Cost & Management accounting Time: 13h00 - 16h00 Mark allocation: 100 marks
Date: 31 October 2008 Number of pages: 4
Examiner’s instructions: 1. 2. 3. 4. 5.
Answer all questions. Show all your working. Lay your work out clearly, using headings, sub-headings and paragraph numbers. The examination should be conducted in strict silence. This is a closed book exam. No books or notes may be consulted during the exam by a student. 6. Ensure that your SAIM number and your ID number are both indicated on your examination book. No names should be recorded anywhere on the examination book. 7. Failure to observe the rules and regulations set down by the SAIM will be considered cheating and you will be disqualified from this examination and any future SAIM examinations.
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COST & MANAGEMENT ACCOUNTING May 2015 Answer all questions. (100 marks) Question 1 The following estimated figures were presented to you by the cost accountant of Eezi Manufacturers for financial year 01/01/2014 to 31/12/2014.
Manufacturing overheads: Fixed R12 000; variable, R13 000 Direct material cost – R20 000 Direct labour cost – R40 000 Production – 2 000 units Labour hours – 1 000 Machine hours 500 You are required to calculate the predetermined manufacturing overhead rate using the following as base: 1. Material cost 2. Labour cost 3. Prime cost 4. Labour hours 5. Machine hours 6. Product units. 7. A combination where 25% is considered to be related to material cost and 75% related to labour hours. 8. Also calculate the production cost per unit when (a) Labour cost and (b) the combination is used as basis. {25} Question 2 The following costs relate to job A 1234 direct materials R24-50. Direct wages: Dept 1: 18 hours R1-35 Dept 2: 32 hours R1-30 Budgeted overhead for the year based on normal capacity. Variable overhead: Dept 1: R6 000 for 9 000 direct labour hours. Dept 2: R8 000 for 10 000 direct labour hours. Fixed overhead: Total budgeted direct labour hours for the whole factory R22 000 Total budgeted expenditure R16 500 required.
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Required: a) Draft a job cost schedule for job No A 1234. b) Calculate the selling price if the profit on cost is expected to be 25%
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Question 3A Multiple Choice: Choose correct answer. 1. The main reason for the development of Cost Accounting was: a) the development of limited company b) the improvement in transport facilities c) the industrial revolution. 2. Information provided by conventional accounts: a) gives more detail than cost accounts b) gives less detail than cost accounts c) gives the same detail as cost accounts. 3. Management’s need for increased information has resulted because: a) managers are less skilled b) processes have increased in complexity c) managers have more assistants. 4. It is necessary to express plans in monetary terms and this has resulted in development of: a) mathematical techniques b) control accounts c) budgetary control and Standard costing. 5. A coding system is satisfactory if it: a) is hard to remember b) cannot be expanded c) is easy to remember. 6. One of the main types of codes used in business is: a) decimal code b) morse code c) highway code. 7. Inter-firm decisions are made by: a) internal managers b) external persons c) managing directors. 8 Accounting information must be; (a) objective (b) biased (c) subjective.
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Effective control: (a) does not require objective (b) does require objective (c) does not need a plan.
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When control is operating, actual results: (a) will be compared with planned results (b) will not be compared with planned results (c) will not be recorded.
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Question 3 B The following data was prepared by the cost accountant of Evander Wholesalers for the year ended 30 June 2008 Sales Credit notes received Purchases Credit notes issued Freight on sales
R762 256 5 456 654 269 2 256 3 955
Freight on purchases Salesperson’s commission Stock ( 1 July2007) Selling and promotional expenses Railage on sales
7 283 1 155 89 900 15 562 26 600
Additional information a) The gross profit percentage mark-up has average 25% on cost price for a number of years. b) Harbour duties on purchases still to be paid by year-end amount to R8 800. Required Compilation of an income statement for the year ended 30 June 2008
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Question 4 Tiger Manufactures produces a single product called Xerexon. Details pertaining to the manufacture of this product for the year ended 30 September 2009 are as follows:
Direct raw material purchases Direct wages paid Indirect wages paid Indirect material stock (01/10/2008 Indirect material purchases Carriage on direct material purchase Indirect material stock (30/09/2009) Work- in progress ( 30/09/2008) Work-in progress ( 30/ 09/2009) Direct raw material returns to suppliers Factory insurance Municipal charges for factory Salaries of sales office Depreciation of factory equipment Depreciation of office equipment (sales office) Other miscellaneous factory overheads Sales of finished goods Stock of finished goods (01/10/2009) Stock of finished goods (30/9/2009)
Additional information a) Direct wages for the factory of R1 750 are still owing at 30 September 2009 b) Of the factory insurance, 40% relates to the next financial year. c) Direct raw stock at 1/10/2008 amounted to R62 872,whereas the corresponding closing stock figures at 30/9/2009 amounted to R59 743. d) Administration expenses (other) amounted to R82 282 for the year. e) The enterprise manufactured 50 000 units of Xerexon for the year. REQUIRED a) A manufacturing cost statement for the year ended 30 September 2009. b) An income statement for the enterprise for the financial period.
