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Final Exam: Dual Degree Programme - DDP
Final Exam: Dual Degree Programme - DDP
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FINAL EXAM
Academic Year 2020-2021, Semester 2
Dual Degree Programme – DDP
Marking:
Section/Question First mark Second mark
Question 1 (20%)
Question 2 (20%)
Question 3 (20%)
Question 4 (20%)
Question 5 (20%)
Total (100%)
Conclusion
Instructions:
✓ Close book examination.
✓ Answer all of the questions.
✓ Begin each question on a fresh page.
✓ Cricle clearly the number of the choosen question.
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ANSWER ALL 5 QUESTIONS
Question 1 (20 marks)
Fast company produces three types of shoes, Mars, Jupiter and Mercury. Each type of shoe using 3 types of material
called M1, M2, M3. For the coming accounting period budgets are to be prepared based on the following
information.
Budgeted sales
Mars 2,000 at £100 each
Jupiter 4,000 at £120 each
Mercury 3,000 at £150 each
Budgeted usage of raw material
M1 M2 M3
Mars 4 3 2
Jupiter 3 - 2
Mercury 2 2 3
Cost per unit of material £4 £3 £3
Finished inventory budget
Mars Jupiter Mercury
Opening 400 700 700
Closing 500 900 800
Raw materials inventory budget
M1 M2 M3
Opening 21,000 10,000 16,000
Closing 18,000 9,000 12,000
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Question 2 (20 marks)
Genius also manufactures and sells Angel in the market, and the following information relates to the actual selling
price and actual cost of the product for the four weeks to 31 Dec 2019:
£000
Sales (50,000 units) 2,250
Direct materials (240,000 metres) 528
Direct labour (250,000 hours) 1,375
Variable production overhead 245
Fixed production overhead 650
2,798
Loss (548)
Genius Management Accountant estimated budgeted selling price and standard cost of each unit was as follows:
£
Selling price 60
Direct materials (5 metres) 10
Direct labour (4 hours) 24
Variable production overhead 5
Fixed production overhead 16
55
Budgeted profit 5
Total budgeted production: 40,000 units, budgeted
sales: 45,000 units
Requirement
1. Calculate the following variances: sales price variance, material price variance, material usage variance,
labour rate variance, labour efficiency variance, fixed overhead variance (15 marks)
2. Explain 2 reasons for labour rate variance and 3 reasons for labour efficiency variance (5 marks).
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Fixed production Overhead figure has been calculated on the basis of a budget normal output of 48,000
units per annum. The fixed production overhead incurred in Jan was $40,000.
Selling, distribution and administration expenses are:
Fixed $15,000 per month
Variable 10% of the sales value
The selling price per unit is $70 and the number of units produced and sold was
Jan (units)
Production 4,500
Sales 4,000
Required:
1. Prepare the absorption costing profit statement for Jan
2. Prepare the marginal costing profit statement for Jan
3. Reconcile the profits/loss between 2 methods
Required
a. Weighted-average method, assigning costs
Calculate cost per equivalent unit for direct materials and conversion costs, and assign total costs to units
completed (and transferred out) and to units in ending work in process.
b. FIFO method, equivalent units.
Suppose the Mixing Department uses the FIFO method of process costing instead of the weighted-
average method.
Required: Calculate cost per equivalent unit for direct materials and conversion costs, and assign total
costs to units completed (and transferred out) and to units in ending work in process.
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Question 5 (20 marks)
Lifefit Products sells running shoes and shorts. The following is selected per-unit information for these
two products
Shoes Shorts
Contribution 15 4
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