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CMA512S- COST AND MANAGEMENT ACCOUNTING 102- 2ND OPP- NOV 2023 |
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1 Pages 1-10 |
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1.1 Page 1 |
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nAmlBIA UnlVERSITY
OF SCIEnCE Ano TECHnOLOGY
FACULTY OF COMMERCE, HUMAN SCIENCESAND EDUCATION
DEPARTMENT OF ECONOMICS, ACCOUNTING AND FINANCE
QUALIFICATION: BACHELOROF ACCOUNTING
QUALIFICATION CODE: 07BOAC LEVEL:5
COURSE CODE: CMA512S
SESSION: JANUARY 2024
COURSE NAME: COST& MANAGEMENT ACCOUNTING 102
PAPER: THEORYAND CALCULATIONS
DURATION: 3 HOURS
MARKS: 100
SECOND OPPORTUNITY EXAMINATION QUESTION PAPER
EXAMINERS Jessy Angula; Gerhardt Sheehama and Lameck Odada
MODERATOR Helmut Namwandi
INSTRUCTIONS
1. This question paper consists of FOUR (4) questions
2. Answer ALL questions in blue or black ink only. NO PENCIL.
3. Start each question on a new page, and number the answers correctly and clearly.
4. Write clearly, and neatly showing all your formulas and workings.
5. Questions relating to this examination may be raised in the initial 30 minutes after the
start of the examination. Thereafter, candidates must use their initiative to deal with
any perceived errors or ambiguities and any assumptions made by the candidate should
be clearly stated.
PERMISSIBLE MATERIALS
• Silent, non-programmable calculators
THIS EXAMINATION QUESTION PAPER CONSISTS OF _8_ PAGES (including this cover page)
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1.2 Page 2 |
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1.3 Page 3 |
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QUESTION 1
[30 MARKS]
For questions 1.1-1.15, just write the answer only (the correct letter chosen) in your answer book
and not on the question paper. Do not copy the question again
1.1 Which of the following states how a fixed cost behaves as volume changes?
a) remains constant in total and remains constant per unit
b) remains constant in total and changes per unit
c) changes in total and remains constant per unit
d) changes in total and changes per unit
e) None of the above
1.2 Indirect labour costs are manufacturing overhead because:
a) it is easy to determine how much is used to make one product
b) they are so insignificant that you don't have to use them to make the product
c) they are difficult to track and a necessary cost to make the product
d) they are expensed as incurred
e) None of the above
1.3 The cost of window frames to a homebuilder would be what type of cost?
a) period, direct materials
b) period, indirect materials
c) product, direct materials
d) product, indirect materials
e) None of the above
1.4 Conversion costs would consist of
a) wood in a table and the worker that makes the table
b) the supervisor's wages and the worker who makes the table
c) wood in a table and the cost of utilities at the plant
d) the steel tubing in the table and the worker that makes the table
e) None of the above
1.5 The distinction between direct and indirect costs depends on whether a cost
a) is controllable or non controllable
b) can be conveniently traced to a product
c) is included in manufacturing costs
d) is paid weekly or monthly product, indirect materials
e) None of the above
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1.4 Page 4 |
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1.5 Page 5 |
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1.6 A manufacturing company makes cell phones. Conversion costs that change raw materials to
become finished products cost N$669 000. The workers on the production line were paid N$550
000. The prime cost at the manufacturing plant cost N$730 000. The company had no opening or
closing inventories of work-in-progress. What was the cost of goods manufactured for the period?
a) N$849 000
b) N$730 000
c) N$669 000
d) N$550 000
e) None of the above
The following details refer to questions 1.7 - 1.9:
Vungo Ltd has been using an overhead absorption rate based on direct labour costs. At the beginning
of the year, the company estimated that the conversion and direct labour costs would be N$540 000
and N$240 000, respectively. During the year, the company incurred N$500 000 and N$200 000, in
actual conversion and direct labour costs, respectively.
1.7 The amount of budgeted absorption overhead rate during the year was:
a) 125% of direct labour cost
b) 44% of direct labour cost
c) 125% of conversion cost
d) 40% of conversion cost
e) None of the above
1.8 The amount of applied manufactured overheads for the period was ...
a) N$120 000
b) N$150 000
c) N$250 000
d) N$220 000
e) None of the above
1.9 The amount of under/over-applied manufactured overheads for the period was ....
a) N$60 000
b) N$S0 000
c) N$40 000
d) N$30 000
e) None of the above
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1.6 Page 6 |
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1.7 Page 7 |
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1.10 Double Quality Company's direct material cost is 40% of its total prime costs, if conversion is
N$120 000 and direct labour is 70% of its total conversion costs.
The amount of direct material cost incurred during the period was ...
a) N$84 000
b) N$48 000
c) N$56 000
d) N$36 000
e) None of the above
The following information refers to questions 1.11 to 1.13:
Overton Ltd uses predetermined overhead cost rates in its job costing system. The cost rate is
calculated as a cost per labour hour. The following information relates to one month of operations.
Estimated direct labour hours for normal activity
20 000 hours
Estimated factory overhead cost in total
Actual hours worked on jobs in the month
Actual factory overhead cost incurred
N$100 000
19 000 hours
N$96 000
1.11 What is the amount of Absorption overhead rate?
a) N$5 per machine hour
b) N$5 per labour hour
c) N$4 per machine hour
d) N$4 per labour hour
e) None of the above
1.12 What is the amount of applied factory overhead?
a) N$95 000
b) N$96 000
c) N$97 000
d) N$98 000
e) None of the above
1.13 What is the amount of under-applied or over-applied overhead?
a) N$1 000 over-applied
b} N$1 000 under-applied
c) N$4 000 over-applied
d) N$4 000 under-applied
e) None of the above
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1.8 Page 8 |
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1.9 Page 9 |
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The following information refers to Questions 1.14 and 1.15:
Details
Budgeted overheads
Number of employees
Number of machine hours
Production cost centres
Cost
Cost
Cost
centre 1
centre 2
centre 3
N$150 500
N$56 000
N$108 620
40
45
55
15 000
10 000
11000
Service cost centre
Human
Resources
N$40 000
20
-
1.14 When the secondary apportionment of the overheads of the service cost centre is done, the
amount to be apportioned to Cost Centre 2 is .......
a) N$10 000
b) N$11 000
c) N$12 000
d) N$13 000
e) None of the above
1.15 The manufacturing overhead absorption rate for Cost Centre 2 is .....
a) N$6.20
b) N$6.40
c) N$6.60
d) N$6.80
e) None of the above
QUESTION 2
[25 MARKS]
August Twenty-Six Manufacturing (Pty) Ltd is a manufacturer of Specialised Garments, Footwear and
Leather products such as Personal Protective Wear, Corporate wear, School Uniforms and Shoes.
August Twenty-Six has two manufacturing departments and two service departments. Manufacturing
Department 1 is labour-intensive while Department 2 is machine-intensive. The following information
relates to August Twenty-Six Manufacturing (Pty) Ltd:
Allocated Overheads
General Overheads
Indirect Labour
Heat and Light
Repairs and Maintenance
Canteen Subsidy
Machine Depreciation
Machine Insurance
TOTAL
TOTAL
N$
86 850
Manufacturing Departments
Dept 1
Dept 2
N$
N$
32 400
29 200
Service Departments
Dept A
Dept B
N$
N$
12 400
12 850
32 000
48 600
34 700
5100
10 400
6 250
223 900
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1.10 Page 10 |
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2 Pages 11-20 |
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2.1 Page 11 |
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The following additional was extracted from the company's management accounting records
Floor area m2
Direct labour hours
Indirect labour hours
Direct labour rate per hour (N$)
Number of staff
Machine hours
Machine value (N$)
Manufacturing Departments
Dept 1
Dept 2
N$
N$
2 500
4 000
30000
5 000
30000
5 000
12
8
30
5
2 500
25 000
40000
200 000
Service Departments
Dept A
Dept B
N$
N$
1000
500
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-
-
-
-
-
-
-
10 000
Service department overheads are to be re-apportioned as follows:
Service dept A overheads
Service dept B overheads
Manufacturing Departments
Dept 1
Dept2
20%
80%
50%
50%
Data on two jobs being undertaken by the company is as follows:
Direct material cost
Machine hours
Manufacturing dept 1
Manufacturing dept 2
REQUIREMENT
Direct labour hours
Job 230
N$240
5
40
4
Job 240
N$420
20
25
5
MARKS
a) Perform the primary overhead apportionment showing the allocation of each 14
overhead item (clearly indicate the basis of apportionment, where appropriate).
Work to the nearest N$.
b) Using the step method, re-apportion the service department costs and calculate the
10
overhead absorption rate (using a basis that you deem suitable) for each
manufacturing department to two decimal places.
c) Other than the step method, identify any other method that can be used for
1
overhead apportionment
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2.2 Page 12 |
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2.3 Page 13 |
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QUESTION 3 {This question consists of two unrelated parts)
[25 MARKS]
PART A
Steve Jobs is an intern at the Pupkewitz Toyota manufacturing plant. He wants to buy a motor vehicle
and is therefore trying to determine his affordability. Mr Jobs is remunerated at N$50 per hour. He
works on average 40 hours per week. The following information is in respect of medical aid and
pension fund contributions, by employees and employer:
Medical aid (taxable)
Pension fund (non-taxable)
Pay As You Earn (PAYE)
Social Security Commission (SSC)
5% of basic/normal wage per week for employer and
employee
8% of basic/normal wage per week for both employer and
employee
33% of taxable income
Both contribute N$20 per week
Mr Jobs worked as follows for the week ending 7 October 2023:
Monday
Tuesday
Wednesday
Thursday
Friday
Saturday
Overtime is remunerated
as follows:
Hours
10
10½
8
9½
8
3
• Normal overtime: 1½ times normal time
• Sundays and public holidays: twice the normal time
REQUIRED
MARKS
Calculate the net wage for Steve Jobs for the week ended 7 October 2023 to the nearest
9
dollar
PARTB
The following information relates to Mr. B Dlamini, an employee of Strictly Signs (PTY) LTD.
Basic Salary
Telephone Allowance
Travel Allowance
Bonus
Pension contributions (Employer)
Medical contributions (Employer)
Social Security Commission contributions
Annual leave
Public holidays
Idle time
Normal working hours
(Employer)
N$ 6 500 per month
N$ 250 per month
N$ 800 per month
10% of the basic salary
7.5% of the basic salary
2.5% of the basic salary
N$81 per month
3 weeks per year
11 days
5% of available time
40 hours (5-day week)
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2.4 Page 14 |
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2.5 Page 15 |
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REQUIRED: Using 52 weeks in a year
a) Calculate the annual labour cost for Mr B Dlamini
b) Calculate the actual production hours for Mr B Dlamini
c) Calculate the hourly recovery rate for Strictly Signs (PTY) LTD
MARKS
9
6
1
QUESTION 4
[20 MARKS]
At the beginning of 2022, Vavi Ltd budgeted their manufacturing overheads to be N$460 000 for the
year. They also estimated direct labour hours for the year at 115,000. By the end of the year, the
following information was recorded:
Actual direct labour hours worked
20 600
Inventory (1 January 2022):
Raw material
Work in progress
Completed goods
Raw material purchased
Payroll summary: Direct labour
Indirect labour
Factory cleaning material
Finance charges
Depreciation: Factory plant
Office equipment
Salaries of sales staff
Sales
Inventory (31 December 2022):
Raw material
Work in progress
Completed goods
42 000
28000
22 000
184 000
150 000
30000
6 600
1600
12 000
6 000
36000
628 000
50 000
18000
30000
REQUIRED: Using 52 weeks in a year
Prepare the production statements for the year ended 31 December 2022; and prepare
the statement of adjusted cost of goods manufactured and sold (cost of sales).
MARKS
20
END OF EXAMINATION QUESTION PAPER
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2.6 Page 16 |
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