JULY 2021 CONFIDENTIAL

UNIVERSITI KUALA LUMPUR BUSINESS SCHOOL

MID SEMESTER EXAM

JULY 2021 SEMESTER

SUBJECT CODE : EIB 30503

SUBJECT TITLE : MANAGEMENT ACCOUNTING

LEVEL : BACHELOR

TIME / DURATION : (2 HOURS )

INSTRUCTIONS TO CANDIDATES

1. Please read the instructions given in the question paper CAREFULLY.

2. This question paper is printed on both sides of the paper.

3. Answer ALL questions

THERE ARE THREE (4) PAGES OF QUESTIONS, EXCLUDING THIS PAGE.

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Question 1

a) Differentiate between internal and external users of accounting information

(4 marks)

(b) State any THREE (3) examples of internal users and THREE (3) external users of the
accounting information.

(6 marks)
(c) State the following items as Direct or Indirect cost and Fixed or Variable cost with respect to
the Production Department. Please provide your answer in both columns for each cost item.
Cost Item Direct or Fixed or
Indirect cost Variable

Salary of the production department manager who

oversees manufacturing in VolVot Car Factory
Wages paid to assembly line workers who mix water
ingredients in Soda Pop Factory
Utilities (water, electricity, waste) for the entire
warehouse in steel producing ompany
Cost of flour, eggs, and baking powder for baking
bread in Abu Bread Shop

(8 marks)

[18 marks]

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Question 2

Black Pink Company makes three main products using the same production methods and
equipment for each product. A traditional costing method is used at present, although an
activity-based costing (ABC) method is being considered. Details of the three products for a
typical period are given below:

Produc Labour hour/unit Machine hour/unit Material Cost/unit Units of productions

t
Star 0.5 hour 1.5 hours RM 20 750
Moon 1.5 hours 1.0 hour RM 18 1,250
Sun 1.0 hour 3.0 hours RM 28 7,000

Direct labour costs RM6 per hour and production overheads are absorbed on a machine hour
basis. The rate for the period is RM28 per machine hour. Further analysis shows that the total
of production overheads can be divided as follows:

Costs relating to set-ups 35%

Costs relating to machinery 20%
Costs relating to materials handling 15%
Costs relating to inspection 30%
Total production overhead 100%

The following activity volumes are associated with the product line for the period as a whole.
Total activities for the period:

Product Number of set-ups Number of material handling Number of inspections

Star 75 12 150
Moon 115 21 180
Sun 480 87 670
Total 670 120 1,000

Required:

(a) Calculate the cost per unit for each product using traditional costing method.
(6 marks)

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(b) Calculate the cost per unit for each product using activity-based costing method. (Round-
off the figures)
(14 marks)
[20 marks]

Question 3

Kiddy Inc. is a company that carries out jobbing work. One of the jobs carried out in
December was job 2525 to which the following information relates.

Direct 400 kilos were issued from stores at a cost of RM 8 per kilo
material Y
Direct 800 kilos were issued from stores at a cost of RM 5 per kilo. 60 kilo were
material Z returned to stores
Department 300 labour hours were worked of which 100 hours were overtime
P
Department 200 labour hours were worked, of which 100 hours were overtime
Q

Overtime work is not normal in Department P, where basic pay is RM 6 per hour plus an
overtime premium of RM 1 per hour. Overtime work was done in Department Q in December
because of a request by the customer of another job to complete his job quickly. Basic pay in
Department Q is RM 8 per hour and overtime premium is RM 1.50 per hour. Overhead is
absorbed at the rate of RM 3 per direct labour hour in both departments.

Required:
a) Calculate the direct materials cost of Job 2525
b) Calculate the direct labour cost of Job 2525
(23 Marks)
[23 Marks]

Question 4

TapauWare Sdn Bhd produces a food container that passes through two process which are
Process X and Process Y. The following data given for the month of January 2021:

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Process X Process Y
Materials (RM5 per kg) 7,500 Kg 5,000 Kg
Labour cost RM 600 RM 1,000
General Overhead cost RM 900 RM 855
Normal Loss 20% 10%
Scrap value per kg RM 4 RM 4
Actual output 5,750 Kg 10,000 Kg

Required:

(a) Prepare the process account for Process X and Process Y

(29 marks)

(b) Prepare the normal loss, abnormal loss or abnormal gain account. (if any)
(10 marks)
[39 Marks]

END OF EXAM PAPER