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BAC521C-BUSINESS ACCOUNTING 1A 2ND OPP -JUNE2024 |
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nAmlBIA
UnlVERSITY
OF SCIEnCEAno
TECHnOLOGY
HAROLDPUPKEWITZ
GraduateSchoool f Business
FACULTYOF COMMERCE,HUMAN SCIENCESAND EDUCATION
HAROLD PUPKEWITZGRADUATESCHOOLOF BUSINESS
QUALIFICATION: DIPLOMA IN BUSINESS PROCESSMANAGEMENT
QUALIFICATIONCODE:06DBPM LEVEL:6
COURSECODE: BAC521C
COURSENAME: BUSINESS ACCOUNTING lB
SESSION:JUNE 2024
PAPER:PAPER 1
DURATION: 3 HOURS
MARKS: 100
FIRSTOPPORTUNITYEXAMINATION QUESTIONPAPER
EXAMINER
Lameck Odada
MODERATOR Hendrina Kangala
INSTRUCTIONS
1. This question paper comprises FOUR (4) questions.
2. Answer ALLthe questions and in blue or black ink. NO pencil
3. Start each question on a new page in your answer booklet and show all workings.
4. Work with whole numbers in all your calculations and only round off only final answers
to two (2) decimal places where necessary unless otherwise stated.
5. Questions relating to this examination may be raised in the initial 30 minutes after the
start of the paper. Thereafter, candidates must use their initiative to deal with any
perceived error or ambiguities & any assumption made by the candidate should be
clearly stated.
PERMISSIBLEMATERIALS
1. Silent, non-programmable calculators
THIS QUESTION PAPERCONSISTSOF 5 PAGES(including this front page)
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QUESTION1
[20 MARKS]
Forquestions1.1-1.10, just write the answer only (the correctletter chosen)in your answer bookand
not on the question paper. Do not copythe questionagain.
1.1 Which of the following is described as the process of determining how a particular cost behaves?
a) Cost prediction
b) Cost behaviour
c) Cost estimation
d) Cost prevention
1.2 Which of the following is a forecast of cost at a particular level of activity?
a) Cost prediction
b) Cost behaviour
c) Cost estimation
d) Cost prevention
1.3 Which of the following refers to the relationship between cost and activity?
a) Cost prediction
b) Cost behaviour
c) Cost estimation
d) Cost prevention
1.4 The cost of insurance and taxes are included in
a) Cost of ordering
b) Set up cost
c) Inventory carrying cost
d) Cost of shortages
1.5 Which of the following is true for Inventory control?
a) Economic order quantity has a minimum total cost per order
b) Inventory carrying costs increases with the quantity per order
c) Ordering cost decreases with low size
d) All of the above
1.6 The time period between placing an order and its receipt in stock is known as
a) Leadtime
b) Carrying time
c) Shortage time
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d) Overtime
1.7 The best way of allocating fixed overheads between products is:
a) Equally between different products
b) As a proportion of direct cost incurred by each product
c) Basedon the number of people involved in the production of each product
d) There is no 'best' way of allocating overheads
1.8 A company absorbs overheads on machine hours which were budgeted to be 11,250 with
overheads of N$258,750. Actual results were 10,980 hours with overheads of N$254,692. Overheads
were:
a) Over-absorbed by N$2 152
b) Over-absorbed by N$4 058
c) Under-absorbed by N$4 058
d) Under-absorbed by N$2 152
Questions 1.9 and 1.10 are based on the following information:
Bushbuck Ltd supplied the following figures regarding the number of units produced during the past six
months together with the corresponding production cost:
Production units Production cost (N$)
2 000
64 500
1000
60 000
3 000
68 000
2 000
65 000
4000
72000
5 000
75 000
1.9 According to the high-low method of separating fixed and variable costs, the variable cost rate is:
a) N$1.75
b) N$4.75
c) N$2.75
d) N$3.75
1.10 According to the high-low method of separating fixed and variable costs, the fixed cost is:
a) N$56 250
b) N$42 250
c) N$37 500
d) N$47 500
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QUESTION 2
[25 MARKS]
Plastic PackagingLimited manufactures and sells plastic containers used in the pharmaceutical industry in
Namibia. The factory where production takes place is comprised oftwo production departments (Cutting
and Shaping), and two service departments -(Service A and Service B). The information provided below
has been extracted from the company's budget for the next financial year, which ends on 31 March 2025:
Allocated overhead cost
Cutting Department
Shaping Department
Service department A
Service department B
N$
140 000
160 000
35 000
28000
Other Production Overheads
Factory rent
Factory building insurance
Plant and machinery insurance
Plant and machinery depreciation
Canteen subsidy
N$
5 250 000
700 000
390 000
585 000
1500 000
The following information is also provided:
Production Departments
Cutting
Shaping
Floor area (m2)
18 000
12 000
Value of Plant and Machinery (N$)
3 000 000
500 000
Number of requisitions
1000
500
Maintenance hours
2 700
2 000
Number of employees
34
60
Machine hours
12 000
2 200
Labour hours
Additional information:
9 000
15 000
Service Departments
Service A
Service B
3 000
2 000
250 000
150 000
300
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• Secondary allocation should be done on the following bases:
Service department A - number of requisitions.
Service department B - maintenance hours.
• Calculation ofthe Predetermined/Absorption rate should be done on the following bases:
Cutting department- machine hours
Shaping department - labour hours
REQUIRED: (Work with whole numbers for allocation and re-apportionment)
MARKS
Perform the primary overhead apportionment showing the allocation of each 15
a)
overhead item. Indicate the basis of apportionment for each overhead.
Using the step method, re-apportion the service department costs and calculate the 10
b)
overhead absorption rate for each production department to the nearest dollar.
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QUESTION 3
[25 MARKS]
The timesheet of employee Danielle shows that she worked 44 hours during a 40-hour workweek. The
normal overtime remuneration {1½ x normal wage) is paid. Her normal wage is N$6 per hour. Medical aid
and pension fund contributions (3% and 5% of normal wages respectively) are paid on an equal basis by
employer and employee. PAYE{12% of taxable income) is the only other deduction being made.
REQUIRED: (Work with whole numbers for all your calculations)
MARKS
a) Calculate the net earnings of employee Danielle for the week.
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Assuming that a year consists of 52 working weeks, that Danielle gets 3 weeks of holiday leave per year,
and that the enterprise is closed for eight (8) public holidays during the year. Normal idle time is
budgeted as 7½% and a holiday bonus equal to 3 weeks' wages is paid.
b) Determine the total annual labour cost to the nearest dollar
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c) Calculate the annual productive labour hours to the nearest whole number
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Define the Labour Recovery Rate and determine the labour tariff per hour for
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d)
employee Danielle to the nearest dollar.
QUESTION 4
[30 MARKS]
FG is a public sector organisation using an incremental budgeting approach and is preparing its cash
budgets for January, February, and March. Budgeted data is as follows:
November December January February March
Sales (units)
750
800
800
850
900
Production (units)
800
800
850
. 900
950
The selling price per unit is N$200. The purchase price per kg of raw material is N$25. Each unit of
finished product requires 2kgs of raw materials which are purchased on credit in the month before they
are used in production. Suppliers of raw materials are paid one month after purchase. All sales are on
credit. 80% of customers, by sales value, pay one month after sale and the remainder pay two months
after sale. The fixed overheads (N$80,000 per month) are paid in the month in which they are incurred.
Machinery costing N$100, 000 will be delivered in February and paid for in March. The opening cash
balance on 1 January is estimated to be N$15,000.
REQUIRED:
MARKS
Prepare a cash budget for each of the three months January, February, and March.
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END OF EXAMINATION QUESTION PAPER
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