CONFIDENTIAL AC/NOV2023/ACC116

UNIVERSITI TEKNOLOGI MARA

COMMON TEST 1

COURSE : INTRODUCTION TO COST ACCOUNTING

COURSE CODE : ACC116
EXAMINATION :
TIME : 2 HOURS (3.00 P.M – 5.00 P.M.)

INSTRUCTIONS TO CANDIDATES

1. This set of question consists of (4) multiple-choice questions, (2) fill in the blank
questions, (2) true or false questions and (2) short-structured questions.

2. Answer ALL questions in your answer sheet.

3. Students must make sure that all questions are answered before submission.

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

This examination paper consists of 6 printed pages

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MULTIPLE-CHOICE QUESTIONS

Choose the BEST answer for the following questions.

1. Material control cycle involves the following EXCEPT

A. purchasing of materials
B. receipt and store keeping of materials
C. advertising and marketing of materials
D. issuing and pricing of materials
(1 mark)

2. ____________ is a source document used to request for purchase to be made for

stock of raw material replenishment.
A. Material requisition note (MRN)
B. Purchase requisition note (PRN)
C. Purchase order (PO)
D. Good Receipt Note (GRN)
(1 mark)

3. Lala Manufacturing Malaysia Sdn. Bhd. purchases raw materials at a cost of RM36 per
unit. The demand for raw materials is 400 units per month. The carrying cost per unit
is RM16 and the cost of placing an order is RM24. Calculate the economic order
quantity.
A. 100 units
B. 120 units
C. 400 units
D. 575 units
(1 mark)

4. The following features are related to perpetual inventory system EXCEPT

A. Perpetual inventory system provides routine internal control over materials.
B. Perpetual inventory system does not requires closing of operation.
C. Perpetual inventory system ensures a stock balance is continuously updated
after each receipt or issues of materials
D. Perpetual inventory system ensures stock balance is updated on periodic basis,
usually annually.
(1 mark)

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FILL IN THE BLANK QUESTIONS

Apple Drinks Bhd. uses material X in its manufacturing. The details of the material x are as
follows:

Average usage 300,000 units every month

Minimum usage 50,000 units per week
Maximum usage 100,000 units per week
Lead time for:
Material X 1 to 3 weeks
Re-order quantity for:
Material X 150,000 units

1. Compute the minimum stock level for material X.

(2 marks)

2. Compute the maximum stock level for material X.

(2 marks)

TRUE OR FALSE

Choose True or False for each of the following questions.

1. Material requisition note will be prepared by Purchasing Department to request on the

material needed by production department. (True / False)
(1 mark)

2. Material control system is a system to ensure materials always ready for production and
purchase the material in a right quantity at the right time and price.
(True / False)
(1 mark)
Total: 10 marks)

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SHORT STRUCTURED QUESTIONS

Answer ALL the questions and show related workings for each question.

QUESTION 1

Zeyton Sdn. Bhd. purchases raw materials at a cost of RM32 per unit. The forecasted demand
for raw material is 42,000 units per year. The rental of storage and insurance for material
breakage costs are RM7.90 and RM4.90 per unit, respectively. Whereas the costs of placing
an order are handling and transportation costs at RM48.00 and RM16.00 per order,
respectively.

Required:

a. Find the carrying cost per unit and ordering cost per order.

b. Determine the total costs using tabulation method based on three (3) order sizes options
of 400; 500; and 600 units.

c. Determine the economic order quantity (EOQ) based on your answer in (b) above.

(Total: 15 marks)

QUESTION 2

Juicelive Enterprise makes homemade juices that are from fresh fruits and vegetables. One
of the best rated juices by customers is “Apple Juice” which made by 100% pure apples. The
company uses apple as the main ingredient to produce the Apple Juice. In order to produce
one bottle of Apple Juice, the company need 500 grams of apples. Balance at the beginning
of the March was 100 kg of apples valued at RM480. Below are the details of apples purchased
in March 2023.

Date Total Kilogram

March (RM) (Kg)
2 2,500 500
7 4,350 750
13 5,280 880
20 6,144 960
27 3,900 600

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On the 15 March 2023, 100 kilograms of apples were returned to supplier because the apples
were rotten. This transaction is to be recorded at the latest purchase price. The transactions
relating to the production of Apple Juice are shown below:

Date Quantity produced

March Bottles
6 1,000
10 1,250
19 1,500
28 2,000

Physical stocktaking done as at 31 March 2023 revealed there was only 665 kilograms of
apples available in store. The discrepancies were due to inventory obsolescence.

Required:

Prepare a store ledger card for the purchase and issuance of apples (in kilogram) using First
In First Out (FIFO) method. State the closing inventory balance as at 31 March 2023.

(Total: 15 marks)

(Total: 40 marks)