Get premium membership and access revision papers, questions with answers as well as video lessons.
Bcom 210: Management Accounting 1 Question Paper
Bcom 210: Management Accounting 1
Course:Bachelor Of Commerce
Institution: Chuka University question papers
Exam Year:2013
UNIVERSITY EXAMINATIONS
SECOND YEAR EXAMINATION FOR THE AWARD OF
DEGREE OF BACHELOR OF COMMERCE
BCOM 210: MANAGEMENT ACCOUNTING 1
STREAMS: BCOM Y2S1 TIME: 2 HOURS
DAY/DATE: WEDNESDAY 7/8/2013 2.30PM – 4.30 PM
INSTRUCTIONS:
1. Answer all Questions
2. Show all your workings
3. Do not write on the Question Paper
1. (a) Explain five distinctions between management accounting and financial
accounting. [10 Marks]
(b) Giving examples in each case, explain the following terminologies. [4 Marks]
(i) Sunk costs
(ii) Relevant costs
(c) “All avoidable costs are relevant costs”. Discuss [4 Marks]
(d) The following information on the number of fridges shipped and the shipping expenses has been complied by Air Vents Ltd which customizes fridges for customers and ships them via courier:
Month Fridges Shipped Shipping costs in Ksh
January 3 180
February 6 230
March 4 170
April 5 200
May 7 230
June 8 270
July 2 120
Using the high low method, derive the cost function and use this function to show how much the company would incur if it customized and shipped 10 fridges in August. [4 Marks]
(e) Marvels Company sells branded pens at Ksh 30 per unit. The variable cost per pen is Ksh 20 and fixed costs amount to Ksh 7,500 per month.
(i) State any 2 assumptions of CVP analysis. [2 Marks]
(ii) How many pens should the company sell to breakeven. [2 Marks]
(iii) If the company sells 1,000 pens per month, what is the margin of safety? [2 Marks]
(iv) What would be the breakeven point if the company runs advertisements amounting to Ksh 5, 000 per month? [2 Marks]
2. (a) What is a job cost sheet? [2 Marks]
(b) The following information relates to the refining process of bulk refineries of the month of July 2013.
Production data:
1st May: Work in progress of 10,000 kgs 100% complete for materials and 80% complete for conversion costs.
Units started in the month: 100,000 kgs.
31st May: Work in progress of 15,000 units which are 60% complete for materials and 20% complete for conversion costs.
Cost data:
1st May: Work in progress inventory: Materials cost Ksh 150,000 and conversion cost Ksh 720,000.
Material costs added in May: Ksh 15,450,000.
Conversion costs added during the period: Ksh 9,080,000.
The company uses the weighted average method.
Required:
(i) Compute the equivalent units of production for May [6 Marks]
(ii) Calculate the cost per kgs for the month [6 Marks]
(iii) Show the process account for the month [6 Marks]
3. (a) Define a budget and highlight any five reasons why budgeting is important in an
organization. [6 Marks]
(b) Zamba Ltd makes and sells a single product. It is considering its plans for next financial year. The budgeted costs and selling prices for the product are as follows:
Ksh per unit
Selling price 45
Direct materials 11
Direct labour 8
Production overhead:
Variable 4
Fixed 3
Selling overhead:
Variable 5
Fixed 2
Administration overhead:
Fixed 3
Fixed costs per unit are based on a normal annual activity level of 96,000 units. These costs are expected to be incurred at a constant rate throughout the year.
Activity levels in January are expected to be as follows:
January
Sales in units 7,000
Production in units 8,500
There will be no stock held at the beginning of January
Required:
(a) Prepare the profit statement for January using:
(i) Absorption costing [5 Marks]
(ii) Marginal costing [5 Marks]
(c) Weywey Company produces several products form Calcitate. The costs per ton of producing Calcitate are Ksh 60,000, one third of which is allocated to product Saltin. 7,000 units of Saltin are produced from each ton of Calcitate. The units can be sold at the split off point at Ksh 9 per unit or they can be processed further at a total cost of Ksh 9,500 and then sold for Ksh 12. Should product Saltin be sold at the split off point or it should be processed further? [4 Marks]
______________________________________________________________________________
More Question Papers
Popular Exams
Return to Question Papers