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Bbm! 213R: Introduction To Management Accounting Question Paper
Bbm! 213R: Introduction To Management Accounting
Course:Bachelor Of Business Management
Institution: University Of Kabianga question papers
Exam Year:2018
UNIVERSITY OF KABIANGA.
SCHOOL OF BUSINESS AND ECONOMICS.
UNIVERSITY EXAMINATIONS.
2017/2018 ACADEMIC YEAR.
SECOND YEAR FIRST SEMESTER EXAMINATION.
FOR THE DEGREE OF BACHELOR OF BUSINESS MANAGEMENT.
COURSE CODE: BBM 213R
COURSE TITLE: INTRODUCTION TO MANAGEMENT ACCOUNTING.
INSTRUCTIONS:
1.Answer question ONE and any other THREE questions.
2. Do not write anything on the question paper. All rough working to be done on the answer booklet.
3. Credit will be given to clear presentation and workings.
QUESTION ONE.
[a]. The Managing Director of a manufacturing concern once said, " since the main objective of our firm is to know annual profit, there is no need retaining the cost accounting staff; let us pay them off and retain only the financial accounting staff in order to reduce the administrative cost. "
Required: Write a report to the Managing Director to convince him to retain the cost accounting staff.
[b]. One of the board members of Dunu manufacturing company wants to know the purchasing procedure the company adopts to procure its raw materials. As a cost accountant, outline the main purchasing procedures.
[c]. What are the costs associated with the following (i) excessive stockings? (ii) stock out?. (5 Marks)
QUESTION TWO
Shahada Ltd operates a factory consisting of two departments: Washing and Cleaning.
All activities pass through the two departments: washing Cleaning materials sh.60,000 sh.25,000 Direct wages sh.30,000 sh.40,000 Production OH sh.20,000 sh.32,000 Direct labour hours 40,000 25,000 machine hours 50,000 43,000. One of the jobs completed in the factory was job No. 807 and the following data relate to the job.
Washing Cleaning materials sh.500 sh.120 Direct wages sh.450 sh.200 Direct labour hours 900 450 Machine hours 200 150.
Required: Prepare job Cost Card in respect of Job No.807 using: (i) Direct materials percentage rate; and (ii) Direct labour hour rate of recovering production. You are to use 30% of production Overhead of the Job to recover administrative overhead and 35% of the production overhead to recover selling and distribution overhead. (15 Marks)
QUESTION THREE.
The level of stock held is controlled to enable a company operate on an economic level.
[a]. Explain briefly the following stock levels, giving the formulae of computation as appropriate: (8 Marks)
i. Minimum stock level
ii. Maximum stock level
iii. Re- order stock level
iv. Average stock level
[b]. You are required to compute;
(i) re-order stock level (ii) minimum stock level (iii) maximum stock level and (iv) average stock level using the following data: minimum usage 250 per week, maximum usage 250 per week, re-order quantity 30 unit. Delivery is between 4 to 6 weeks. (7 Marks)
QUESTION FOUR
[a]. Explain the difference between labour cost accounting and payroll accounting. (8 Marks)
[b]. Explain seven ways of avoiding or reducing labour turnover. (7 Marks)
QUESTION FIVE.
Specify and explain the factors to be considered in determining whether to utilize a single factory wide recovery rate for all production overheads or a separate rate for each cost centre, production or service department. (15 Marks)
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