KOLEJ MATRIKULASI PERLIS

GROUP ASSIGNMENT
CONTINUOUS ASSESSMENT
ACCOUNTING 2
AA025
SEMESTER 2
INTAKE 2021
PREPARED FOR:
PUAN ROSLIZA BINTI ISMAIL
PREPARED BY:
NAME OF GROUP MEMBERS CLASS MATRIC NUMBER
LUQMAN NUR HAQIM BIN NURULIZAT A9T1 MA2114111045
MUHAMMAD FARIS BIN ABDUL RAHMAN A9T1 MA2114112220
PUTERA
A9T1 MA2114111885
A9T1 MA2114111898

SUBMISSION DATE: _________________________

CHAPTER MARKS
CHAP 2
CHAP 3
CHAP 4
TOTAL
 a) Total Manufacturing Cost

RM RM
Direct Material Cost 8300
Direct Labour 3000
Manufacturing Overhead 4000
Total Manufacturing Cost (a) 15300

B)Ending work in process inventory

RM RM
Total Manufacturing Cost 15300
(+) Beginning work in process 1000
inventory
(-)Cost of goods (12800)
manufactured
Ending work in process (b) 3500

C) Beginning Finished Goods inventory

Cost of goods available for sale 17800

(-) Cost of goods manufactured (12800)
Beginning Finished Goods ( c )4500
inventory

D)Cost Of Goods Sold

Beginning Finished Goods 4500

Inventory
(+)Cost of Goods 12800
Manufactured
Cost of goods available for sale 17300
(-)Ending finished goods (1200)
inventory
Cost of goods sold (c) 16,100

e) Gross Profit

Gross Profit 21500

(-) Operating Income (16,100)
Net Income €5400
f) Net Income

Gross Profit 5400

(-)Operating Expenses (2700)
Net Income (f)2700

(g) Direct Material Used

Total Manufacturing Cost 22000

Direct Labour (4000)
Manufacturing Overhead (5000) (9000)
Direct Material Used (g) 13,000

(h)Beginning work in process

Cost of goods manufactured 21000

(+)Ending Work in process 2000
inventory
(-)Total Manufacturing Cost (22000)
Beginning work in process (H)1000

(i)Sales

Gross Profit 6000

Cost Of Goods Available For 25000 (31000)
Sale
(-)Total Manufacturing Cost (2500)
(i) 28500

(k) Cost of Goods Sold

RM RM

Cost of Goods Available For Sale 25,000

(-) Ending Finished Goods (2,500)

Inventory

Cost of Goods Sold (k) 22,500

 (l) Operating Expenses

RM RM

Gross Profit 6,000

(-) Net Income (2,800)

Operating Expenses (l) 3,200

(a) McPro Company, a manufacturer of tennis racket, started production in

January 2015. For the proceeding 5 years McPro had been a retailer of sports
equipment. After a thorough survey of tennis racket markets, McPro decided to
turns its retail store into a tennis racket factory.
Raw materials cost for a tennis racket will total RM40 per racket. Workers
on the production lines are paid on average RM15 per hour. A racket usually
takes 2 hours to complete. In addition, the rent on the factory equipment used
to produce rackets amounts to RM1,000 per month. Indirect materials cost
RM3 per racket. A supervisor was hired to oversee production; her monthly
salary is RM3,500.
Factory janitorial cost are RM1200 monthly. Advertising costs for the
rackets will be RM6000 per month. The factory building depreciation expense
is RM8,400 per year. Property taxes on the factory building will be RM 4,320
per year.
Required :
Categorize (CLO3,C4) the above cost item according to the following column
headings.
 Question 1 b)

Product Costs
Cost Item Direct Direct Manufacturin Period Prime Conversion
Material Labour g Overhead Costs Costs Costs
s (RM) (RM) (RM) (RM) (RM)
(RM)
Raw material 960000 960000
Assembly line 720000 720000
wages
Factory 12000 12000
equipment rent
Indirect materials 72000 72000
Factory supervisor 42000 42000
salaries
Factory Janitorial 14400 14400
Advertising 72000
Depreciation on 1680 1680
factory building
Factory property 846 846
taxes
TOTAL 960000 720000 142296 72000 168000 142926
0

Assuming that McPro manufactures, on average, 2,000 tennis rackets per

month, enter each cost item and amount per month (RM) under the
appropriate headings. Total the amounts in each of the columns. Support
your answer with calculation.

Raw material: RM40x(2000x12) =RM960000

Assembly line wages:RM15x (2000X12 )(2)=RM720000
Factory equipment rent:RM1000x12=RM12000

Indirect materials:RM3x (2000x12)=RM72000

Factory supervisor salaries:RM3500x12=RM42000

Factory Janitorial:RM1200x12=RM14400
Advertising:RM6000x12=RM72000
Depreciation on factory building:RM8400/5=RM1680
Factory property taxes:RM4320/5=RM846
 QUESTION 1 (5%- 22 MARKS)

A. Continental Tyre Corporation is capable of producing 30,000 units of tyres per

month. Below is information on production costs at the production levels of 10,000
units and 20,000 units.

Production level Cost per unit

Cost
behaviour
10,000 20,000
Cost Element 10,000 units 20,000 units
units units

Direct Materials 4 4 Variable

RM40,000 RM80,000 cost

Direct Labor 6 6 Variable

RM60,000 RM120,000 cost

Indirect Materials 2 2 Variable

RM20,000 RM40,000 cost

Factory Utilities 1.2 0.9 Mixed cost

RM12,000 RM18,000

Factory Rental 2 1 Fixed cost

RM20,000 RM20,000

Factory 2.4 1.2 Fixed cost

Equipment
Depreciation RM24,000 RM24,000
 Factory utilities
Variable cost per unit,b=RM18000-RM12000
20000-10000
=RM0.60
Total fixed cost,a =RM18000-RM0.60(20000)
=RM6000
Y=RM6000+RM0.60X
=RM6000+RM0.60(25000)
=RM21000

RM Total cost:Y=RM6000+RM0.60X

6000 Fixed Cost

Company Statement cost of goods sold manufactured for the year ended 31/12/2021

Product Cost RM RM
Direct Material (70x120000) 840000
Direct Labour (RM10X(120000X5) 6000000
MANUFACTURING OVERHEAD
Factory equipment rent (9000x12) 108000
Supervisor Salary ( 3700x12) 44,400
Factory Maintenance 15600
Supplies ( 70% x 15000) 10500
Utilities ( 70 % x 24000) 16800
Depreciation Expense-Factory Building 7200
Depreciation expense-Factory Machine 5000
Indirect Labour 60000
Indirect Material ( RM5X120000) 600000
Factory Property Taxes 6000
Total Manufacturing Overhead 873500
Total Product Cost 15273500
Production Process

I)Flow of production process

Injection molding the child

parts Buffing and sanding

Attaching the visors and Painting and decals

straps

Multiple quality checls Packaging and shipping

Ii) Explanation For each process

A) Injection Molding The Child Parts

The injection molding is a process to form the plastic resin into the desired shape. Injection
molding machine press the melted plastic into the mold, and cool down by cooling system
into solid designed shape. . The journey begins with tiny little beads of polystyrene which are
expanded under pressure and heat to create what is commonly known in the industry as
‘foam’. In technical terms the polystyrene now becomes expanded polystyrene (EPS). The
non-expanded beads are fed into an injection molding machine which puts out a shell of
expanded polystyrene which is the internal shell of a motorcycle helmet. but this shell alone
does not have the mechanical resistance to withstand high-impact forces which is why it is
covered with a shell made out of ABS. Both of the cells are attached together using industrial
adhesive into one combined external structure.

b)Buffing and sanding

Once the outer shell is ready it proceeds to buffing and sanding station where the entire
structure is polished and the joining marks left Behind by the injection molding machine is
ground to a smooth surface using a special polishing machine and emery paper. This not only
cleans the helmet surface of extra materials; it also prepares the shell for subsequent steps of
painting the helmet. it must be noted that not all helmets are painted, and if that is the case the
helmet proceeds today assembly line where the visors and straps are attached before packaging
and shipping it.
c) Painting and decals

After the buffing process, the helmet is completely cleaned of tiny materials and dust which
might affect the overall result of the painting process. to ensure that there is no dust left on the
surface of the helmet, multiple steps are done by the surface is rubbed with industrial alcohol
and subjected to vacuum machines where even the tiniest dust particle is completely absorbed
before the helmet proceeds to a hermetically sealed painting booth. Depending on the pre-
decided color and design options the colors and mix by an expert and using a painting gun the
surface is painted with a base coat and that is followed by another layer of the primary color. As
soon as this process is complete, the helmet proceeds to the decal section of the Assembly line
where expert workers paste decorative and colorful decals on the helmet and allow the helmet
to set settle for a period of 3 to 4 hours (maximum of 8 hours) after which it goes back into the
paint shop for a final layer of top coat.

D)Attaching the visors and straps

In a separate part of the manufacturing unit, workers design the

straps and strapping mechanism along with other rivets and bushes that go into the helmet for
securing the strap in place. Once the helmet comes out of the paint shop, workers in the
assembly line merge the painted shell with the visor mechanism along with the strapping
mechanism using multiple specialized tools for punching holes and attaching the straps security.
Die-cut and Laser machines are used to precisely cut the pads and inner lining of the helmet with
an accuracy of a few millimeters which ensure that the wearer gets the best comfort and safety
while using the product.
E)Multiple quality checks

Each of the steps mentioned above passes through a stringent quality check at the end of the
process to see whether the child parts meet regulatory requirements and internal quality
parameters before it is passed on to the next section of the Assembly Line on the manufacturing
process. Any part that does not meet the required quality parameters is discarded and recycled
to reduce waste. Once the quality expert is completely convinced of the helmet meeting all
necessary requirements and safety standards, the element becomes eligible to bear the ISI mark
along with the Insignia of the company before it is sent forward to be packaged and shipped.

D) Packaging and shipping

Finally, the finished product is packaged and shipped to multiple destinations across the world
along with documentations to help the customer make the best use of the product.
 CONTINUOUS ASSESSMENT
AA025 ACCOUNTING 2
INTAKE 2021
CHAPTER 3 COST BEHAVIOUR

QUESTION 1 (5%- 22 MARKS)

B. Continental Tyre Corporation is capable of producing 30,000 units of tyres per

month. Below is information on production costs at the production levels of 10,000
units and 20,000 units.

Production level Cost per unit

Cost
behaviour
10,000 20,000
Cost Element 10,000 units 20,000 units
units units

Direct Materials 4.00 4.00 Veriable

RM40,000 RM80,000 cost

Direct Labor 6.00 6.00 Veriable

RM60,000 RM120,000 cost

Indirect Materials 2.00 2.00 Veriable

RM20,000 RM40,000 cost

Factory Utilities 1.20 0.9 Mixed cost

RM12,000 RM18,000

Factory Rental 2.00 1.00 Fixed cost

RM20,000 RM20,000

Factory 2.4 1.2 Fixed cost

Equipment
Depreciation RM24,000 RM24,000
Based on the above information:

i. Calculate (CLO 3, C3) the cost per unit (RM) for each cost element, for
both production levels.
(6
marks)

ii. Determine (CLO 3, C4) the cost behaviour of each cost element whether
fixed cost,variable cost or mixed cost.
(3
marks)
iii. Separate (CLO 3, C4) fixed cost and variable cost for cost elements that
have mixed cost behaviour using the high-low method and state (CLO 3,
C2) the cost function. Estimate (CLO 3, C3) the total cost for this cost
element, if the production level is 25,000 units.

Element that has mixed cost behaviour is factory ultilities

Variable cost per unit = ( Cost at highest activity – cost at lowest)/( Highest activity –
Lowest activity )
= RM 18 000 – RM 12 000/ 20 000 units – 10 000 units
= RM 6000/10 000 units
= RM 0.60 per unit
Total fixed cost = Total Mxed Cost – Total Veriable Cost
= RM18 000 - ( 20 000 units X RM 0.60 per units)
= RM 18 000 – RM 15 000
= RM 6000
Total Mixed Cost = Total fixed cost + ( Veriable cost per unit X Number of units)
Y = a + bx
Cost Function
Y = RM 6000 + 0.60x
Therefore , estimated total cost for factory ultilities of the production level of 25 000
units
Y = RM 6000 + ( RM 0.60 X 25 000)
 = RM 6000 + RM 15 000
= RM 21 000
(7marks)

C. Sketch and label (CLO 3, C2) the graph for each of the following cost items.
i) Fixed cost per unit

ii) Total fixed cost

iii) Variable cost per unit

iv) Total variable cost

(6mar
ks)
 CONTINUOUS ASSESSMENT
AA025 ACCOUNTING 2
INTAKE 2021

CHAPTER 4 COST VOLUME PROFIT (CVP) ANALYSIS

QUESTION 1 (5%-20 MARKS)

Mrs. Camelia owns a cake business and employs five employees at a monthly salary
of RM2,000 per employee, with an additional commission of RM7.00 per cake sold.

Other costs RM
Rental RM1,600 per month
Supplies RM0.60 for a cake
Maintenance RM650 per month
Utilities RM254 per month and an additional RM0.40 for a cake.
Promotion and Advertisement RM600 per month

The selling price is RM60.00 per cake.

Required:

a) Determine (CLO3, C3) the total fixed cost per month and the variable cost for a
cake sold.
(5.5 marks)
Cost Items Total Fixed Cost Variable Cost Per
Unit
RM RM
Employee’s Salaries 10000
Sales Comission 7
Rental 1600
Supplies 0.60
Maintanance 650
Utilities 254 0.40
Promotion and Advertisement 600
Total 13104 8

b) Calculate (CLO3, C3) the break-even point in units and RM.

 Break-even point (Units) = Fixed Cost
Contribution Margin Per Unit

= Fixed Cost
(Selling Price Per Unit – Variable Cost Per Unit)

= RM13104
RM60-RM8

= RM13104
RM52

= 252 Units

Break-even point = Selling Price Per Unit x Break-even point

= RM60 per unit x 252 Units

= RM15120
(2.5 marks)

c) If the selling price is increased by 10%, how many (CLO3, C3) cakes should be
sold to achieve break-even point in units and RM?
(2.5 marks)
Selling price is increased by 10%

New selling price = RM60 x 1.1

= RM66

Break-even point (Units) = Fixed Cost

(Selling price per unit – Variable cost per unit)

= RM13104
RM66-RM8

= RM13104
RM58

= 225.93
= 226 Units

Break-even point (RM) = Selling price per unit x Break-even

point(Units)
= RM60 per unit x 226
= RM14916
d) If the variable costs increased by RM2.00, how many (CLO 3, C3) cakes
needed to be sold to earn a profit of RM18,000 a month?
(2.0 marks)
The Variable Cost Increased by RM2

New Variable cost per unit = RM8 + RM2

= RM10

Sold Units = Fixed Cost + Targeted Point

(Selling price per unit – Variable cost per unit)

= RM13104 + RM18000
RM60 – RM10

= RM31104
RM50

= 622.08
= 623 Units

e) If changes in (c) and (d) are taken into account, how many (CLO 3, C3) cakes
should be sold to achieve a profit of RM18,000?
(2.0 marks)

New Selling Price = RM66

New Variable Cost Per Unit = RM10

Sold Units = Fixed Cost + Targeted Profit

( Selling Price Per Unit – Variable Cost Per Unit)

= RM13104 + RM18000
RM66-RM10

= RM31104
RM56

= 555.43
= 556 Units

f) Sketch (CLO 3, C1) a break-even point graph. Show sales line, fixed cost line,
total cost line, profit areas and loss areas based on question (b)
(5.5 marks)
(RM)

Total Sales
Break-even point
 Profit
Total Costs
15120

13104 Fixed Cost

Loss

Units
252

QUESTION 2 (5%- 20 MARKS)

The following is information for Prisma products issued by Tekun Sdn. Bhd. (TSB)

RM
Sales (3,000 units) 720,000
Variable cost 252,000

Contribution margin 468,000

Fixed cost 249,600

Net income 218,400

REQUIRED:

(i) Calculate (CLO3, C3) the sales volume in units and Ringgit at break-even
point.
Fixed Cost = RM249600
Variable Cost Per Unit = Total Variable Cost
Total Units Manufactured

= RM252000
3000 Units

= RM84 Per Unit

Selling Price Per Unit = Sales

Total Units Sold
 = RM720000
3000 Units

= RM240 Per Unit

Break-Even Point(Units) = Fixed Cost

Contribution Margin Per Unit

= Fixed Cost
(Selling Price Per Unit – Variable Cost Per Unit)

= RM249600
RM240 – RM84

= RM249600
RM156

= 1600 Units

Break-Even Point(RM) = Selling Price Per Unit x Break-Even Point (Units)

= RM240 Per Unit x 1600 Units

= RM384000

(7 marks)

(ii) Calculate (CLO3, C3) the safety margin in Ringgit and give an explanation
(CLO,C4) to your answer.
(3 marks)

Safety Margin in RM = Actual Sales – Sales On Break-Even Point

= RM720000 – RM384000
= RM336000
It indicates the possible decrease in sales that may occur before loss. Sales of
tekun Sdn.Bhd could fall about RM336000 before the company begins operating
at a loss
(iii) Calculate (CLO3, C3) the number of units to be sold if TSB targets a profit of
RM500,000 for next month.
(4 marks)
Sold Units = Fixed Costs + Targeted Profit
(Selling Price Per Unit – Variable Cost Per Unit)
 = RM249600 + RM500000
RM240 – RM 84

= RM749600
RM156

= 4805.13

= 4806 Units

(iv) To increase the production capacity of TSB, production managers are planning
to buy a machine with a price of RM580,000. The estimated depreciation of the
machine is RM72,000. The direct labor costs of operating the machine will
increase by RM16 per unit. With this change, sales units are expected to
increase to 4,500 units. Calculate (CLO, C3) the selling price per unit of Prisma
product if TSB wants to maintain existing profit.
(6 marks)
Monthly Depreciation Expense Of The Machine = RM72000
12

= RM 6000
New Fixed Cost = RM249600 + RM6000
= RM255600
New Variable Cost Per Unit = RM84 + RM16
= RM100
New Sales Units = 4500 Units
Units Sold = Fixed Cost + Targeted Profit
(Selling Price Per Unit – Variable Cost Per Unit)

4500 = RM255600 + RM218400

Selling Price Per Unit – RM100

Selling Price Per Unit – RM100 = RM255600 + RM 218400

4500

Selling Price Per Unit = RM105.33 + RM100

 = RM205.33

The end