UNIVERSITI TEKNOLOGI MARA
TEST 1 (SET 2)
COURSE : INTRODUCTION TO COST ACCOUNTING
COURSE CODE : ACC116
TEST : MAY 2023
TIME : 2 HOURS
INSTRUCTIONS TO CANDIDATES
1. This question paper consists of three (3) parts:
i. PART A - Multiple Choice Questions (5 Marks)
ii. PART B - True or False Questions (5 Marks)
iii. PART C - Short Structure Questions (30 Marks)
Total: 40 marks
2. Answer ALL questions from all parts in English.
3. Fill in the details below:
Name : _____________________________________________________
UiTM student card no. : _____________________________________________________
Programme/ Code : _____________________________________________________
Group : _____________________________________________________
4. Do not bring any material into the examination hall unless permission is given by the invigilator.
6. Please check to make sure that this test pack consists of the correct Question Paper.
DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO
This test consists of 4 pages including cover page
ACC116 TEST 1 (SET 2)
PART A
This part consists of 5 multiple choice questions. Choose the most suitable answer and write the
alphabet representing the answer in your answer sheet.
1) A purchase requisition note will be issued by the __________ to the __________.
(a) Store keeper , purchasing department
(b) Purchasing department , supplier
(c) Store keeper , supplier
(d) Purchasing department , store keeper
2) A/An _______ will be sent by the supplier to the receiving/purchasing department.
(a) Purchase order
(b) Invoice
(c) Material requisition note
(d) Inspection note
3) A store ledger card is _____________.
(a) A stock record that shows the receipts, consumptions and balance both in quantities and
values.
(b) A quantitative record of receipts, issues and closing balances of all items kept in the store.
(c) A document with details of the amount that the buyer must pay for and the date when the
payment is due.
(d) An evidence of the actual receipt of the goods which is also used for entering the receipts
of materials in the stores records.
4) The following statements are the underlying assumption of EOQ model except;
(a) Demand is known with certainty.
(b) Carrying and ordering cost is known and constant.
(c) Sales made by the firm changes throughout the year.
(d) Constant price per unit.
5) Stock discrepancies may happen because of;
(a) Proper documentation
(b) Systematic procedure of in and out of material.
(c) Clerical error.
(d) Sound controlling system.
PART B
This part consists of 5 fill in the blanks questions. Fill in the blank spaces with the appropriate
word(s) in your answer sheet.
goods received note finished goods bin card
Perpetual inventory system ordering cost inventory
First in First out Periodic inventory system holding cost
1) Quantitative records of receipts, issue and balance items of material in stores are entered in
___________.
2) Two important opposing factors in fixing the economic order quantity are __________ and carrying
cost.
3) The process of physical verification of stores at the end of each period eg monthly or annually, is
known as _______________.
4) The three categories of inventory for a manufacturer are raw material, work-in-process and
__________.
5) A system that keeps a running and continuous record that tracks inventories and cost of goods sold
on day-to-day basis is called ___________.
(Part A: 5 marks, Part B: 5 marks)
PART C
QUESTION 1
Snacks Anytime is involved in making baked banana chips for the northern region’s market. Bananas are
the most important material in making baked banana chips. The company manufactures 500,000 packs of
baked banana chips annually. Each pack of baked banana chips uses 0.3kg of bananas.
The bananas were purchased from a supplier at a purchase price of RM4 per kg. The company has to incur
RM100 for shipping cost and RM20 for inspection cost per order. The materials need to be stored and the
company will incur RM4.60 per kg as handling cost. The cost of obsolescence and deterioration of stock is
estimated at 10% of the inventory value.
The minimum consumption of bananas is 200kg and the maximum consumption is 400kg. The delivery of
bananas to the factory is within 1 to 3 days.
Required:
a. Based on the above information, you are required to determine:
i. Economic Order Quantity (EOQ).
ii. Reorder stock level.
iii. Maximum stock level.
iv. Minimum stock level.
v. Average stock level.
(round your answer to two decimal places)
(12 marks)
b. List any two (2) assumptions of Economic Order Quantity (EOQ).
(2 marks)
QUESTION 2
Cenderawasih Enterprise manufactures tea tree oil-based products. Tea tree oil is one of the main
ingredients in making the products. Due to their small storage space, the company practices First-ln First-
Out method in managing their inventory movement. On 1 March 2023, there were 2,500 litres of tea tree
oil left in the store. The first 1,500 litres were purchased in January 2023 for RM15,000. The remaining
balance was purchased in February 2023 for RM12,000. The following were the transactions which took
place in the month of March 2023.
March 2023
3 Sent 2,400 litres to production department.
7 Bought 3,100 litres at RM15.20 per litre from Good Nature Sdn Bhd.
9 Sent 1,850 litres to production department.
14 Bought 2,000 litres at RM16.20 per litre (after net of 10% discount).
17 Sent 2,750 litres to production department.
19 Returned 500 litres on material received on 14 March 2023 to supplier.
22 Bought 3,250 litres at RM18.20 per litre from Eden Sdn Bhd.
25 Sent 2,900 litres to the production department.
The physical stock-taking identified 430 litres left in the store on 28 March 2023.
Required:
a. Prepare the store ledger card for the month of March 2023 and show the closing stock value.
(15 marks)
b. Calculate the amount of net receipts of tea tree oil for the month of March 2023.
(1 mark)
