MUKJ & Taklimat Khas JP 26062014

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Management Accounting - Pre Test 1

Instruction: Answer ALL Questions.

Question 1

State three (3) differences between management accounting and financial accounting.

Item	Management Accounting	Financial Accounting

(3 Marks)

Question 2

(Question 2 consists seven parts. Circle the correct answer).

Use the following information for Question 2 (part I until IV)

The information below taken from Freeze Company for the current year:

Standard Cost for One unit Variable overhead rate Fixed overhead rate	Two hours @ RM3 per machine hour Two hour @ RM4 per machine hour
Budget Data Budgeted output units Budgeted machine hours Budgeted variable manufacturing overhead Budgeted fixed manufacturing overhead	30,000 units 60,000 hours RM180,000 RM240,000
Actual Data Actual output units produced Actual machine hours Actual variable manufacturing overhead Actual fixed manufacturing	33,000 units 63,000 hours RM188,000 RM231,000

Part I

What is the variable manufacturing overhead flexible budget variance?

A.    RM10,000 F

B.    RM8,000 U

C.   RM9,000 U

D.   RM8,000 F

Part II

What is the variable manufacturing overhead spending variance?

A.    RM8,000 U

B.    RM1,000 F

C.   RM7,000 U

D.   RM1,000 U

Part III

What is the fixed manufacturing overhead spending variance?

A.    RM33,000 F

B.    RM9,000 F

C.   RM9,000 U

D.   RM33,000 U

Part IV

What is the fixed manufacturing overhead production volume variance?

A.    RM12,000 F

B.    RM24,000 F

C.   RM18,000 F

D.   RM24,000 U

Use the following information for Question 2 (part V until VII)

The Glassware Company sells two types of insulated window panes to window installer: Tinted and Low Tint.  The company had the following budgeted and actual data for the month of April:

	Budgeted		Actual
	Tinted	Low Tint	Tinted	Low Tint
Selling price per pane Variable cost per pane	RM25 RM15	RM20 RM10	RM26 RM14	RM19 RM10
Contribution margin per pane	RM10	RM10	RM12	RM9
Unit sales	2,400 units	2,000 units	2,300 unit	2,100 units
Fixed costs	RM8,000		RM6,000

Part V

What is the total sales volume variance based on contribution margin?

A.    RM300 U

B.    RM8,300 U

C.   RM0

D.   RM8,000 U

Part VI

What is the total sales mix variance based on contribution margin?

A.    RM301 U

B.    RM0

C.   RM602 U

D.   RM100 U

Part VII

What is the total sales quantity variance based on contribution margin?

A.    RM301 U

B.    RM301 F

C.   RM602 F

D.   RM0

(7 Marks)

Question 3

EMS manufactures lawn mowers for sale to large retailers.  It presently manufactures the carburetors for its lawn mowers in the company’s main plaint.  EMS estimates that it needs 26,000 carburetors per year.  A company has offered to sell EMS the part for RM65 each.  If EMS buys the part from outside the company instead of making it, it will not use the excess capacity for another manufacturing activity.  Since other manufacturing activities are in the plant, EMS estimates that 30% of the fixed overhead can be avoided.

The following list shows the cost if EMS manufactures the carburetors:

Raw material (per unit)…………………. Direct labor (per unit)…………………… Total fixed overhead…………………….

RM 30 20 500,000

Required to help EMS whether to make or buy the carburetors. Show(s) all the calculation details.

(11 Marks)

Question 4

The following information provided from AHH Company:

Financial Reports and Budgets for
levels of activity 74,000 units (Actual) and 80,000 units (Budget)

	Actual	Budget
Production (unit)	74,000 units	80,000 units
Variable costs:           Direct material           Direct labor           Overhead cost           Administration cost	70,000 50,000 38,200 42,400	69,800 50,600 38,000 42,000
Total variable costs	200,600	200,400
Fixed costs:	40,000	40,000
Total costs	240,600	240,400

Required:

a)    Prepare a flexible budget for the activities 74,000 and 86,000 units.

b)    Prepare a performance report for the activity 74,000 units.

(22 Marks)