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CMA611S-COST AND MANAGEMENT ACCOUNTING 201-2ND OPP-JULY 2025 |
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nAmlBIA UnlVERSITY
OF SCIEnCE Ano TECHnOLOGY
FACULTY OF COMMERCE, HUMAN SCIENCESAND EDUCATION
DEPARTMENT OF ECONOMICS, ACCOUNTING AND FINANCE
QUALIFICATION: BACHELOR OF ACCOUNTING
QUALIFICATION CODE: 07BGAC
LEVEL: 6
COURSE CODE: CMA611S
COURSE NAME: COST& MANAGEMENT ACCOUNTING201
SESSION: JULY2025
DURATION: 3 HOURS
PAPER: THEORYAND CALCULATIONS
MARKS: 100
SECOND OPPORTUNITY EXAMINATION QUESTION PAPER
EXAMINERS
Mrs Modestus, M., Ms Mkhulisi, M., Ms Shikoyeni, F .and Mr Sheehama, K.G.H.
MODERATOR Ms Kangala, H.
INSTRUCTIONS
• Answer ALL the questions in blue or black ink only. NO PENCIL.
• Start each question on a new page, number the answers correctly and clearly.
• Write clearly, and neatly showing all your workings/assumptions.
• Work with at least four (4) decimal places in all your calculations and only round off final
answers to two (2) decimal places.
• 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 QUESTION PAPER CONSISTS OF_ 4_ PAGES (excluding this front page)
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QUESTION 1
[20 Marks]
Turaco Ltd manufactures and sells a particular type of pen. On 1 December 2024, the company
budgeted to produce 4 800 pens during the year, and the fixed manufacturing overheads would
amount to N$81 600. Actual information for the year ending 31 December 2024 was as follows:
Production (units)
Sales (units)
Selling price per unit
Direct material
Direct labour
Variable production overheads
Fixed manufacturing overheads
Fixed administration costs
Variable selling costs
5 000
4 500
N$
165.00
56 500
187 500
30 000
75 000
90 000
22 500
REQUIRED:
a) Prepare the statement of profit or loss for the month ended 31 December2024 according
to the direct costing method.
(9 marks)
b) Prepare the statement of profit or loss for the month ended 31 December2024 according
to the absorption costing method.
(11 Marks)
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QUESTION 2
(30 Marks)
Chop-Your-Money Limited produces two types of luxury yachts (A and B) and employs a standard
absorption costing system. Below is the company's budgeted statement of profit or loss for the year
ending 30 June 2024 in thousands of dollars
Sales
A
N$'
'000
730.0
B
N$
'000
580.0
Total
N$
'000
1310.0
Cost of sales
Opening inventory
Production cost (A 350 units; B 180 units)
Closing inventory
Administration costs
Profit
568.0
736.3
-168.3
136.0
26.0
461.5
488.0
- 27.1
76.0
42.5
1029.5
1224.9
-195.4
212.0
68.5
The above production costs comprise variable materials, variable labour and fixed production
overheads of N$270 000 which are recovered per machine hour. There are no variable production
overheads.
Yacht A requires 18 machine hours per unit and Yacht B requires 15 machine hours per unit. The
closing inventory are valued at standard production costs per unit.
Chop-Your-Money Limited decided to change to an activity-based costing system. Factory statistics
reflect the following:
Yacht A
Yacht B
Budgeted production (number of yachts)
350
180
Yachts per production run
10
4
Inspections per production run
10
7
Number of component deliveries during the year
150
100
Number of issues from stores
800
700
Total budgeted fixed production overheads of N$270 000 per main activity cost pools were:
N$
Machining costs
90000
Set up costs
16000
Quality inspections
54000
Stores receiving
50000
Stores issues
60 000
Required:
REQUIRED:
Marks
(a) Calculate the total amount offixed production overheads to be allocated to Yachts (5)
A and B based on the traditional/absorption costing method.
(b) Calculate the budgeted production cost of one unit of Yachts A and B based on the
25
activity-based costing information given above
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QUESTION 3
{25 marks)
Yakima provides personal training service and sells clothing products to its clients. Yakima also
generates some revenue from protein drink sales. The net realizable value from drink sales is
accounted for as a reduction in the joint cost assigned to the personal training service and clothing
products. Protein drink sells for N$2.50 per bottle. The cost associated with making and packaging the
drinks is N$1.00 per bottle.
Joint cost is to be allocated to personal training service and clothing products based on net realizable
values. For May, total revenues were N$753 000 from personal training service and N$289 000 from
clothing products. The following joint cost were incurred:
Rent
Insurance
Utilities
N$
36 000
43 750
3 000
Separate costs were as follows:
Personal Training
N$
Labour
231000
Supplies
151300
Equipment depreciation
165 000
Administration
103 000
Clothing
N$
33 250
700
1200
3 700
For the month of May 2025, 2 500 bottles of protein drinks were sold.
Requirement:
(25)
a) Prepare Yakima's Profit or Loss Statement for the month of May 2025, the product & each
services information should be shown.
(18)
b) Explain the factors that should influence the choice of method when allocating joint costs to
products.
(5)
c) With an example, provide two industries that produce both joint products and by-products
(2)
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QUESTION 4
(25 Marks)
Pet Food Delights Limited, based in Okahandja, produces cat food for the retail market. The production
process involves two stages, mixing and baking. Manufacturing cost comprises materials, which are
added at the start of the process, and conversion costs (labour and overheads), which are incurred
evenly throughout production. The following details relate to the mixing process for the month of
March:
Opening WIP (39 000 kgs)
- Material
- Conversion cost
Degree of
completion
60%
40%
N$
67 350
12 045
Materials input and costs
incurred
- Materials (630 000 kgs)
- Conversion costs
837 900
396 240
Output 646 500 kgs
Closing WIP (22 500 kgs)
- Materials
- Labour
60%
40%
REQUIREMENTS:
(25)
a) Assume that Pet Food Delights Ltd uses the weighted average method of valuing
inventory. Prepare a quantity schedule or physical units, equivalent units and equivalent
unit cost for the materials and the conversion costs
(11)
Assume that Pet Food Delights Ltd uses FIFO method of valuing inventory. Prepare a (14)
b) quantity schedule or physical units, equivalent units and equivalent unit cost for the
materials and the conversion costs
End of question paper.
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