Prof. Dr.

Christian Ott
Juniorprofessur für Controlling und Management
Sample exam
Management Accounting
Summer term

Task and solution sheets

Please fill out the fields below!

Family name Given name Matriculation number

Please note the following:

• The task sheets include 13 pages including cover sheet. Please do not open the clip!
• The exam consists of 4 tasks which are to be solved all.
• You can achieve a maximum of 120 points in this exam.
• You have 120 minutes for this exam.
• Please provide your answers to the different tasks only in the solution sheets! Only your
answers in the solution sheets are evaluated. Answers in the task sheets are not eval-
uated. Please write your matriculation number on each solution sheet!
• Only a non-programmable calculator without text storage and without financial func-
tions has been approved as an aid for this exam.
• Please note that a comma (“,”) is to be used as a separator for thousands and
a dot (“.”) as decimal separator.

Good luck!
Task 1 (30 points)

Task 1 (30 points)

Task:
Assess whether the following statements are true or false! You receive 1 point for each cor-
rectly classified statement.

No Statement
1

10

11

12

13

14

15

Prof. Dr. Christian Ott -2- Sample exam

Task 1 (30 points)

No Statement
16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

Prof. Dr. Christian Ott -3- Sample exam

Solution sheet for Task 1 (30 points)

Solution sheet for Task 1 (30 points)

for each correctly classified statement

for each incorrectly classified statement

No True False No True False

1 16

2 17

3 18

4 19

5 20

6 21

7 22

8 23

9 24

10 25

11 26

12 27

13 28

14 29

15 30

Prof. Dr. Christian Ott -4- Sample exam

Solution sheet for Task 2 (30 points)

Solution sheet for Task 2 (30 points)

a) Manufacturing cost per ton LIFO FIFO

Processed raw material EUR per ton EUR per ton

Raw meal EUR per ton EUR per ton

Clinker EUR per ton EUR per ton

Cement EUR per ton EUR per ton

b) Total cost per ton LIFO FIFO

Cement EUR per ton EUR per ton

c) Ending inventory in tons LIFO FIFO

Processed raw material tons tons

Raw meal tons tons

Clinker tons tons

Cement tons tons

d) Ending inventory in EUR LIFO FIFO

Processed raw material EUR EUR

Raw meal EUR EUR

Clinker EUR EUR

Cement EUR EUR

Prof. Dr. Christian Ott -7- Sample exam

Task 2 (30 points)

Tasks:

Please round your results to two decimal places!

a) The company is interested in switching from LIFO to FIFO. What are the manufacturing
costs per ton of the products of the different production stages using LIFO or FIFO?

Regardless of your previous results, please use the following information:

Total manufacturing costs for 6,000 tons of cement
EUR 120,000
in the last month

b) What are the total cost per ton of cement using LIFO or FIFO? The selling & adminis-
trative costs of EUR 19,200 are incurred. The sales quantity amounts to 5,000 tons of
cement.
c) What are the ending inventories in tons of the products of the different production stages
using LIFO or FIFO?

Regardless of your previous results, please use the following information:

Product Processed Raw meal Clinker Cement
raw material
Ending inventory in tons 15,000 tons 0 tons 1,000 tons 3,000 tons
Manufacturing costs per ton in the EUR 5 / ton EUR 7.5 / ton EUR 16,5 / ton EUR 35 / ton
last month using FIFO
Manufacturing costs per ton in the EUR 5 / ton EUR 7.5 / ton EUR 16,5 / ton EUR 35 / ton
last month using LIFO

d) What are the ending inventories in EUR of the products of the different production
stages using FIFO or LIFO?

Prof. Dr. Christian Ott -6- Sample exam

Task 2 (30 points)

Task 2 (30 points)

The company ZEMROCK INC. produces cement in a multistage production process. For
the last month, the following cost information is available. ,

Production stage (I): Mining and processing

In this first production stage, the company extracts and processes 30,000 tons of raw
material. Costs incurred are EUR 120,000.
Inventory of processed raw material at the beginning of the last month: 10,000 tons of
processed raw material valued at EUR 4.60 per ton.

Production stage (II): Raw meal

25,000 tons of processed raw material are ground to the required fineness in the raw mill
and are simultaneously dried. Thus, 20,000 tons of raw meal are produced. In this second pro-
duction stage, direct labor costs of EUR 24,000 and indirect labor costs of EUR 16,000 are
incurred.
Inventory of raw meal at the beginning of the last month: 0 tons of raw meal.

Production stage (III): Clinker

The hot phase of cement production begins in the preheater and rotary kiln. 10,000 tons
of clinker are produced by burning 20,000 tons of raw meal in the preheater and rotary kiln at
a temperature of about 1,450 °C. Then, the clinker is cooled in a clinker cooler. In this third
production stage, costs of EUR 20,000 are incurred.
Inventory of clinker at the beginning of the last month: 0 tons of clinker.

Production stage (IV): Cement

By adding gypsum, 9,000 tons of clinker are milled in a wet ball mill into 6,000 tons
cement. EUR 10,000 are incurred for the addition of gypsum. Direct labor costs are EUR 12,000
and indirect labor costs are EUR 14,000 in this fourth production stage.
Inventory of cement at the beginning of the last month: 2,000 tons of cement valued at
EUR 32.00 per ton.

In the last month, the ZEMROCK INC. sold 5,000 tons of cement.

Prof. Dr. Christian Ott -5- Sample exam

Task 3 (30 points)

Task 3 (30 points)

ROCKING CHAIR WORKSHOPS LLC manufactures seatings to match in a timeless design

fitting naturally into modern interiors. The company has three service cost centers Steam gen-
eration, Maintenance and Buildings/Property as well as in five main cost centers Assembly I,
Assembly II, Material, Administration and Sales. The management accountant Olaf Throne
collected the following information on the service relationships between the different cost cen-
ters:

Services provided by the cost centers

Buildings/
Steam generation Maintenance
Property
Fixed and variable indirect costs of the EUR 20,000 EUR 100,000 EUR 40,000
cost centers before reallocation
Total amount of services provided 60,000 m 1,500 hours (h) 11,300 m
Services received by the service cost centers
Steam generation fixed - 150 h 50 m
variable - 50 h 50 m
Maintenance fixed 50 m - 100 m
variable 150 m - 100 m
Buildings/Property fixed 25 m 225 h -
variable 75 m 75 h -
Services received by the main cost centers
Assembly I fixed 6,250 m 375 h 2,000 m
variable 18,750 m 125 h 2,000 m
Assembly II fixed 8,500 m 375 h 3,000 m
variable 25,500 m 125 h 3,000 m
Material fixed 75 m - 250 m
variable 225 m - 250 m
Administration fixed 50 m - 150 m
variable 150 m - 150 m
Sales fixed 50 m - 100 m
variable 150 m - 100 m

Prof. Dr. Christian Ott -8- Sample exam

Task 3 (30 points)

Tasks:

Please round your results to two decimal places!

a) Which of the three (re)allocation methods – Step allocation method, Simultaneous equa-
tion method or Direct allocation method – provides the most accurate results with re-
spect to the cause-and-effect criterion? Please mark the most accurate method with the
number 1 and the least accurate method using the number 3!
b) Calculate the allocation rates for the reallocation of service cost center costs to main
cost centers based on the step allocation method in an absorption costing system. The
indirect costs are reallocated from the service cost centers to the main cost centers in the
following order: (1) Steam generation – (2) Maintenance – (3) Buildings/Property.

Regardless of your previous results, please use the following information:

Buildings/
Service cost centers Steam generation Maintenance
Property
Share of fixed costs 25 % 75 % 50 %

c) Calculate the allocation rates for the reallocation of service cost center costs to main
cost centers based on the step allocation method in a variable costing system. The indi-
rect costs are reallocated from the service cost centers to the main cost centers in the
following order: (1) Steam generation – (2) Maintenance – (3) Buildings/Property.

Regardless of your previous results, please use the following information:

Buildings/
Service cost centers Steam generation Maintenance
Property
Allocation rates in an absorption cost-
EUR 0.5 / m EUR 75 / h EUR 5.75 / m
ing system

d) Compute the sum of indirect costs reallocated to the main cost centers based on the
given allocation rates using absorption costing?
e) Prepare the system of equations for determining the allocation rates for the realloca-
tion of service cost center costs to production cost centers based on the simultaneous
equation allocation method in a variable costing system!

Prof. Dr. Christian Ott -9- Sample exam

Solution sheet for Task 3 (30 points)

Solution sheet for Task 3 (30 points)

a) Step allocation method

Simultaneous equation method

Direct allocation method

b) Step allocation method (absorption costing)

Steam generation EUR per m

Maintenance EUR per hour

Buildings/Property EUR per m

c) Step allocation method (variable costing)

Steam generation EUR per m

Maintenance EUR per hour

Buildings/Property EUR per m

d) Indirect costs reallocated to the main cost centers

Assembly I EUR

Assembly II EUR

Material EUR

Administration EUR

Sales EUR

e) Simultaneous equation method (variable costing): System of equations

Steam gen. x1 + x2 + x3 =

Maintenance x1 + x2 + x3 =

Build./Prop. x1 + x2 + x3 =

Prof. Dr. Christian Ott - 10 - Sample exam

Solution sheet for Task 4 (30 points)

Solution sheet for Task 4 (30 points)

a) Equivalence numbers

Height 2.6 m 3.25 m 3.90 m

Equivalence number
Base area 60 m2 72 m2 90 m2 120 m2
Equivalence number

b) Combined equivalence numbers

Height
Base area 2.6 m 3.25 m 3.90 m
60 m2
72 m2
90 m2
120 m2

c) Apartment with 60 m2 and a height of 2.6 m

Manufacturing cost per apartment EUR

Administrative costs per apartment EUR

d) Total costs per unit for each type of apartment

Height
Base area 2.6 m 3.25 m 3.90 m

60 m2 EUR EUR EUR

72 m2 EUR EUR EUR

90 m2 EUR EUR EUR

120 m2 EUR EUR EUR

Prof. Dr. Christian Ott - 13 - Sample exam

Task 4 (30 points)

Task 4 (30 points)

The housing association SLUMLORD INC. lets apartments in Berlin. The monthly cost of
apartments (depreciation, interest, heating, repair, etc.) in total amount to EUR 181,500 which
are allocated based on equivalence numbers. The combined equivalence number reflects both
the base area and height of an apartment. In addition, administrative costs incurred are EUR
29,250, which are evenly distributed across all the apartments.

Categories Mean Equivalence number

2 2
Base area 55 - 65 m 60 m 1
65 - 80 m2 72 m2
80 - 100 m2 90 m2
100 – 140 m2 120 m2
Height Up to 3 m 2.6 m 1
3 m to 3,5 m 3.25 m
3,5 m to 4 m 3.90 m

Number of apartments
Height
Base area 2.6 m 3.25 m 3.90 m
2
60 m 25 15 -
72 m2 20 50 -
2
90 m 40 10 20
120 m2 60 20 40

Prof. Dr. Christian Ott - 11 - Sample exam

Task 4 (30 points)

Tasks:

Please round your results to two decimal places!

a) What is the equivalence number for each type of apartment (apartment with a mean base
area of 60 m2 as reference or with a mean height of 2.6 m as reference)?

Regardless of your previous results, please use the following information:

Height 2.6 m 3.25 m 3.90 m

Equivalence number 1 1.25 2
2 2 2
Base area 60 m 72 m 90 m 120 m2
Equivalence number 1 1.3 1.7 2

b) What is the combined equivalence number for each type of apartment?

Regardless of your previous results, please use the following information:

Height
Base area 2.6 m 3.25 m 3.90 m
2
60 m 1 1.2 1.5
72 m2 1.2 1.44 1.8
2
90 m 1.5 1.8 2.25
120 m2 2.0 2.4 3.0

c) What are the manufacturing costs and the administrative costs of an apartment with
60 m2 and a height of 2.6 m?

Regardless of your previous results, please use the following information:

Apartment with 60 m2 and a height of 2.5 m

Manufacturing costs per apartment EUR 330
Administrative costs per apartment EUR 97.5

d) What are the total costs per unit for each type of apartment?

Prof. Dr. Christian Ott - 12 - Sample exam

Solution of Task 2 (30 points)

Solution of Task 2 (30 points)

a) Manufacturing cost per ton LIFO FIFO

Processed raw material 4.00 EUR per ton 4.00 EUR per ton

Raw meal 7.00 EUR per ton 7.30 EUR per ton

Clinker 16.00 EUR per ton 16.60 EUR per ton

Cement 30.00 EUR per ton 30.90 EUR per ton

b) Total cost per ton LIFO FIFO

Cement 23.84 EUR per ton 28.64 EUR per ton

c) Ending inventory in tons LIFO FIFO

Processed raw material 15,000 tons 15,000 tons

Raw meal 0 tons 0 tons

Clinker 1,000 tons 1,000 tons

Cement 3,000 tons 3,000 tons

d) Ending inventory in EUR LIFO FIFO

Processed raw material 71,000 EUR 75,000 EUR

Raw meal 0 EUR 0 EUR

Clinker 16,500 EUR 16,500 EUR

Cement 99,000 EUR 105,000 EUR

Prof. Dr. Christian Ott - 14 - Sample exam

Solution of Task 3 (30 points)

Solution of Task 3 (30 points)

a) Step allocation method 2

Simultaneous equation method 1

Direct allocation method 3

b) Step allocation method (absorption costing)

Steam generation 0.33 EUR per m

Maintenance 76.97 EUR per hour

Property/Building 5.74 EUR per m

c) Step allocation method (variable costing)

Steam generation 0.25 EUR per m

Maintenance 19.26 EUR per hour

Property/Building 1.95 EUR per m

d) Indirect costs reallocated to the main cost centers

Assembly I 73,000 EUR

Assembly II 89,000 EUR

Material 3,025 EUR

Administration 1,825 EUR

Sales 1,250 EUR

e) Simultaneous equation method (variable costing): System of equations

Steam gen. 60,000 x1 + - 50 x2 + - 50 x3 = 15,000

Maintenance - 150 x1 + 1,500 x2 + -100 x3 = 25,000

Build./Prop. -75 x1 + -75 x2 + 11,300 x3 = 20,000

Prof. Dr. Christian Ott - 15 - Sample exam

Solution of Task 4 (30 points)

Solution of Task 4 (30 points)

a) Equivalence numbers

Height 2.6 m 3.25 m 3.90 m

Equivalence number 1 1.25 1.5
Base area 60 m2 72 m2 90 m2 120 m2
Equivalence number 1 1.2 1.5 2

b) Combined equivalence numbers

Height
Base area 2.6 m 3.25 m 3.90 m
60 m2 1 1.25 2
2
72 m 1.3 1.63 2.6
90 m2 1.7 2.13 3.4
2
120 m 2.0 2.5 4.0

c) Apartment with 60 m2 and a height of 2.6 m

Manufacturing cost per unit EUR 330

Administrative costs per unit EUR 97.50

d) Total costs per unit for each type of apartment

Height
Base area 2.6 m 3.25 m 3.90 m
2
60 m EUR 427.50 EUR 493.50 EUR 592.50
72 m2 EUR 493.50 EUR 572.70 EUR 691.50
2
90 m EUR 592.50 EUR 691.50 EUR 840
120 m2 EUR 757.50 EUR 889.50 EUR 1,087.50

Prof. Dr. Christian Ott - 16 - Sample exam