Scribd
Upload
1K views9 pages

MAF 451 Suggested Solutions - A) I) Process 1

1) The document provides the solutions to questions in MAF451. It includes calculations and explanations for 3 processes involving materials, wages, expenses, normal losses and abnormal gains/losses. 2) It also includes calculations for equivalent units, materials transferred and added costs per equivalent unit. Statements of equivalent units are provided for 3 processes. 3) The document then provides calculations and explanations for a question involving demand forecasting, minimum order quantity, production capacity, variable and fixed costs, break even point and profit comparisons.

Uploaded by

anis izzati
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
1K views9 pages

MAF 451 Suggested Solutions - A) I) Process 1

1) The document provides the solutions to questions in MAF451. It includes calculations and explanations for 3 processes involving materials, wages, expenses, normal losses and abnormal gains/losses. 2) It also includes calculations for equivalent units, materials transferred and added costs per equivalent unit. Statements of equivalent units are provided for 3 processes. 3) The document then provides calculations and explanations for a question involving demand forecasting, minimum order quantity, production capacity, variable and fixed costs, break even point and profit comparisons.

Uploaded by

anis izzati
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

MAF451 – DECEMBER 2014

MAF 451
SUGGESTED SOLUTIONS
____________________________________________________________________________

Question 1

A)
i)
Process 1
Mat A 10,000 2.00 20,000 √ To P2 14,000 √ 3.80 √ 53,200
Mat B 3,500 2.20 7,700 √ Nor Loss 750 √√
Mat C 1,500 5.50 8,250 √ Abn Loss 250 √√ 3.80 √ 950
Wages 8,000 √
Exp 6,200 √
Man OH 4,000 √
15,000 54,150 15,000 54,150

Input 15,000
Normal Loss (150,000 x 5%) 750
Expected OP 14,250
Actual OP 14,000
Abnormal Loss 250

CPU 54,150 √ - 0
14,250kg √
RM3.80
(15 X 1/3 = 5 marks)

Process 2
Fr P1 14,000 3.80 53,200 To P3 19,500 √ 4.00 √ 78,000
Material 6,000 2.00 12,000 √ Nor Loss 1,000 √ 0.90 √ 900
Wages 6,000 √
Exp 2,700 √
Man OH 3,000 √√
Abn Gain 500 √√ 4.00 √ 2,000
20,500 78,900 20,500 78,900

Input 20,000
Normal Loss 1,000
Expected OP 19,000
Actual OP 19,500
Abnormal Gain 500

1
MAF451 – DECEMBER 2014

CPU 76,900 √ - 900 √


19,000kg √
RM4.00
(15 X 1/3 = 5 marks)

Process 3
Fr P2 19,500 4.00 78,000 Final OP 19,110 4.60 √ 87,906
Wages 4,000 √ Nor Loss 390 √ 1.50 √ 585
Expenses 4,491 √
Man OH 2,000 √
19,500 88,491 19,500 88,491

Input 19,500
Normal Loss 390
Expected OP 19,110
Actual OP 19,110
Abnormal Loss -

CPU 88,491 √ - 585 √


19,110kg √
RM4.60
(9 X 1/3 = 3 marks)

ii)
Normal Loss
Cash 500 √ 0.90 √ 450
P2 1,000 0.90 900 √ Cash 390 √ 1.50 √ 585
P3 390 1.50 585 √ Abn Gain 500 0.90 450

Abnormal Loss
P1 250 3.80 950 √ Inc Stmt 950 √

Abnormal Gain
Nor Loss 500 √ 0.90 √ 450 P2 500 4.00 2,000 √
Inc Stmt 1,550 √

(12 X 1/3 = 4 marks)

2
MAF451 – DECEMBER 2014

B)
i)
Statement of Equivalent Units
Input Output Materials Trans Materials Added CC
OWIP 500 √ OWIP 500 √ 0% 20% 100 √ 50% 250 √
P1 3,500 √ CPDP 3,300 √ 100% 3,300 √ 100% 3,300 √ 100% 3,300 √
Mat Added 200 √ CWIP 400 √ 100% 400 √ 70% 280 √ 60% 240 √
4,200 4,200 3,700 3,680 3,790

Materials Transferred EU = 3,700


Materials Added EU = 3,680
CC EU = 3,790
(14 X 1/2 = 7 marks)

ii)
Materials Transferred 175,000 √ /3,700 √ OF = RM47.30
Materials Added 16,000 √ /3,680 √ OF = RM 4.35
CC 30,000 √ /3,790 √ OF = RM 7.92
(6 X 1/2 = 3 marks)

iii)
Materials 400 √ x RM47.30 = 18,920 √ OF
Materials Added 280 √ x RM4.35 = 1,218 √ OF
CC 240 √ x RM7.92 = 1,901 √ OF
22,039
(6 X 1/2 = 3 marks)
(Total: 30 marks)

3
MAF451 – DECEMBER 2014

Question 2

a
RM120,000/12mth = RM10,000 per month
10,000 √√
45 √ – 21.50 √√√√
425.53 jars

425.53 jars √ OF x RM45 √ = RM19,148.85 √


(10 x ½ = 5 marks)

b
100,000 pieces / 100 pieces = 1,000 jars

MOS = 1,000 √√ – 425.53 √ OF = 574.47 jars √√


574.47 √ OF x RM45 √ = RM25,851.15 √
(8 x ½ = 4 marks)

c
Direct materials per jar 12.00 x 110% = RM13.20 √√
Direct labour per jar 6.00 x 115% = RM 6.90 √√
Production overhead = RM 2.00
Selling overhead = RM 1.50
Total VC 23.60

FC = RM144,000/12 = RM12,000

RM12,000 √√
RM45 √ - RM23.60
560.75 jars
(7 x 1 = 7 marks)

4
MAF451 – DECEMBER 2014

d
October Profit
(45 – 21.50) √ x 1,000 jars √ – 10,000 √ = RM13,500

November Profit
FC = 10,000 + 3,000 = 13,000
SP = RM50

120,000 pieces / 100 pieces = 1,200 jars


(50 – 21.50) √ x 1,200 jars √ – 13,000 √ = RM21,200

Increase in Profit = RM21,200 - RM13,500 = RM7,700 √


(7 x 1 = 7 marks)

e
With Light Sweets Company having more fixed costs, its BEP will have to be higher √ in order
to cover √ the extra fixed cost as compared to Dee Dee Cake Company.
(2 marks)
(Total: 25 marks)

5
MAF451 – DECEMBER 2014

Question 3

a) i. current based system:


OAR = RM750,000√
(2 x 35,000) √ +(3 x 60,000) √
= RM3 per direct labor hour√ (4)

Orkid1 Orkid2
Direct material 120.00√ 135.00√
Direct labor 60.00√ 90.00√
OH 6.00√ 9.00√
Total cost 186.00 234.00
Profit (25% markup) 46.50√ 58.50√
Selling Price 232.50√ 292.50√ (10)
(14√ x ½ = 7 marks)

ii) activity based costing


ABC rate
OH Cost Cost Driver ABC Rate
Purchasing 167,000√ 2,000 orders√ 83.50
Machine related cost 133,000√ 76,000 MH√ 1.75
Production 205,000√ 485 runs√ 422.68
Receiving 150,000√ 75 requisitions√ 2,000.00
Testing 95,000√ 4,300 tests√ 22.09 (10)

Allocation of cost
ABC Rate Orkid 1 Orkid 2
Cost Cost Cost Cost
Driver Assigned Driver Assigned
Purchasing 83.50 800 66,800√ 1,200 100,200√
Machine related cost 1.75 55,000 96,250√ 21,000 36,750√
Production 422.68 235 99,330√ 250 105,670√
Receiving 2,000.00 35 70,000√ 40 80,000√
Testing 22.09 3,200 70,688√ 1,100 24,299√
Total 403,080 346,920
Unit 35,000 60,000
OH cost per unit 11.52 5.78
(10)

6
MAF451 – DECEMBER 2014

Orkid1 Orkid2
Direct material 120.00 135.00
Direct labor 60.00 90.00
OH 11.52√ 5.78√
Total cost 191.52 230.78
Profit (25% mark up) 47.88√ 57.70√
Selling Price 239.40√ 288.48√
(6)
(26√x ½ = 13 marks)
(Total: 20 marks)

7
MAF451 – DECEMBER 2014

Question 4

a (i) Marginal costing approach


RM RM
Sales (58,000 @ RM125) 7,250,000 √√
Less: Variable cost of production(55,000 @ RM60) 3,300,000 √√
Add: Opening inv (10,000 @ RM60) 600,000 √√
3,900,000
Less: Closing inv (7,000 @ RM60) (420,000) √√ (3,480,000)
3,770,000
Less: Variable S & A (58,000 @ RM5) 290,000 √√
Contribution Margin √ 3,480,000
Less: Fixed Costs
Selling & Admin 900,000 √
Factory overhead 600,000 √√ (1,500,000)
Net Profit √ 1,980,000

(ii) Absorption costing approach


RM RM
Sales (58,000 @ RM125) 7,250,000 √
Less: Full cost of production (55,000 @ RM70) 3,850,000 √√
Add: Opening inv (10,000 @ RM70) 700,000 √√
4,550,000
Less: Closing inv (7,000 @ RM70) (490.000) √√ (4,060,000)
Gross Profit √ 3,190,000
Less: Selling & Admin.
Variable 290,000 √√
Fixed 900,000 √ (1,190,000)
2,000,000
Less:
Under absorbed fixed factory overhead √ (50,000) √√
(5,000 @ RM10)

Net Profit √ 1,950,000


(30 √ X ½ = 15 marks)

8
MAF451 – DECEMBER 2014

b
. Reconciliation Profit Statement
RM
Marginal costing profit 1,980,000 √
Decrease in stock (3,000 @ RM10) (30,000) √
Absorption costing profit 1,950,000 √
(3 marks)

c
Causes for the differences in profit figure:
1. Fixed manufacturing overhead absorbed in the inventory √
2. Increase or decrease of closing inventory √
(2 marks)

d
i Units Produced = Units Sold
AC NP = MC NP √

ii Units Produced > Units Sold


AC NP > MC NP √ by the amount of Fixed Production OH costs included in the
ending inventory that results from units produced but not sold during the period √

iii Units Produced < Units Sold


AC NP < MC NP √ by the amount of the Fixed Production OH costs included in the
units sold during the period that were not produced during the period √
(5 √ X 1 = 5 marks)
(Total: 25 marks)

You might also like