Get premium membership and access revision papers, questions with answers as well as video lessons.
Agbm 312: Managerial Accounting Question Paper
Agbm 312: Managerial Accounting
Course:Bachelor Of Science In Economics And Statistics
Institution: Chuka University question papers
Exam Year:2013
CHUKA
UNIVERSITY
UNIVERSITY EXAMINATIONS
SECOND YEAR EXAMINATION FOR THE AWARD OF DEGREE OF
BACHELOR OF SCIENCE IN ECONOMICS AND STATISTICS
AGBM 312: MANAGERIAL ACCOUNTING
STREAMS: BSC (ECON & STAT) TIME: 2 HOURS
DAY/DATE: WEDNESDAY 14/8/2013 8.30 AM – 11.30 AM
INSTRUCTIONS:
• Answer Question One and any other Two Questions
• Do not write on the Question paper.
Question One
(a) Explain the significance of a management accounting system in an organization.
[5 marks]
(b) Outline three differences between Bridgets and Standards. [3 marks]
(c) Lexus ltd manufactures telephones. The current operating level is 400,000 phones but full capacity is 550,000. The phones normally sell for sh. 1,500 per phone. Manufacturing cost data of 400,000 phones is shown below.
Sh ‘000’ Sh ‘000’
Manufacturing cost
Variable costs 300,000
Fixed costs 187,500 487,500
Selling and administrative costs
Variable (freighted commissions) cost 30,000
Fixed costs 60,000 90,000_
577,500
======
A vendor offers to buy 100,000 phones for export at sh. 1,125 per phone. The buyer will pay for freight and no commissions will be paid. The acceptance of this offer will not affect the present sales. The managing director is reluctant to accept this offer because he believes that the offer price of sh. 1,125 is well below the manufacturing cost per unit.
Required:
(i) Should the offer be accepted [7 marks]
(ii) What factors should be considered before accepting the order. [3 marks]
(d) In job order costing system, production overhead absorption could be based on:
(i) Direct labour rate
(ii) Percentage of direct materials
Explain the circumstances under which each of these bases are appropriate. [4 marks]
(e) Summarize the sequence used in compilation of annual budget in a manufacturing company. [6 marks]
(f) Explain the term limiting factor as used in budgeting. [2 marks]
Question Two
(a) Outline any four characteristics of process costing. [4 marks]
(b) Unique Ltd manufactures a single product. The product passes through three processes before completion. In the month of January 2013, the following data was recorded in the respect of process 2:
Opening stock: 1,900 units valued at sh. 4,500 made up of:
Sh Degree of completion (%)
Direct materials 2,300 80
Direct labour 1,100 60
Production overheads 1,100 40
Additional Information:
1. Transfer from process 1 were 15000 units valued at sh 52,500
2. Transfer to process 3 were 12,400 units
3. The costs incurred in process 2 were as follows:
Sh
Direct materials 18,300
Direct labour 23,000
Production overheads 17,200
4. On completion of process 2, 800 units were scrapped at sh. 5 per unit.
5. 3700 units of closing stock were completed as follows:
%
Direct materials 90
Direct labour 70
Production overheads 50
6. During production, a normal loss of 8% of total input is expected.
7. Unique ltd uses the first in first out (FIFO) method of stock valuation.
Required:
(i) Statement of equivalent production. [6 marks]
(ii) Statement of cost [5 marks]
(iii) Process 2 account [5 marks]
Question three
Jewana Ltd produces four products namely A, B, C and D. The following are the firms budgeted figures for the month of July 2013.
A B C D
Demand (units) 1500 1800 1000 4000
Selling price per unit (sh)
3840
2700
2000
4000
Cost per unit (sh):
Material 1200 1200 800 1200
Labour 1500 800 600 1200
Variable overhead
240
170
100
200
Fixed overhead 600 500 400 600
Additional information:
1. Material cost is sh. 10 per kilogramme and the firm has a total of 500 kilogrammes..
2. Labour is paid at sh. 10 per hour and is limited to 360 hours.
Required:
(a) Determine the limiting factor [4 marks]
(b) Calculate the production mix that would maximize profit for the month. [6 marks]
(c) Calculate the profit that would be realized if the firm produced the quantity computed in (b) above. [5 marks]
(d) Calculate the increase in profit if an extra 80 production hours are made available.
[5 marks]
Question Four
(a) Agnes Onyango and Peter Ochieng, decided to venture into the same business in the year 2012. They sell the same type of product in the same type of market.
They have provided the following budgeted income statement for the year ending 30 June 2014:
Agnes’ Business Peter’s Business
Sh. ‘000’ Sh. ‘000’
Sales 600,000 600,000
Variable cost 480,000 400,000
Fixed cost 60,000 140,000
540,000 540,000
60,000
====== 60,000
=====
Required:
(i) Break-even point of each business. [2 marks]
(ii) The sales volume at which each business will earn a profit of sh. 20,000,000 [6 marks]
(b) XYZ Ltd manufactures a single product. The standard cost per unit is as follows:
Sh
Direct materials 8.00
Direct labour 30.00
Variable selling cost 2.00
______
40.00
======
Additional information:
1. The budgeted fixed production overheads per annum amount to sh. 7,200,000.
2. The normal production level per annum is 2,400,000 units.
3. In the month of April 2013, the number of units produced and sold were 240,000 units and 200,000 units respectively.
4. The fixed selling cost per month amounts to sh.1, 500,000
5. The selling price per unit is sh. 50
6. There are no opening inventories.
Required:
Income statement for the month of April 2013 using
(i) Absorption costing [6 marks]
(ii) Marginal costing [6 marks]
______________________________________________________________________________
More Question Papers
Popular Exams
Return to Question Papers