CONFIDENTIAL 1 AC/APR 2019/MAF151

UNIVERSITI TEKNOLOGI MARA

COMMON TEST 1

COURSE : FUNDAMENTAL COST ACCOUNTING

COURSE CODE : MAF 151
EXAMINATION : APRIL 2019
TIME : 1 HOUR 30 MINUTES

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of two (2) questions.

2. Answer ALL questions in the Answer Booklet. Start each answer on a new page.

3. Do not bring any material into the examination room unless permission is given by the
invigilator.

4. Please check to make sure that this test pack consists of :

i) the Question Paper

ii) Answer Sheets – provided by the Faculty

5. Answer ALL questions in English.

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

This examination paper consists of 3 printed pages
© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL
CONFIDENTIAL 2 AC/APR 2019/MAF151

QUESTION 1

A. State any TWO (2) differences between financial accounting and cost accounting.
(2 marks)

B. Briefly explain the following terms:

i. Direct material
ii. Direct labour
iii. Indirect labour
iv. Production overhead
v. Material Requisition Form
vi. Profit Centre
(6 marks)

C. Classify the following costs as either Production Cost or Non-Production Cost. For Non-
Production Cost you must state clearly either it is Selling & Distribution cost,
Administration cost, Finance cost or Research and Development cost.
i. Salary of production supervisor
ii. Interest on loan
iii. Freight-out (delivery expense)
iv. Chefs at restaurant
v. Hire of special machine
vi. Advertising
vii. Administrative office rent
viii. Salary of factory workers
ix. The costs of materials used in prototypes
x. Wood in producing furniture
(5 marks)

D. Swit Licious Bakery makes and sells bread for the people in the urban area of Kota Bharu
for many years. Below is the list of cost incurred in the month of March 2019.

List of cost RM
Bakers’ salaries 3,800
Rental paid (80% for production) 2,000
Advertising cost 250
Water & electricity (10% for office used) 1,500
Hire of special machine 780
Sales commission 350
Cashier’s salary 1,000
Whole meal plain flour 6,310
Baking powder 20
Insurance paid for baking equipment 150

Required:
Prepare cost statement for the month of March 2019 by stating clearly the prime cost,
production overhead and non-production cost.
(12 marks)
(Total: 25 marks)

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

CONFIDENTIAL 3 AC/APR 2019/MAF151

QUESTION 2

A. Having too little inventory is obviously a potential disaster for any business.

a. Briefly explain any THREE (3) reasons why a company should avoid under-
stocking its material.
(3 marks)
b. Define Maximum Stock Level and Lead Time.
(2 marks)

B. DS Company is producing one type of product called “Reddy”. Monthly demand for this
product is 5,000 bottles. Each bottle of “Reddy” requires a half kilogram of main
ingredient. This company orders its main ingredient from supplier at RM 8 per kg. The
material handling cost is 10% of the purchase price. The insurance cost is RM 0.20 per
kg. The transportation cost and the cost of placing order is RM 50 per order.

Required:

a. Calculate the annual demand for the main ingredient, holding cost and ordering
cost. (2 marks)

b. Determine the Economic Order Quantity (EOQ) using tabulation method for order
sizes of 500 kg, 1,000 kg, 1,200 kg and 1,500 kg. (6 marks)

C. LoveCat Gebus Manufacturer is an established manufacturing company that produces

cat food in Kelantan. This company bought main ingredient from Thailand. The
information given is for receipts and issues of the material.

Date Receipts Issues

3.3.2019 3,000 kg @ RM12
7.3.2019 2,500 kg
10.3.2019 1,000 kg
14.3.2019 1,500 kg @ RM 12.50
23.3.2019 1,000 kg @ RM 13
24.3.2019 Returned to supplier 100 kg
25.3.2019 1,800 kg

Additional information:

1. There were 1,000 kg of material in the beginning of the month at RM 11.50 per kg.
2. On the 24 March, the materials that returned to supplier were originally bought on
23 March 2019.
3. Physical stock count at the end of month found that only 1,000 kg were in store.

Required:

Prepare a Store Ledger Card for the month using First-In First-Out Method (FIFO).
(12 marks)
(Total: 25 marks)

END OF QUESTION PAPER

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL