The document is a front sheet for a final exam on management accounting. It includes information such as the student's name and ID, the date and time of the exam, a student declaration, grading criteria, space for assessor feedback and signatures. The exam will have two parts - a theoretical multiple choice and short answer section, and an applications section where students can choose two of four cost allocation and budgeting questions to answer.
The document is a front sheet for a final exam on management accounting. It includes information such as the student's name and ID, the date and time of the exam, a student declaration, grading criteria, space for assessor feedback and signatures. The exam will have two parts - a theoretical multiple choice and short answer section, and an applications section where students can choose two of four cost allocation and budgeting questions to answer.
The document is a front sheet for a final exam on management accounting. It includes information such as the student's name and ID, the date and time of the exam, a student declaration, grading criteria, space for assessor feedback and signatures. The exam will have two parts - a theoretical multiple choice and short answer section, and an applications section where students can choose two of four cost allocation and budgeting questions to answer.
The document is a front sheet for a final exam on management accounting. It includes information such as the student's name and ID, the date and time of the exam, a student declaration, grading criteria, space for assessor feedback and signatures. The exam will have two parts - a theoretical multiple choice and short answer section, and an applications section where students can choose two of four cost allocation and budgeting questions to answer.
EXAMINATION FRONTSHEET Qualification BTEC Level 4 HND Diploma in Business
Unit number and title Unit 5: Management Accounting (489)
Exam Date
Student Name Student ID
Class No. Assessor Name THAOPUP
Student declaration I certify that the assignment submission is entirely my own work and I fully understand the consequences of plagiarism. I understand that making a false declaration is a form of malpractice. Student’s signature:
There are 2 parts in this examination. Part I is theoretical section and Part II is application section. You have to do both parts to finish the exam!
Part I – Theories
A. Choose the best answer (only one) for the following questions B. Answering the following questions C. True or False?
Part II – Application
You can choose ONLY TWO questions among the four following questions. If anyone breaks the rule (does more than 2 questions), it means that you will receive the grade for only one question.
A. Cost Allocation Golden Company manufactures pottery in two producing departments: Shaping and Firing. Three support departments support the production departments: Power, General Factory and Human Resources. Budgeted data on the five departments follow: Units: $ Supporting Departments Producing Departments General Power HR Shaping Firing Factory Direct overhead costs 90.000 167.000 84.000 72.000 230.000 Kilowatt hours - 13.000 25.000 20.000 80.000 Square feet 2.000 - 6.000 24.000 8.000 Direct labour hours - - - 10.000 4.000
3 Power is allocated on the basis of kilowatt-hours, General Factory is allocated on the basis of square footage, and Human Resources is allocated on the basis of direct labour hours. The company does not break overhead into fixed and variable components. Required 1. Allocate the overhead costs to the producing departments using the direct method (Round allocation ratios to two decimal places). 2. Using direct labour hours, compute departmental overhead rates. 3. Allocate the overhead costs to the producing departments using the sequential method (Round allocation ratios to two decimal places). 4. Using direct labour hours, compute departmental overhead rates. 5. Allocate the overhead costs to the producing departments using the reciprocal method (Round allocation ratios to two decimal places). 6. Using direct labour hours, compute departmental overhead rates. B. Budgeting Optima Company is a high-technology organization that produces a mass-storage system. The design of Optima’s system is unique and represents a breakthrough in the industry. The units Optima produces combine positive features of both floppy and hard disks. The company is completing its fifth year of operations and is preparing to build its master budget for the coming year (2019). The budget will detail each quarter’s activity and the activity for the year in total. The master budget will be based on the following information: i. Fourth-quarter sales for 2018 are 55.000 units. ii. Unit sales by quarter (for 2019) are projected as follows: 1st quarter 2nd quarter 3rd quarter 4th quarter 65.000 70.000 75.000 90.000
iii. The selling price is $400 per unit.
iv. Ending inventory of finished good for each quarter is following the rule that it equals to 25% of the sales level of that quarter. v. Each mass-storage unit uses five hours of direct labour and three units of direct materials. Laborers are paid $10/hour, and one unit of direct materials costs $80. vi. There are 65,700 units of direct materials in beginning inventory as of January 1, 2019, costed $285/unit. At the end of each quarter, Optima plans to have 30% of the direct materials needed for next quarter’s unit sales. Optima will end the year with the same level of direct materials found in this year’s beginning inventory. 4 vii. Fixed overhead totals $1 million each quarter. Of this total, $350,000 represents depreciation. The fixed overhead rate is computed by dividing the year’s total fixed overhead by the year’s expected units produced. viii. Variable overhead is budgeted at $6 per direct labour hour. All variable overhead expenses are paid for in the quarter incurred. ix. Fixed selling and administrative expenses total $250,000 per quarter, including $50,000 depreciation. x. Variable selling and administrative expenses are budgeted at $10 per unit sold.
Required
Prepare a master budget for Optima Company for each quarter of 2019. The following component budgets must be included:
1. Sales budget 2. Production budget 3. Direct materials purchases budget 4. Direct labour budget 5. Overhead budget 6. Selling and administrative expenses budget 7. Ending finished goods inventory budget 8. Cost of goods sold budget
