SECTION A: Structured Questions (40 marks) This section consists of TWO (2) questions. Answer ALL questions. Question 1 Three joint products are produced by a chemical process. There are two c

SECTION A: Structured Questions (40 marks) This section consists of TWO (2) questions. Answer ALL questions. Question 1 Three joint products are produced by a chemical process. There are two c
SECTION A: Structured Questions (40 marks) This section consists of TWO (2) questions. Answer ALL questions. Question 1 Three joint products are produced by a chemical process. There are two consecutive processes. Output from the first process is transferred to next process, from which three joint products, N35, B24 and L27 are produced and sold. Process 1 Material 50,000 kg at RM8 per kg Direct labour Overheads Normal loss 10% of input Scrap value of loss Output RM400,000 RM250,000 RM180,000 RM4 per kg 46,000kg Process 2 Direct labour Overheads Output RM276,000 RM276,000 N35 18,000 kg B24 16,000 kg L27 12,000 kg There were no opening and closing stocks in either process. The selling prices of the output from Process 1 were as follows: N35 RM48 per kg B24 RM36 per kg L27 RM24 per kg Required: Prepare an account for Process 1 . [10 marks] Calculate the total of joint cost. [2.5 marks] Calculate the profit attributable to each of the joint products by apportioning the total costs from Process 2: On the basis of weight of output. [7.5 marks] [Total: 20 marks] Question 2 Amni run a soft toys shop in Kampar, Perak. Below are the transactions for the month of May 2020. May 1 Beginning Inventory 50 units @ RM15.00 each 4 Purchases 140 units @ RM15.50 each 11 Purchases 70 units @ RM16 each 26 Sales 190 units @ RM19.00 31 Required: Sales 30 units @ RM19.50 Calculate the value of ending inventory and the cost of goods sold using perpetual: First In First Out (FIFO) [5 marks] Last In First Out (LIFO) [4.5 marks] Average Method (AVCO) [4.5 marks] Draw up the statement of profit and loss and other comprehensive income for the year showing the gross profits that have been reported using FIFO, LIFO and AVCO. [6 marks] [Total: 20 marks] SECTION B: Structured Questions (60 marks) This section consists of THREE (3) questions. Answer A LL questions. Question 1 Product Beta is produced by passing through two processes: 1 and 2. The following information relates to Process 1 for the month of April 2020. At the start of the period, there were 600 units of opening work in process with a cost to date of RM4,500. The degree of completion and the costs to date are as follows: Degree of completion Costs Materials 100% RM2,350 Labour 40% 800 Overheads 70% 1,350 During the month of April, the following costs were incurred: 2,000 units of direct materials RM14,800 Direct labour RM7,385 Production overhead RM7,896 At the end of April, it was found that there were 500 units of closing work in process with the following degree of completion: Degree of completion Materials 70% Labour 50% Overheads 40% There was no loss in the process. The company operates using the first in first out method of charging opening stock to production. Required: Prepare the Process 1 Account. [4 marks] Prepare the statement of equivalent production units and calculate the total equivalent production units in total and by elements of cost. [7 marks] Prepare the statement of cost and calculate the cost per equivalent units in total and by elements of cost. [3.5 marks] Prepare the statement of valuation and calculate the cost to be transferred to process in total and by elements of cost. [5.5 marks] [Total: 20 marks] Question 2 Indah Anggun Company has provided the following information regarding its product Alpha for Period 1. Units produced 250,000 Units sold (RM40 per unit) 200,000 Budgeted units 250,000 V ariable cost per unit: RM Direct materials 10 Direct labour 7 Variable production overheads 5 Variable selling and administrative overheads 3 There were no opening stocks at the start of the period 1. It is also noted that the actual and budgeted production overheads are the same. RM375,000 RM150,000 Required: Prepare the operating statements based on marginal costing principles. [4.5 marks] Manufacturing support cost for Bijak Sdn. Bhd. in September 2020 is as follows: Cost pool Normal cost (RM) Electricity consumed 20,000 Material handling 45,000 Machine assembly 40,000 Quality inspection 20,000 Total 125,000 Company’s cost accounting system assigns support cost to product based on machine hours. Estimated total machine hour for September 2020 is 25,000. The Managing Director has requested the accountant to implement an Activity Based Costing (ABC) system because this system is believed to estimate product cost more accurately. The accountant has collected the following data: Cost pool Cost driver Existing capacity Cost (RM) Electricity consumed Kilowatt hours 10,000 kilowatt 20,000 Material handling Material movement 2,500 movement 45,000 Machine setup Number of setups 500 sets finished 40,000 Quality inspection Number of inspections 1,000 inspections 20,000 The company received an order to supply 500 units of a product called M10. The estimated cost and other information that relate with the production of 500 units of M10 are as follows. Raw material cost RM10,000 Direct labour cost RM9,000 Machine hour 900 machine hours Direct labour hour 1,000 direct labour hours Electricity consumption 1,000 kilowatt hours Material handling 20 movement Machine set up 3 set ups Quality inspection 10 inspections Required: Define Activity Based Costing (ABC). [3.5 marks] Calculate the cost per unit for product M10 by using the following methods: Traditional Costing [2 marks] Activity Based Costing [2 marks] [Total: 12 marks] Question 3 Bright Lighting Sdn Bhd, an engineering company, has five cost centres: Three production departments, machine shop, welding shop and assembly shop and two service departments, maintenance and power house. The following are the allocated costs: Machine Shop (RM) Welding Shop (RM) Assembly Shop (RM) Maintenance (RM) Power house (RM) Indirect wages 400 800 300 250 250 Indirect material 800 1,200 500 300 200 Repairs and maintenance 3,000 2,500 1,500 2,000 1,000 A pportionment costs RM Rent 10,000 Power 2,000 Lighting 5,000 Depreciation on equipment 10,000 Insurance on equipment 1,000 The following basis of apportionment is available. Direct labour cost (RM) Machine hours Floor area sq.ft Direct labour hours Effective horse power Number of employees Equipment value (RM) Machine shop 21,000 7,000 200 8,000 40 20 30,000 Welding shop 19,000 6,000 400 11,500 30 10 20,000 Assembly shop 10,000 5,000 300 10,500 20 30 20,000 Maintenance – – 50 – 5 20 15,000 Powerhouse – – 50 – 5 20 15,000 50,000 18,000 1,000 30,000 100 100 100,000 It is decided that the cost of the service cost centre should be apportioned as follows: Machine Shop Welding Shop Assembly Shop Maintenance Powerhouse Maintenance (%) 20 50 30 – – Powerhouse (%) 20 60 20 – – Required: Prepare an analysis of the overheads using the basis provided above. [25 marks] Using the direct method, apportion the service cost centre among the production cost centres [3 marks] [Total: 28 marks]