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Bac 300 Management Accounting 1 Question Paper
Bac 300 Management Accounting 1
Course:Bachelor Of Commerce
Institution: Kenyatta University question papers
Exam Year:2012
KENYATTA UNIVERSITY
UNIVERSITY EXAMINATIONS 2011/2012
SECOND SEMESTER EXAMINATION FOR THE DEGREE OF BACHELOR
OF COMMERCE
BAC 300:
MANAGEMENT ACCOUNTING I
DATE: Tuesday, 27th March, 2012
TIME: 4.30 p.m. – 6.30 p.m.
------------------------------------------------------------------------------------------------------------
INSTRUCTIONS:
1.
Answer ALL the questions
2.
Makes allocated to each question are indicated at the end of every question.
3.
Marks will be awarded on the basis of logical and clear presentation.
Q.1
a)
Give an explanatory note on the role of management accounting in the
success of business.
(3 marks)
b)
How is the term cost explained?
(3 marks)
c)
Explain how classification of costs is useful to decision making process.
(4 marks)
(Total: 10 marks)
Q.2
The standard material cost for 100 kg of chemical D is made up of:
Chemical A - 30 kg @ sh. 4 per kg.
Chemical B - 40 kg @ sh. 5 per kg.
Chemical C - 80 kg @ sh. 6 per kg.
In a batch, 500 kg of chemical D were produced from a mixture of:
Chemical A - 140 kg at shs. 588
Chemical B - 220 kg at shs. 1050
Chemical C - 440 kg at shs. 2860.
Show how the yield, mix and the price factor contribute to the variance in the
actual per 100 kg of chemical D over the standard cost.
(20 marks)
Page 1 of 2
Q.3
The following is a statement of a company relating to their three products for the
month of October.
Products
L
M
Total
Sh.
sh.
sh.
Sales
60,000
60,000
Cost of sales
42,000
30,000
Fixed costs
36,000
a)
Compute the P/V ratio for each product.
b)
Compute the P/V ratio, beak-even point and net profit for the company
under each of the following assumptions.
i)
Sales revenue is in the ratio of 60% and 40% for L and M
respectively.
ii)
Sales revenue is in the ratio of 40% and 60% for L and M
respectively
c)
Construct a profit volume chart showing profits estimated on sales upto
sh.180,000 per month for each of the sales mix.
(20 marks)
Q.4
The following is the cost of an article at a capacity level of 5000 units as given
under A. For a variation of 25% in capacity above or below this level, the
individual expenses vary as indicated under B.
A
B
Sh.
%
Material cost
25,000
100
Labour cost
15,000
100
Power
1,250
80
Repairs and maintenance
2,000
75
Stores
1,000
100
Inspection
500
20
Depreciation
10,000
-
Administrative OH
5,000
25
Selling
3,000
50
Total cost
62,750
Cost per unit
12.55
Required:
a)
Find the unit cost of production under each individual expense at the level
of 4000 and 6000 units by preparing a flexible budget.
(15 marks)
b)
Explain what a budget means
(5 marks)
Total: 20 marks)
Page 2 of 2
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