o 8% G University of Venda UNIVERSITY OF VENDA MAIN EXAM NOV/DEC 2011 COURSE % COST AND MANAGEMENTACCOUNTING TITLE : INTRODUCTION TO COST AND MANAGEMENT ACCOUNTING CODE 3 ACC 2641 MARKS ; 100 EXAMINER = Mr. NDOU M.P INTERNAL MODERATOR : Mr. MASHAMBA R.F TIME: 3 HOURS INSTRUCTIONS: |. Answer all questions. Silent calculators may be used, Write neatly and legibly. Show all your calculations/workings.Question 1 (20 Marks) Per pair Unit variable data: Selling price R30.00 Cost of shoes R19.50 Sales commissions R150 Total variable costs R21.00 Annual fixed costs Rent R60 000 Salaries 200 000 Advertising R80 000 Other fixed costs R20 000 Total fixed costs R360 000 Required: (Consider each question independently) 3. Whats the annual breakeven point in (a) units, and (b) revenues? (4) 2. If 35 000 units are sold, what will be the store’: operating/loss? (4)50000 units were sold? (This R30 is in addition to both the commission paid to the sales Staff and the store manager's fixed salary.) (@ Question 2 (25 Marks) Information for the December 2011 financial Ye2r relating to Mint, a local manufacturer of chewable mints, is as follows: Actual sales 980.000 @ 40 cents per mint Actual number of mints produced in 2011. 909 000 mints: Consisting of: Direct materials-raw gum 900 kilograms @ R20.00 per kilogram Direct labour ~ wages 900 hours @ R50.00 per hour Variable manufacturing overheads 1.800 machine hours @ R30.00 per hour Budgeted fixed manufacturing overheads R90 000, Normal capacity 900 000 mints per annum Actual fixed manufacturing overheads 93.000, Opening inventory for 2011, 80.000 mints Consisting of: Direct materials — raw gum 80 kilograms @ R20.00 per kilogram Direct labour ~ wages 80 hours @ R50.00 per hour Variable manufacturing overheads 160 machine hours @ R30.00 per hour Fixed manufacturing overheads Z Fixed selling costs R25 000 Variable selling costs Scents per mint soldRequired: Using the information provided above: 4, Prepare the Statement of comprehensive income for Mint for the year ending 31 December 2011 on an absorption costing basis. (13) 2. Prepare the statement of comprehensive income for Mint for the year ending 31 December 2011 on a variable costing basis, (a2) Question 3 (28 Marks) avi Airconditioning Limited has the following available for the year ended 30 June 2010; Stock ~1 July 2009: Materials R800 000 Work-in-progress R600 000 Finished goods 600 units Materials purchased 1.200 000 Direct labour R900 000 Factory overheads (30 % variable) (excluding royalty) 1500 000 Selling expenses (10 % variable) R232 904 General and administrative expenses (15% variable) R300 000 ‘Stock ~ 30 June 2010 Materials R700 000 Work-in-progress R800 000 Finished goods 1.000 units Sales (12.000 units @ R350 per unit) Royalty payable for use of production patents (R15.00 per unit produced) Assume that finished goods are valued at current unit ‘manufacturing costs.Required: 1. Prepare the production cost statement. (a1) 2. Calculate the number of units manufactured and the unit manufacturing costs. (4) 3. Prepare a statement of comprehensive for the year ended 30 June 2010. 7) 4. Calculate the total variable costs and fixed costs (6) Question 4 (27 Marks) The following information pertaining to Muhali Limited for June 2011 is given below: Units Work-in process (opening) 50 % complete 24000 Units put into process 38000 Approved units completed 46 000 Work-in process (closing) 60 % complete 4000 Costs Work-in process (opening) Material R80 000, Conversion costs R28 000 Costs for June Materials R160 000 Conversion costs R120 000 Additional information: 1. The FIFO method for the stock valuation is used. 2. Normal wastage is 10 % of the units that reach the point of wastage, 3. Wastage takes place when the process is 50 % complete. Required: 1. Prepare the following statements for June 2.011: 1.1, Production statement. (12) 1.2. Product cost statement. (6) 1.3 Allocation statement. (20) Total Marks:100