Get premium membership and access revision papers, questions with answers as well as video lessons.
Caa 201: Introduction To Management Accounting Question Paper
Caa 201: Introduction To Management Accounting
Course:Bachelor Of Commerce
Institution: Kca University question papers
Exam Year:2009
1
UNIVERSITY EXAMINATIONS: 2009/2010
SECOND YEAR STAGE III EXAMINATION FOR THE DEGREE OF
BACHELOR OF COMMERCE
CAA 201: INTRODUCTION TO MANAGEMENT ACCOUNTING
(DAY CLASS)
DATE: DECEMBER 2009 TIME: 2 HOURS
INSTRUCTIONS: Answer ALL Questions
QUESTION ONE :( 20 MARKS)
a) ABC LTD used the marginal cost method in determining its profit or losses. The following data
relate to the two years ended 31st December,2007 and 2008
2007 (shs) 2008(shs
1,560,000 1,820,000
Sales
Net profit 104,000 169,000
Determine:
(i) Contribution to sales ratio (2 Marks)
(ii) Break even sales (2 Marks)
(iii) The profit when sales are shs 234,0000 (2 Marks)
(iv) The margin of safety in 2008 (2 Marks)
b) The following schedule of activities and related information for the construction of a new plant
2
Activity
Expected time Expected cost ( shs
Months Variance ‘000’)
1-2
2-3
3-6
2-4
1-5
5-6
4-6
5-7
7-8
6-8
4
2
3
6
2
5
9
7
10
1
1
1
1
2
1
1
1
5
8
16
5
3
4
9
2
12
20
7
14
4
Assume that the cost and time required for one activity are not dependent upon the cost and time of
any other activity and variations are expected to follow a normal distribution. Calculate:
(i) The critical Path. (6 Marks)
(ii) The expected cost of construction of the plant (2 Marks)
(iii) Expected time required to build the plant. (2 Marks)
(iv) The standard deviation of the expected time. (2 Marks)
QUESTION TWO (20 MARKS)
a) Distinguish between planning variance and operational variance and briefly explain why they
are calculated. (6 Marks)
b) The following data relates to actual cost incurred and variances of a product for the year ended
31st December 2008:
i) Actual production 1,800 units
ii) Actual cost incurred: Kshs.
Direct material purchased
and used (150,000 kg) 2,100,000
Direct wages for 32,000 hrs 1,360,000
Variable production overhead 380,000
3
iii) Variances:
Direct material price 150,000(F)
Direct material usage 90,000(A)
Direct labour rate 80,000(A)
Direct labour efficiency 160,000(F)
Variable production overhead expenditure 60,000(A)
Variable production overhead efficiency 40,000(F)
Variable production overhead varies with labour hours worked. A standard marginal costing system is
operated.
Prepare a standard cost sheet for the product
(show ALL your workings) (14 Marks)
QUESTION THREE (17 MARKS)
a) Distinguish between a by product and a joint product (2 Marks)
b) The following data relates to process 2 for one accounting period. Process 2 receives units
from process 1 and after processing transfers them to process 3.
Opening WIP 600 units.
Value ‘shs’ % complete
Input materials 720 100
Material introduced 500 60
Labour 340 50
Overheads 270 40
Transfers from process 1: 4,100 units valued @ shs. 5,200
Transfers to process 3 : 3,500 units.
Shs.
Materials introduced 2,956
Labour 2,200
Overheads 1,900
Closing stock was 800 units at the following stage of completion.
Input material 100% complete
4
Material introduced 60% complete
Labour 50% complete
Overheads 30% complete
400 units were scrapped at the following stage of completion.
Input materials 100% complete
Material introduced 100% complete
Labour 40% complete
Overheads 30% complete
The normal loss was 10% of production and the scrapped units realized 40% each.
REQUIRED:
Prepare the process accounts for process 2 using FIFO method (15 Marks)
QUESTION FOUR :( 15 Marks)
a) Explain the objectives of transfer price. (5 Marks)
b) Explain the role played by the management accountant in the decision making process.
(10 Marks)
More Question Papers
Popular Exams
Return to Question Papers