Introduction to Cost

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CONFIDENTIAL

AC/OCT 2010/ACC116/165/211

UNIVERSITI TEKNOLOGI MARA FINAL EXAMINATION

COURSE COURSE CODE EXAMINATION TIME

INTRODUCTION TO COST ACCOUNTING / COST ACCOUNTING ACC116/165/211 OCTOBER 2010 3 HOURS

INSTRUCTIONS TO CANDIDATES 1. 2. 3. This question paper consists of five (5) questions. Answer ALL questions in the Answer Booklet. Start each answer on a new page. Do not bring any material into the examination room unless permission is given by the invigilator. Please check to make sure that this examination pack consists of: i) ii) the Question Paper an Answer Booklet - provided by the Faculty

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO
This examination paper consists of 7 printed pages
© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

CONFIDENTIAL QUESTION 1 a)

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AC/OCT 2010/ACC116/165/211

State three (3) purposes of providing cost information to the company. (3 marks)

b)

Define the following terms i. ii. iii. Variable cost Fixed cost Mixed cost (3 marks)

c)

Listed below are various types of cost that are found in several organizations: i. ii. iii. iv. v. vi. vii. viii. ix. x. xi. xii. Interest expense on Najla Berhad's long-term debt Supervisor's salary at PSA Manufacturing Company Depreciation of cash register at Bukit Matahari Supermarket Developing a new product at the laboratory Air-conditioners maintenance cost at ABC corporate headquarters The cost of chickens used at Local Fried Chicken outlet Market survey undertaken by Sonia Electronics Berhad prior to a new product launch Cost of button in 'Nonoy Boutique' factory Fire Insurance on CD Bank's branch office Audit fees paid by a public listed company Fruits in a can produced by Fruitale Company Depreciation of delivery van of Keo's Company

Required: Classify each of the above cost items according to its function as follows: Administration cost Finance cost Production cost Selling and distribution cost Research and development cost

(6 marks) (Total: 12 marks)

© Hak Cipta Universiti Teknologi MARA

CONFIDENTIAL

CONFIDENTIAL QUESTION 2 A.

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AC/OCT 2010/ACC116/165/211

Company KK produces 2,000 bottles of orange juice per year. A bottle of orange juice uses 3 kg of oranges. Costs of oranges are RM6 per kg. Cost of ordering the orange is RM25 per order and stockholding cost is 10% per year. Required: a) Determine the Economic Order Quantity (EOQ) for the orange using EOQ Equation. (5 marks) Explain the overall objective of inventory control. (2 marks)

b)

B.

JJ Bhd. uses one type of material to produce its product. They purchase material from one single supplier KK Company. The management of JJ Bhd. asked you to value their closing stock of material. The method use to value the stock is First in First Out (FIFO) Method. The information of the material for the month of March 2010 are given as follows: Date March 5 7 10 15 20 25 28 Receipt 200 (RM2.00/unit) 100(RM2.10/unit) 250(RM2.20/unit) 300 units 100 units 150(RM2.25/unit) Issue to prodi

150 units

Other information available: i) ii) iii) There are 50 unit materials in store on 28 February 2010 with total value of RM95.00. 10 units which were bought on 7 March 2010 was returned to suppliers due to breakage on 9 March 2010. It is to be recorded at the latest price issued, Physical stock count on 31 March shows that 180 materials were on hand.

Required: a) You are required to prepare Store Ledger Card for March 2010. (15 marks) b) State three (3) possible reasons for the difference between the actual stock and the recorded stock in the Stores Ledger Card. (3 marks) (Total: 25 marks)

© Hak Cipta Universiti Teknologi MARA

CONFIDENTIAL

CONFIDENTIAL QUESTION 3

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AC/OCT 2010/ACC116/165/211

Cemerlang Sdn. Bhd. has skilled and unskilled workers. Unskilled workers are paid on output while skilled workers are paid on hours worked. Unskilled workers are entitled for a guaranteed minimum wage of RM1,000 per month....
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