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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 soldRequired:
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