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CAH610S - COST AND MANAGEMENT ACCOUNTING FOR HOSPITALITY AND TOURISM - 1ST OPP - NOVEMBER 2022 |
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nAmlBIA UnlVERSITY
OF SCIEn CE Ano TECHn OLOGY
FACULTYOFCOMMERCEH, UMANSCIENCEAS ND EDUCATION
ECONOMICS,ACCOUNTINGAND FINANCE
QUALIFICATIONCODE:07BHOM & 07BOTM
COURSECODE:CAH610S
DATE: NOVEMBER 2022
LEVEL:6
COURSENAME: COST& MANAGEMENT
ACCOUNTING FOR HOSPITALITY& TOURISM
MODE: FT
DURATION: 3 HOURS
MARKS: 100
EXAMINER(S)
MODERATOR:
FIRSTOPPORTUNITYEXAMINATION PAPER
Sheehama, K.G.H.
Odada, L.
INSTRUCTIONS
1. Answer ALL the questions.
2. Write clearly and neatly.
3. Number the answers clearly.
NON - PROGRAMMABLECALCUTOR
1. Examination paper
2. Examination script
THIS QUESTION PAPERCONSISTSOF 7 PAGES(INCLUDING THIS FRONT PAGE)
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QUESTION 1
(26 MARKS)
Each of the following questions (1. -10) has only ONE correct answer. Please answer this
question ON the answer sheet provided. E.g. 1. D
Use the following information to answer 1- 3:
An organisation has the following total costs at two activity levels:
Activity level (units)
15 000
24 000
Total costs
N$380 000
N$452 000
Variable cost per unit is constant in this range.
1. Variable cost per unit in this activity range is:
A
N$23.33
B
N$18.83
C
N$9.00
D
N$8.00
2. The amount of total fixed costs in this range is:
A
N$380 000
B
N$452 000
C
N$260 000
D
N$360 000
3. What are the total costs at an activity level of 18 000 units?
A
N$380 000
B
N$452 000
C
N$440 000
D
N$404000
Use the following information to answer 4 and 5:
Kandongo Wood Joinery, a friend of yours, has recently set up a small business making chairs. He has
supplied you with the following figures, and has asked for your advice on a few issues:
Costs per month
N$
Wood
40 000
Carpenter
54 000
Manufacturing overheads
20 000
The above total production costs are based on producing 600 chairs per month.
4. The cost per chair is:
A
N$118
B
N$190
C
N$138
D
N$130
5. What would be the selling price per curtain, if Kandongo Wood Joinery wanted a mark-up of 20%?
A
N$240
B
N$210
C
N$228
D
N$230
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Use the following information to answer 6 - 9:
Namwandi company Ltd makes concrete bricks made up of cement and sand. Additional
information is as follows:
N$
Building materials (bricks, cements, zincs, etc.)
100 000
Indirect labour cost
50 000
Wages of builders, electricians, and plumbers
200 000
Indirect material used
20000
Depreciation of office equipment
100 000
Other factory overhead costs
50000
6. The amount of prime cost for the period is:
A
N$300 000
B
N$350 000
C
N$400 000
D
N$450 000
7. The amount of manufacturing overheads cost for the period is:
A
N$230 000
B
N$220 000
C
N$110 000
D
N$120 000
8. Costs that are unaffected by a choice between alternatives and have been included in
the past is:
A
sunk cost
B
period cost
C
product cost
D
direct cost
9. In the code of ethics followed by management accountants, confidentiality is:
A
being honest, standing for what is right
B being courteous and decent
C not revealing or disclosing privileged or private information
D accepting the consequences of actions and decisions
10. In the code of ethics followed by management accountants, accountability is:
A
being just and unbiased
B being courteous and decent
C not revealing or disclosing privileged or private information
D accepting the consequences of actions and decisions
11. The type or branch of accounting that generates reports for the use of external
parties such as creditors, investors and government agencies is known as:
A
Financial accounting
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Managerial accounting
C Tax accounting
D Forensic accounting
12. The branch of accounting that generates reports and information for the use of
internal management is known as:
A Tax accounting
B Management accounting
C Auditing
D International accounting
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13. Wellington Ltd used a predetermined overhead rate during 2022 of N$3 per direct
labour hour, based on an estimate of 24 000 direct labour hours to be worked during
the year. Actual costs and activity during 2022 were: Actual manufacturing overhead
cost incurred, N$84 000; Actual direct labour hours worked, 27 000. The under- or
over-applied overhead for 2022 would be:
A
N$3 000 under-applied
B
N$3 000 over-applied
C
N$120 000
D
N$9 000
QUESTION 2
(20 MARKS)
Lolo Wood Store management uses Weighted Average inventory valuation method and is in
dispute on which method of inventory valuation should be used. The records currently show
that on 28 February 2022 the store had a closing balance of 600 metres worth N$6 000 in
total. The following information regarding the movement of fruits was provided to you by the
store manager during the month of March 2022. The value of metres issued to the production
has been obtained by using Weighted Average method methods of pricing material issues:
Receipts(purchases)from supplierswere asfollows:
• 1 March: Received 240 meters at N$156.25 per meters.
• 2 March: Received 100 meters at a total cost of N$16 440.
• 4 March: Received 130 meters at N$168 per meters.
The issuemade to customerswere asfollow:
• 3 March: Dispatched 200 meters.
• 5 March: Dispatched 150 meters.
REQUIRED
MARKS
Record the above movement of the inventory in the store ledger card of Lolo Wood
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Store and determine the number of units and the total value in N$ as of 10 March
2022
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QUESTION3
(20 MARKS)
Chick McFarm has developed a new recipe to cook chicken pieces and decides to open a take-
way restaurant in Katutura. Chick McFarm asks NUSTfor help with the market research.
The University finds that Chick McFarm should sell 700 pieces, on average, per month.
The following total costsare available:
• Chicken pieces
N$31500
Other ingredients:
• Salt
• Onion powder
• Garlic powder
• Olive oil
N$50
N$385
N$455
N$840
Chick McFarm provides you with total fixed costs to be occurred in take-way restaurant for
the month as follows:
• Chef salary
N$25 500
• Supervisor salary
N$SO000
• Depreciation of cooking equipment N$15 000
• Cleaner salary
N$5 000
You are required to calculatethe following total costsper month:
a) Indirect materials cost
(4)
b) Prime cost
(4)
c) Manufacturing overhead cost
(4)
d) Conversion cost
(4)
e) Indirect labour cost
(4)
QUESTION4
KGH Ltd makes and sells one product, the following information is provided:
Actual figures:
N$
Direct material
28 000
Direct labour
30,000
Variable manufacturing overheads
14000
Variable selling and administrative expenses
4000
Fixed manufacturing overheads
23 500
Fixed selling and administrative expenses
10 500
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(22 MARKS)
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Production
Units sold
Selling price
900 units
800 units
N$200
KGH Ltd use machine hours to allocate fixed manufacturing overheads.
The absorption rate is N$16 per machine hour. It normally takes 1.5 machine hours to produce
one product.
REQUIRED:
Prepare the statements of profit or loss for the period for management using:
a) Direct costing
{8)
b) Absorption costing
{12)
QUESTIONS
{12 MARKS)
The management of Penguin CC presently considers investing in a new machine which it
believes will increase productivity in its factory. The initial cash outlay will be N$334 000 and
a return of at least 12% per annum is required on all new capital projects. It is estimated that
the following cash flows will be derived from operations with this new machine:
Year
Cashflow
1
N$155 000
2
N$144000
3
N$75 000
4
N$ 61000
5
N$12161
Additional information:
The factory supervisor is of the opinion that this machine will have an economic useful life of
5 years after which it will most probably have no resale value.
REQUIRED:
Make a recommendation to the management of the corporation asto the viability of investing
in this machine. Make use of the net present value method. {12)
END OF EXAMINATION PAPER
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APPENDIXTABLE1
Present Value Tables
Number
Interest Rate per Year
of Years
1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15%
1 .990 .980 .971 .962 .952 .943 .935 .926 .917 .909 .901 .893 .885 .877 .870
2
.980 .961 .943 .925 .907 .890 .873 .857 .842 .826 .812 .797 .783 .769 .756
3
.971 .942 .915 .889 .864 .840 .816 .794 .772 .751 .731 .712 .693 .675 .658
4
.961 .924 .888 .855 .823 .792 .763 .735 .708 .683 .659 .636 .613 .592 .572
5 .951 .906 .863 .822 .784 .747 .713 .681 .650 .621 .593 .567 .543 .519 .497
6 .942 .888 .837 .790 .746 .705 .666 .630 .596 .564 .535 .507 .480 .456 .432
7 .933 .871 .813 .760 .711 .665 .623 .583 .547 .513 .482 .452 .425 .400 .376
8
.923 .853 .789 .731 .677 .627 .582 .540 .502 .467 .434 .404 .376 .351 .327
9 .914 .837 .766 .703 .645 .592 .544 .500 .460 .424 .391 .361 .333 .308 .284
10 .905 .820 .744 .676 .614 .558 .508 .463 .422 .386 .352 .322 .295 .270 .247
11 .896 .804 .722 .650 .585 .527 .475 .429 .388 .350 .317 .287 .261 .237 .215
12 .887 .788 .701 .625 .557 .497 .444 .397 .356 .319 .286 .257 .231 .208 .187
13 .879 .773 .681 .601 .530 .469 .415 .368 .326 .290 .258 .229 .204 .182 .163
14 .870 .758 .661 .577 .505 .442 .388 .340 .299 .263 .232 .205 .181 .160 .141
15 .861 .743 .642 .555 .481 .417 .362 .315 .275 .239 .209 .183 .160 .140 .123
16 .853 .728 .623 .534 .458 .394 .339 .292 .252 .218 .188 .163 .141 .123 .107
17 .844 .714 .605 .513 .436 .371 .317 .270 .231 .198 .170 .146 .125 .108 .093
18 .836 .700 .587 .494 .416 .350 .296 .250 .212 .180 .153 .130 .111 .095 .081
19 .828 .686 .570 .475 .396 .331 .277 .232 .194 .164 .138 .116 .098 .083 .070
20 .820 .673 .554 .456 .377 .312 .258 .215 .178 .149 .124 .104 .087 .073 .061
Discountfactors: Present valueof $1 to be receivedaftert years= 1/(1+ 1')'.
Number
Interest Rate per Year
of Years 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% 26% 27% 28% 29% 30%
1 .862 .855 .847 .840 .833 .826 .820 .813 .806 .800 .794 .787 .781 .775 .769
2 .743 .731 .718 .706 .694 .683 .672 .661 .650 .640 .630 .620 .610 .601 .592
3 .641 .624 .609 .593 .579 .564 .551 .537 .524 .512 .500 .488 .477 .466 .455
4 .552 .534 .516 .499 .482 .467 .451 .437 .423 .410 .397 .384 .373 .361 .350
5 .476 .456 .437 .419 .402 .386 .370 .355 .341 .328 .315 .303 .291 .280 .269
6 .410 .390 .370 .352 .335 .319 .303 .289 .275 .262 .250 .238 .227 .217 .207
7 .354 .333 .314 .296 .279 .263 .249 .235 .222 .210 .198 .188 .178 .168 .159
8 .305 .285 .266 .249 .233 .218 .204 .191 .179 .168 .157 .148 .139 .130 .123
9 .263 .243 .225 .209 .194 · .180 .167 .155 .144 .134 .125 .116 .108 .101 .094
10 .227 .208 .191 .176 .162 .149 .137 .126 .116 .107 .099 .092 .085 .078 .073
11 .195 .178 .162 .148 .135 .123 .112 .103 .094 .086 .079 .072 .066 .061 .056
12 .168 .152 .137 .124 .112 .102 .092 .083 .076 .069 .062 .057 .052 .047 .043
13 .145 .130 .116 .104 .093 .084 .075 .068 .061 .055 .050 .045 .040 .037 .033
14 .125 .111 .099 .088 .078 .069 .062 .055 .049 .044 .039 .035 .032 .028 .025
15 .108 .095 .084 .074 .065 .057 .051 .045 .040 .035 .031 .028 .025 .022 .020
16 .093 .081 .071 .062 .054 .047 .042 .036 .032 .028 .025 .022 .019 .017 .015
17 .080 .069 .060 .052 .045 .039 .034 .030 .026 .023 .020 .017 .015 .013 .012
18 .069 .059 .051 .044 .038 .032 .028 .024 .021 .018 .016 .014 .012 .010 .009
19 .060 .051 .043 .037 .031 .027 .023 .020 .017 .014 .012 .011 .009 .008 .007
20 .051 .043 .037 .031 .026 .022 .019 .016 .014 .012 .010 .008 .007 .006 .005
Note:Forexamplei,f the interestrateis 10%peryear,the presentvalueof $1receivedat year5 is S.621.
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