MOCK AA025 SET 1

QUESTION 1
a. POR 250000 X 100
200000
125%

b. Cost Job A Job B Job C

Direct 140000 120000 345000

material
Direct 34000 63000 85000
labour
Applied 42500 78750 106250
overhead
Total 216500 261750 536250

* 125% X 125% X 125% X

34000 63000 85000

c. Job C
Direct 345000
material
Direct 85000
labour
* Applied 106250
overhead
Total 536250

d. Applied 42,500 + 78,750 +106,250

overhead
227500
Actual 235000
overhead
Under (7500)
applied
e. Accounts Debit Credit
(RM) (RM)
Cost of 7500
Goods
Sold
Manufacturing overhead 7500
(To record underapplied overhead)
f. Job A
RM
Total cost 216500
Production 866
unit
Cost/unit 250

Cost of
goods sold
for 150
units
(150 x 37500
250)
Sales
revenue
for 150
units
160% x 60000
RM37500

Accounts Debit Credit

(RM) (RM)
Cost of 37500
Goods
Sold
Finished Goods 37500
Inventory
(To record cost of
goods sold)
Cash 60000
Sales 60000
(To record sales
revenue)
QUESTION 2
GROOVING ASSEMBLING
2000+12000-11000 3800+11000-
a EWIP = 3,000 12500 = 2,300

b EU (DM 0 12500+2300 = 14,800

12500+2300*70%
EU (CC) 11000+3000*60% = 12800 = 14110
EU (TIC) 11000+3000= 14,000 12500+2300 = 14,800

C/EU
c (DM) 0.00
C/EU
(CC) 360+2200/12800 = RM0.20
C/EU
(TIC) 240+3260/14000 = RM0.25
RM0.45

d TOC 11000*0.45 = RM4,950

EWIP
(CC) 3000*60%*0.20 = RM360
EWIP
(TIC) 3000*0.25 = RM750

RM1,110

e dr WIP - Grooving RM5,460

cr WIP- Slating RM3,260
cr Salaries / wages payable(20%*2200) RM440
cr MOH(2200-440) RM1,760

dr WIP - Assembling RM4,950

cr WIP - Grooving RM4,950
QUESTION 3

(a)
(a) Cost product per unit
Marginal Absorption
Dir Mat 5 5
Dir Lab 3 3
Var MOH 4 4
Fixed MOH - 2.8
(44,800/16,000)
TOTAL 12 14.80

(b)
KAE BEE Company
Income Statement - Marginal Costing
For the month ended 31 st March 2022
RM RM
Sales (12,000 unit x RM 20) 240,000
Deduct : Var. Cost
Beg Inv 0
COGM ( 16,000 unit x RM 12 ) 192,000
192,000
End. Inv ( 4,000 unit x RM 12) (48,000)
Var COGS 144,000
Add : Var Admin and Selling (12,000 x RM2) 24,000
Var Cost 168,000
Contribution Margin 72,000
Deduct :
Fixed MOH 44,800
Fixed Admin and Selling 31,000 75,800
Net Loss 3,800

(c)
RM
Net Profit Marginal Costing (3,800)
+Fixed MOH in end inv (4,000 unit x RM 2.80) 11,200
- Fixed MOH in Beg Inv 0
Net Profit Absorption Costing 7,400
 (b)
a) Price Var = (RM10.60 X RM10) 40,000
= RM24,000 (UF)
Quantity Var = [(15mx2,500) -37,000] RM10
= RM5,000 (F)

b) Price Var Dir Lab = (RM13.40 - RM14) 21,000

= RM12,600 (F)
Efficiency Dir Lab = [(8x2,500) - 21,000] RM14
= RM14,000(UF)

c) Expenditure Var OH Var = RM228,000 – (RM10x21,000)

= RM18,000 (UF)
Efficiency Var OH Var = [(8x2,500) -21,000] RM10
= RM10,000(UF)

QUESTION 4 (20 marks)

(a) Net Income

Increase
Make Buy (Decrease)

Relevant cost of making:

Direct materials (50,000X RM2.50) 125,000 0 125,000
Direct labour (50,000XRM4.00) 200,000 0 200,000
Variable manufacturing overhead
(50,000XRM2.40) 120,000 0 120,000
Avoidable fixed manufacturing overhead
(10%XRM25,000) 2,500 0 (2,500
Relevant cost of buying:
Purchase price (50,000XRM9.50) 0 475,000 (475,000)
Total annual cost 447,500 475,000 (((((27,500)
*60% X RM4.00 = RM2.40

Basoom Co. should not buy the chips, because it will decreased the net income by RM27,500

(b)
Net Income
Increase
Make Buy (Decrease)

Total annual cost (above) 447,500 475,000 (27,500)

Opportunity cost 40,000 0 40,000)
Total cost 487,500 475,000 12,500
Basoom Co. should buy the chips, because it will increased the net income by RM12,500