UNIVERSITI TUNKU ABDUL RAHMAN

ACADEMIC YEAR 2020/2021

JANUARY 2021 TRIMESTER

FINAL ASSESSMENT

UKAM3043 MANAGEMENT ACCOUNTING III

MONDAY, 26 APRIL 2021 TIME: 9.00 AM – 12.30 PM (3.5 HOURS)

BACHELOR OF ACCOUNTING (HONOURS)

Instructions to Candidates:

REMINDER: You are reminded to read and adhere to the Final Assessment
Instructions to Candidates that has been made available through the UTAR Portal before
the commencement of Final Assessment (FA). The detailed instructions for this FA are
as follows:

General

1. This Final Assessment (FA) is an Individual, time restricted assessment which

consists of THREE (3) questions. Question one carries 40 marks and Question two and
three carries 30 marks each.

2. You are required to answer ALL questions, and submit the ANSWER SCRIPT by
MONDAY, 26 APRIL 2021, 12.30PM

3. During the period of 3.5 hours of this FA, the examiner(s) can be reached at
(a). WBLE/ Microsoft Teams or Whatsapp
(b). Email: UKAM3043.FAM@utar.edu.my
You may use the above e-platform(s) to check with the examiner(s) if you need any
clarification on this FA question paper.

4. You may refer to any books, lecture notes, published materials, online resources etc.
when answering the questions. Proper referencing is necessary to avoid plagiarism.
The preferred referencing style is American Psychological Association (APA) /
Harvard / Chicago Manual. Candidates are reminded that Copy-and-Paste,
Consultation, Discussion and Sharing of Answers with others are STRICTLY
PROHIBITED in this FA.

This final assessment paper consists of 3 questions on 9 printed pages.

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UKAM3043 MANAGEMENT ACCOUNTING III

Answer Script File

5. The answer script MUST be a Microsoft Word file [Compulsory for text-based
submission to enable Turnitin Plagiarism Check] or opt for PDF and IMAGE file
[for non- text], in A4 size format. Note: Please keep the file size NOT exceeding
30MB per file.

6. Please check your Index Number generated by the Division of Examinations, Awards,
and Scholarships (DEAS). You MUST name your answer script file using the
following file name for submission:

UKAM3043 [subject code] FA AT [Programme Abbreviation] – 190xxxx [Your exam

index number] for submission.

For example, UKAM3043 -FA AT 1900000CBATF

Answer Script File Submission

7. Your answer script file has to be submitted to the following platform(s) before the
due time/date.
(a). Attach your answer script at WBLE, and
(b). Send your answer script to the course code email:

(UKAM3043.FAM@utar.edu.my)
Note: For the subject / title of your email, use the file name of your
answer script, i.e.,
UKAM3043 -FA AT 1900000CBATF

8. Please make sure you submit the correct, complete and final version of your answer
script and the same copy of answer script file is to be submitted to the above
platform(s). When multiple answer script files are received, the examiner will
randomly choose one for marking.

This final assessment paper consists of 3 questions on 9 printed pages.

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UKAM3043 MANAGEMENT ACCOUNTING III

Contents of Answer Script

9. The first page of your submission is the Final Assessment Cover Page. You
MUST use the template given and fill in the following information
 Your Programme (Abbreviation)
 Your Index Number
 Your Name
 Your Student ID

10. The second page of your submission is the Final Assessment Declaration
Statement. You MUST use the template given, and digitally sign on the form to
indicate the authenticity of your submitted work is without plagiarism.

11. Each question should be answered starting on a new page. It is recommended that
the answer should be within 10 to 15 pages.

12. For answer scripts that have text-based answers only, all texts MUST be typed and
recommended using Times New Roman characters with font size 12, with 1.5
spacing and alignment, except for the drawings and equations/calculations.

13. For answer scripts that require / contain drawings, equations and calculations with
short text descriptions, you can hand-write your answers on a blank paper, and then
use the scanner apps in your smartphone (Scanner Document, CamScanner, Adobe
Scanner etc.) to take scanned copy, or you can type if necessary and include the
scanned copy taken in the Word document, as part of your submitted answers.

14. Please include a page number on each and every page of your answer script. Ensure
that each page of answer scripts is in sequence prior to online submission.

WARNING OF PLAGIARISM

15. Answer scripts shall be uploaded to Turnitin to check for the originality of
submitted answers. In the case of suspected plagiarism, the evidence will be
submitted to the Examination Disciplinary Committee of the University.
Disciplinary action shall be taken against any candidate who is found to have
plagiarized in the answer submitted. Hence, candidates are reminded to abide by all
University Rules and Regulations and any instructions/guidelines relating to
examinations/assessments.

This final assessment paper consists of 3 questions on 9 printed pages.

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UKAM3043 MANAGEMENT ACCOUNTING III

Answer ALL the THREE (3) questions. [Total: 100 marks]

Q1. (a) Setia Trading Sdn. Bhd. is a fairly small trading division, owned by
manufacturer of potato chips and crackers, well known as Koo Crackers Bhd.
The company sells its product to restaurants, grocery shops and convenience
stores. The following is the performance report for Setia Trading Sdn. Bhd. in
February 2021:

F= Favourable variance and (A) adverse variance

Budgeted Actual Variance

Sales and production 25,000 28,724 3724 F
Volumes(units)
Sales Revenue (RM20 per RM500,000 RM603,225 RM103,225 F
packet)
Operating expenses RM RM RM
Variable operating expenses:
Sales commission (Standard 37,500 45,960 8,460 A
price: RM1.50 per packet sold)
Shipping expenses (Standard 50,000 54,578 4,578 A
price: RM2.00 per packet sold)
Bad debt (1% of credit sales) 4,000 5,127 1,127 A

Fixed operating expenses

Salaries 20,000 21,000 1,000A

Office rent 4,000 4,000 0

Depreciation 6,000 6,000 0

Advertising 2,000 2,800 800A

Telephone and internet 1,000 980 20F

Total operating expenses 124,500 140,445 15,945 A

This final assessment paper consists of 3 questions on 9 printed pages.

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UKAM3043 MANAGEMENT ACCOUNTING III

Question 1 (a). (Continued)

The manager of Setia Trading Sdn. Bhd. does not believe that the variance
calculated give a fair assessment of the company’s performance, when he
knew that the company had operated more efficiently in February than it had
in previous month. He thinks that budget figures are inappropriate and that the
flexed budget should be used to calculate the variances.

Required:

(i) Explain why budget versus actual performance reports are insufficient
for evaluating the performance of an investment centre. (6 marks)

(ii) Prepare a revised report for Setia Sdn. Bhd. and recalculate budget
variances. (12 marks)

(iii) The CEO of the Koo Crackers Bhd. puts unrelenting pressure on Setia
Trading Sdn. Bhd. managers to deliver growth. Each year the CEO sets
targets on how much each manager must increase his or her
department’s earnings in the coming year. He has set the budgets for
each and the managers’ performances have been measured against
their respective budgets even though they did not actively participate in
their preparation. The targets are coupled with a powerful incentive
system. If they meet or exceed these targets, managers are promised a
bonus that can be many times their salary. The goal for each manager
is to continually increase return on investment (ROI) and residual
income (RI) over time.

Identify the problems which appear to exist in budgetary control

system and explain how budgetary control system could be revised to
improve the effectiveness. (12 marks)

(b) Describe the balanced scorecard approach and explain TWO (2) non-
financial performance indicators that could be used by Setia Sdn.
Bhd. (10 marks)
[Total: 40 marks]

This final assessment paper consists of 3 questions on 9 printed pages.

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UKAM3043 MANAGEMENT ACCOUNTING III

Q2. Sejahtera Sdn. Bhd. has recently shut down its Klang factory which used to make
pillows, although all the inventories of raw materials and machinery are still there
awaiting disposal. A former customer, En. Kassim, just asked whether he could be
supplied with one last delivery of 500 pillows. You ascertain the following facts:

1. There is sufficient covering material in the inventory. This originally cost

RM600 but has a disposal value of RM 190.

2. There is sufficient stuffing material in the inventory. This originally cost RM

450. It was to have been shipped to the Shah Alam factory at a cost of RM80.
The Shah Alam factory would currently expect to pay RM500 for this
quantity.

3. Labour cost would be RM450.

4. A supervisor could be spared from the Shah Alam for the week needed to
produce the pillows. His normal salary for a month is RM1,600 and his taxi
fare and hotel bill in Klang would amount to RM135.

5. Two visits would need to be made by the site inspector to approve the
completed work. He is an independent contractor who is not employed by
Sejahtera Sdn. Bhd., and charges En. Kassim directly for the work. His cost is
RM 150 for each visit made.

6. Sejahtera Sdn. Bhd.’s system trainer would need to spend one day at the
company for delivering training. He is paid a monthly salary of RM 2,000 but
also receives commission of RM 125 for each day spent delivering training at
a client’s site.

7. Before the factory was closed, fixed overheads were absorbed at 200% of
direct labour cost.

8. 25 machine hours will be required. The machine to be used is already leased

for a weekly leasing cost of RM600. The machine has sufficient available
capacity for the order to be completed. The variable running cost of the
machine is RM7 per hour.

Required:

(a) Prepare a cost statement, using relevant costing principles, and calculate the
minimum cost that Sejahtera Sdn. Bhd. should charge for the order. Make
detailed notes showing how each cost has been arrived at and explain why
each of the costs above has been included or excluded from your cost
statement. (13 marks)

This final assessment paper consists of 3 questions on 9 printed pages.

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UKAM3043 MANAGEMENT ACCOUNTING III

Question 2 (Continued)

(b) Berjaya Sdn. Bhd. manufactures and sells a range of products. It is not
dominant in the market in which it operates and, as a result, it has to accept the
market price for each of its products. The company is keen to ensure that it
continues to compete and earn satisfactory profit at each stage throughout a
product’s life cycle. New management accounting techniques are often
described as contributing to cost reduction. Evaluate how the following
techniques able to reduce cost and illustrate your answer with at least one
example from any industry:

(i) Benchmarking (6 marks)

(ii) Kaizen Costing (5 marks)

(iii) Target costing (6 marks)

[Total: 30 marks]

Q3. (a) The following information is available in respect of the year ended 31
December 2019 and 2020:

Bersatu Bhd
Statement of Profit and Loss for the year ended December 31,
2019 and 2020

Year 2020 2019

RM RM
Sales revenue 858,000 803,000
Less: Cost of goods sold 513,000 509,000
Gross profit 345,000 294,000
Less: Operating expenses 244,000 237,000
Operating income 101,000 57,000

Less: Interest expenses 20,000 14,000

Income before income taxes 81,000 43,000
Less: Income taxes 33,000 17,000

Net Income 48,000 26,000

.Bersatu Bhd
Statement of Financial Position for the year ended December 31,
2019 and 2020
Year 2020 2019
Assets RM RM
Current Assets:
Cash 29,000 32,000
Account Receivable 114,000 85,000

This final assessment paper consists of 3 questions on 9 printed pages.

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UKAM3043 MANAGEMENT ACCOUNTING III

Question 3 (a). (Continued)

Inventory 113,000 111,000

Other current assets 6,000 8,000
Total current assets 262,000 236,000
Property, plant and equipment 507,000 399,000
Other non-current assets 18,000 9,000
Total assets 787,000 644,000
Liabilities
Current liabilities:
Accounts payable 73,000 68,000
Notes payable 42,000 27,000
Accrued Liabilities 27,000 31,000
Total current liabilities 142,000 126,000
Long term liabilities 289,000 198,000
Total liabilities 431,000 324,000

Stockholders’ Equity
Common stock 186,000 186,000
Retained earnings 170,000 134,000
Total stockholders’ equity 356,000 320,000

Total liabilities and equity 787,000 644,000

Required:

Calculate the following ratios for fiscal year 2019 and 2020 and interpret the results:

(i) Current ratio (2 marks)

(ii) Acid-test ratio (2 marks)

(iii) Working capital (2 marks)

(iv) Debt ratio (2 marks)

(v) Times Interest Ratio (2 marks)

(vi) Return on Net Sales (2 marks)

(vii) Gross profit % (2 marks)

This final assessment paper consists of 3 questions on 9 printed pages.

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UKAM3043 MANAGEMENT ACCOUNTING III

Question 3 (Continued)

(b) Divisionalised structures are normal in large firms, and occur even when
centralised structures would be feasible.

Required:

(i) Explain and discuss the arguments for divisionalised structures in large
firms. (5 marks)

(ii) Discuss the costs and potential inefficiencies of a divisionalised

structure. (5 marks)

(iii) Evaluate how adoption of a divisionalised structure changes the role of

top management and their control of subordinates. (6 marks)
[Total: 30 marks]

_______________________________________

This final assessment paper consists of 3 questions on 9 printed pages.