Get premium membership and access revision papers, questions with answers as well as video lessons.
Dibm 0223: Management Accounting Question Paper
Dibm 0223: Management Accounting
Course:Diploma In Business Management & Diploma In Procurement & Logistics Management
Institution: Chuka University question papers
Exam Year:2013
CHUKA
UNIVERSITY
UNIVERSITY EXAMINATIONS
FIRST YEAR EXAMINATION FOR THE AWARD OF
DIPLOMA IN BUSINESS MANAGEMENT &
DIPLOMA IN PROCUREMENT & LOGISTICS MANAGEMENT
DIBM 0223: MANAGEMENT ACCOUNTING
STREAMS: DIBM & DPLM Y2S2 TIME: 2 HOURS
DAY/DATE: THURSDAY 8/8/2013 2.30 P.M. – 4.30 P.M.
INSTRUCTIONS:
ANSWER ALL QUESTIONS.
DO NOT WRITE ON THE QUESTION PAPER.
QUESTION 1:
(a) Explain the following terms as used in accounting:
(i) Cost object [4 marks]
(ii) Relevant range [4 marks]
(b) Briefly describe process costing and its application in the industry. [7 marks]
(c) The total costs and output volumes of a manufacturing company in the first six months of the year have been as follows:
Month Output
‘000’ Total costs
‘000’
January 5 145
February 7 150
March 6 148
April 4 142
May 8 160
June 6 152
Required:
(i) Estimate the cost function using regression analysis (least squares). [7 marks]
(ii) If output hits 8500 units calculate the expected costs. [1 mark]
(iii) Calculate the cost equation using High-low method. [2 marks]
QUESTION 2:
(a) Kilio Ltd produces a single product. During the year ended 31 October 2007 the firm produced 3,000,000 units but sold only 2,400,000 units. The data below relates to the production.
‘000’
Raw material 12,000
Direct labour 7,500
Direct expenses 1,500
Factory overhead 10,000
Selling and distribution overhead Shs.4,000,000
The product is sold at Shs.20 per unit. It is estimated that 40% of the selling and distribution overheads and factory overhead are fixed. There was no opening stock.
Required:
Trading, profit and loss statement using
- Absorption costing [5 marks]
- Marginal costing [5 marks]
(b) Differentiate job order costing and contract costing. [5 marks]
QUESTION 3:
XYZ manufactures and sells one product – An infant car seat – At a price of Kshs.50. Variable cost equal Kshs. 20 per car seat. Fixed costs are 500,000. XYZ manufactures the infant car seat upon receipt of order form its customers. In 2005, it sold 30,000 units of the seat. Dick one of the customers has approached XYZ Ltd and has asked if in 2006, XYZ will manufacture a different style of car seat called Ridex. Dick will pay Kshs. 25 for each unit of Ridex. The variable cost of Ridex is estimated to be Kshs. 15 per seat. XYZ has enough capacity to produce both the infant seat and the Ridex that Dick wants without incurring any additional fixed costs. XYZ estimates that in 2006 it will sell 30,000 units of infant car seats and 20,000 units of Ridex. The CEO of XYZ Ltd checks and is surprised that breakeven sales revenues seem to increase in 2006 and asks for your advice before he accepts or rejects the offer.
Required:
(i) Calculate breakeven point in units and revenues for 2005. [4 marks]
(ii) Calculate the breakeven point in units and revenues for 2006 at the planned sales mix. [4 marks]
(iii) Explain why breakeven point in revenues calculated in (i) and ii) differs.
[2 marks]
(iv) Should XYZ Ltd accept Dicks offer? Provide supporting computations.
[5 marks]
QUESTION FOUR:
(a) Kendi Ltd is a firm operating in textile industry. The budget sales for fabric ‘S’ for the month of august 2011 are 20,000 units at a selling price of Kshs.4000 per unit.
Additional information:
1. For the production of one unit of output of fabric ‘S’, the following two components of input are used.
COMPONENT NO. OF UNITS COST OF A COMPONENT
KSHS
A
10
40
B
6
20
2. Stocks at the beginning of august 2011 are budgeted as follows:-
- 8000 units of finished products at 2100 per unit
- Components A – 32000 units at Kshs.40 per unit
B – 19200 units at Kshs. 20 per unit
3. The company plans a reduction of 50% quantity of finished stock at the end of the month and a decrease of 25% in the quantity of each input component.
Required:
(i) Sales budget [1 mark]
(ii) Production quantity budget [3 marks]
(iii) Materials usage budget [3 marks]
(b) Maple Ltd produced and sold 92,000 tyres for Kshs 40 each. Budgeted production was 100,000 tyres. The standard variable cost per tyre was as follows:
Direct materials 4kgs at Kshs 2 - 8
Direct labour: 0.8 hours at Kshs 9 - 7.20
Variable production overhead: 0.18 Machine hours at Ksh. 10 per hour
The actual production costs were:-
Direct materials purchased and used 384,000 kgs at Kshs 1.80 each
Direct labour: 70400 hours at Kshs.20 each
Variable overhead: 17280 machine hours at 10.20 per hour
Required:
Prepare a cost variance analysis for each variable cost for Maple. [5 marks]
---------------------------------------------------------------------------------------------------------------
More Question Papers
Popular Exams
Return to Question Papers