to Assembly. (Ignore Admin as this is not a production
cost.)
OAR = ($90,000 + $6,000)/10,000 machine hours = $9.60
20
C
Working hours
Idle time
Total hours
21
A
22
B
80%
20%
––––
100%
210.0 hours
52.5 hours
––––––––––
262.5 hours × $7.50 = $1,968.75
Fixed cost
= $7,250
Variable cost
= 37 × 250 = $9,250
Total cost
= $16,500
KAPLAN P UBLI S H I N G
5
ACCA F2 AND FMA: MANA GEME N T A CCO UN TING
23
D
Total joint costs = 12,000 + 7,000 + 5,000 = $24,000
Total sales value
Product X = 3,000 × $7 = $21,000
Product Y = 9,000 × $5 = $45,000
Joint cost apportioned to Y = $24,000/(21,000 + 45,000) × 45,000 = $16,364
24
A and C
25
B
26
B
27
D
Order quantity = 750
Order cost
300×12/750×17.5
Holding cost 0.2×1.12×750/2
Purchase cost 300×12×1.12
Total cost
Order quantity = 1,000
84 Order cost
300×12/1,000×17.5
63
84 Holding cost
0.2×1.12×0.96×1,000/2
108
4,032 Purchase cost 300×12×1.12×0.96
3,871
–––––
–––––
4,200
4,042
–––––
–––––
Change in cost = $4,200 – $4,042 = saving of $158.
28
C
OAR = $375,000/15,000 = $25.00 per unit
Amount absorbed = $25.00 × 17,000
Actual overhead
Over-absorbed
6
$425,000
($418,000)
––––––––
$7,000
––––––––
K A P LA N P UB L I S H I N G
IN TER IM ASSE SSMEN T AN SWERS
29
D
Normal loss = 10% × 400 = 40 litres
Actual loss = 400 – 330 = 70 litres
Abnormal loss = 70 – 40 = 30 litres
EUs
Output
Normal loss
Abnormal loss
Material
330
0
30
––––
360
Conversion
330
0
18
––––
348
Cost per EU
Material = (400 × 8)/360 = $8.89
Conversion = 4,800/348 = $13.79
Valuation of output
330 × ($8.89 + $13.79) = $7,484
30
B
31
C
32
B
360/505 × 90 = 64°
33
A and C
34
C
OWIP + Input β = Output + CWIP
2,000 + 11,000 = 9,000 + 4,000
EU
OWIP to be finished
Start to Finish
CWIP
Total EU
KAPLAN P UBLI S H I N G
Material
0
7,000
4,000
11,000
Conversion
1,000
7,000
2,000
10,000
7
ACCA F2 AND FMA: MANA GEME N T A CCO UN TING
35
D
Cost per EU
Material = $10,461/11,000 = $0.951
Conversion = $24,700/10,000 = $2.47
Completed output
Completing OWIP = 1,000 × 2.47 =
Completed in period = 7,000 × (0.951 + 2.47) =
OWIP b/f costs =
Valuation =
8
$2,470
$23,947
$3,583
$30,000
K A P LA N P UB L I S H I N G
IN TER IM ASSE SSMEN T AN SWERS
SECTION B
1
ARMADILLO LTD
(a)
$7,000 × 50% + $8,000 × 20% + $7,000 × 30% = $7,200
(b)
$8,000 × 1.02 × 0.985 × 0.985 = $7,917
(c)
$2,000 + ($6,000 ÷ 12) = $2,500
(d)
($50,000 ÷ 20) + ($50,000 × 0.084 ÷ 12) = $2,850
ACCA Marking scheme
(a)
(b)
(c)
(d)
October receipt
November receipt
December receipt
Identification of November as amount to be paid
Correct application of inflation
Inclusion of wages
Calculation of monthly rent
Non-inclusion of depreciation
Calculation of monthly lump sum repayments
Calculation of interest
Total
KAPLAN P UBLI S H I N G
Marks
1
1
1
0.5
1.5
1
1
1
0.5
1.5
–––
10
–––
9
ACCA F2 AND FMA: MANA GEME N T A CCO UN TING
2
WELLYBOOT MANUFACTURING
(a)
Production budget
Sales volume
Less: Opening inventory
Add: Closing inventory
Production volume (units)
(b)
Blue boot
850
165
92
–––––
942
–––––
777
–––––
Red boot
1,250
365
270
–––––
1,520
–––––
1,155
–––––
Blue boot
Red boot
Raw material purchases budget (litres)
Production volume (units)
Material content per unit
Usage
Less: Opening inventory
Add: Closing inventory
777
7 litres
––––––
5,439
1,155
8 litres
––––––
9,240
Purchases – litres of material
(c)
Total
(litres)
14,679
(2,400)
3,162
––––––
15,441
––––––
Raw material purchases budget (cost)
Purchases 15,441 litres × £12 per litre = $185,292
(d)
Direct labour budget (standard hours)
Blue boot
Production volume (units)
777
1,155
Standard hours per unit
Standard hours produced
10
7,770
6
6,930
Total hours employed
Normal hours (30 × 37 hrs × 13)
Overtime hours
10
Red boot
Total
(hours)
––––––
14,700
14,430
––––––
270
––––––
K A P LA N P UB L I S H I N G
IN TER IM ASSE SSMEN T AN SWERS
(e)
Direct labour budget (cost)
Normal hours
Overtime
14,430 hours × $8/hr
270 hrs × $10/hr
Total direct labour cost
$
115,440
2,700
–––––––
118,140
–––––––
ACCA Marking scheme
(a)
(b)
(c)
(d)
(e)
Calculation of closing finished goods
Calculation of production requirement
Calculation of usage
Calculation of closing raw materials
Calculation of purchases in litres
Correct answer
Calculation of total hours
Calculation of overtime hours
Correct answer
Total
Marks
2
1
0.5
1.5
1
1
1
1
1
–––
10
–––
Note: allow follow through marks
KAPLAN P UBLI S H I N G
11
ACCA F2 AND FMA: MANA GEME N T A CCO UN TING
3
BAY CLEANING LTD
Variance
F/A
Actual
Flexed
budget
120,000
120,000
$
$
630,000
600,000
30,000 F
264,000
252,000
12,000 A
94,000
90,000
4,000 A
Power
83,500
82,000
1,500 A
Water
17,500
17,000
500 A
Other overheads
12,500
12,400
100 A
Production
40,000
35,000
5,000 A
Administration
30,000
27,500
2,500 A
Selling and distribution
31,000
30,000
1,000 A
––––––
––––––
57,500
54,100
Production and sales volume (drums)
Sales
$
Variable costs
Materials
Labour
Semi-variable costs
Fixed costs
Operating profit
––––––
3,400 F
ACCA Marking scheme
0.5 marks for each correctly entry
12
Marks
–––
10
–––
K A P LA N P UB L I S H I N G