ecomber 2008 Accounting Tehncian Examination 1. Hong Tat Food Company is & manufactur of canned food. The falling standard ‘material cost and labour cost fr making one unt offs best seling product ar a3 fas Dirt material - 0.3 hg at $30 parks Direct labour 0.2 nour at $40 per hour the time of purchese. REQUIRED: © (12 marks) Explain the benefits for the company to calculate the direct material price variance atthe time of purchase. (marke) Describe the possible reasons for the favourableladverse direct labour rate varlance and efficiency variance calculated in (a} above. (marie) (ota: 2 marks) Paper = Cost Acsentng, REQUIRED: (@) Calculate the estimated annual profit for the coming year withthe proposed change (©) For both the current year and the coming year wi feat: the break-even point n units and sales revenue: anc (i) themargia of satety ratio. (omarts) (€) Based on your calculations for (a) ane ( udvise whether the pr anges in the coming year are worthwhile or not. (4marts) (@) Calculate the vised unit ‘company wants to achieve a profit ‘Gesions ‘of $6,000,000 in the coming Selling price, romain vali, ‘lle the proposed changes, except the (3 maria) (Total: 20 marks) Page 3rcomber 2008 Aeccurtng Technica Exeminaton 3 Cont Secours [BR Kwong Ming Limited ie preparing ts monthly cash budget forthe fist quarter of 2008. The relevant datsis given boowe o 2 REQUIRED: Pronto a ont esh hud for Jann February and March 20, “ = (13 marks) (8) Find out the following outstanding balanoos as at 31 March 2008: (Amount due to suppliers; and {i) Amount due from credit customers, (6) Distinguieh between fixed and flexible budgets and discuss when flexi budgets required. 8 Decanter 2008 Accounting Technican Examination Paper 3~ Cast Accounting, Manufacturing Limited makes to products, P1 and P2. Osta forthe pas! period ows Products Pt Pe Production unis 2000 2,500, Direct costs per unit seo $200 Total machine hous 6.000 2,000 "200, 150 ‘00 300 0 150 REQUIRED: (2) Cateutate the unit production cost for each product if all production overheads are absorbed on a machine hou (6 marks) (b) Cafcutate the unit production cost for each product If activity based costing ich 1s applied. Show also the cost driver of the four ‘activities. (410 marks) (€) Compare and comment on the unit production costs calculated using the two ‘methods in (a) and (b) above. (amare) (Total: 20 marks) B85 i iPThe folowing details ‘ouput fom the process, the sales vale at the end of rst proses, further precassing costs and sales values afer frherprocoesing Product Outputinkg Sales value Further Sales value ftomthefest perk atthe processing per ig aftr wecess "endaf fist costs por kg further recess processing a 3.000 34 35 ‘20 8 32.000 310 35 520 e 20,000 7 7 315 REQUIRED: ® 3, to the nearest dollar, the total cost ofeach of Product A, B and C in ing the following bases for apportioning costs: ro) (6) Explain the features characterising those manufacturing industi process costing method will be applied. Give two examplos ‘manufacturing industries. (amas) (Tota: 20 marks) TEND OF EXAMINATION PAPER | Cosstane PagosaSECTION 8 (QUESTIONS) (0 marks) Bt. (@)()__Dkack mato! price variance: AQ" x SP Actua cost 5 2,000 $30 ~ $84,000 = 40008 (2 marks) “based on quantty purchased (®) Direct mata usage variance: SP «(60 —Aa") (2 marks) co) (2 marke) (0) Dec labour efitoncy variance: SR (SHAK) "= $40 "(02 5,000 1050) 82,0008. [ny 2,1 mark each) ‘The eset reasons forthe adverse cect labour efclency variance ae: (se of owe grade labour (i) Use of machines and equipment (i) deteriorated staf morale any 2,1 mark each (4 mars) (Totat: 20 marks) Spee 82) $000 Marks 2500 3) os 5) ps bs} 20,500 2000 (0.26) ps (05) 3.000 5000. (0.25) (marks) (0) Breakeven point and magi of safety: Soma year Uni sing price sea $300" 95% = $205 0,000 180,000 ~ 80% = 100,000 Unit contrbution $7,200,000 = 80,000 = $00 Fixed costs ‘Breakeven point in uns (80,000 30,000) = 80,000 100% = 6258 [1.5 marks} «© —<, rr(6) The evised uni seing price: Target orf Required sales revenue Spaced Te Pepe TAD econber 2008 Accounting Tecan Exaninion Paper 8 ~ Cost Accounting BS, (6)_Cesh budget for he pai from January to March 2009: January February March Marks % 3 5 pening balance 198.000 © 5.20 32452 (079 6.000 64.000 65.000 [1.8] “eal Payments Closing balancakbank overt Workings: (wt) Janway: $290,000 20% = 856,000 =<Paper Cost Aout ef 200 BON x 20% + 290,000 « 80% = (3 marks) ‘laned can be compared with a budget having the same level of euput [2a] (4 marks} (Total: 20 marks) BE. (2) Production overhead absoypton rate: '51860,000 + 600.000 + 60,000 + 70,000) + (6,600 + 2,000) = $160 per machine (marks) (©) cost arver rates: 5 Marks © (otal: 29 marke) Sg arDecember 2008 kecountng Tacnan Exton Peper = Cont escorting December 208 Accounting Tecnicen Examination 85. (=) (Physical unts basis o END OF SUGGESTED ANSWERS] (WH) A:814«8,000; 6: $10 * 12,000; c: $7 « 20,000 (tH) Not reaisatie value basis ) aT RE Pape aD ‘Saaeeced Aran Fags TTR