BISUNESS ORGANISATION

No Answer
1D
Difference Financial Accouting Management Accounting
Users external (shareholders, investors, customer, etc) internal (manager)
Timeframe past or histrorical future, present, and past (to forecast)
Report format by law (International Accounting Standard Flexible useful information
Example Statement of Profit or Loss Management Reporting
Statement of Financial Position Budget

2 INFORMATION AND DATA

(a)
(b)
(i) Timeliness - Information loses its value over time and it is important to meet th user's requirements in terms of
speed of profit
(ii) Accurate - Information must be accurate for planning, controlling, or decision-making purposes.
(iii) Relevant - Information should be relevant to the decision-making and important items should not contained in
a large document
(iv) Economical - Economical can mean both 'economical to use' and 'economical to provide' which the cost of
information should not outweigh the value of informationto the organisation.
(v) Understandable - Information must understandable to the person who need to use it which for example the
report should not use technical languange ie jargon

Useful information
A Accurate - precise, no wrong information
C Completeness - full coverage, no missing infformation
C Cost - benefit more outweigh than cost
U Understandable - user friendly to use information
R Reliable - correct sources of information
A Authoritative - information has been verified
T Timeliness - up to date information
E Easy to use - proper channel to communicate information

3C Quotation > Purchase order > Delivery notes > Invoice

4A Cost centre - manaage cost only

Profit centre - responsible for cost and profit
Investment centre - maximise return by investing from getting profit and minimise cost
irements in terms of

ould not contained in

which the cost of

ch for example the

MANAGEMENT INFORMATION
No Answer
5C
Data is unprocessed ie employees timesheet is a record of time not a report

6B
Cost unit - unit of cost to be charged for example cost of student per semester
Cost centre - department/location/branch/unit/centre which responsible for cost units for example faculty in university

7C
Difference Management Accounting Cost accounting
Users internal (manager) same
Timeframe future, present, and past (to forecast) same
Report Flexible useful information same
Example Management Reporting same
Budget same
Functions Planning > Coordinating > Controlling > Communicating > Motivating Planning > Controlling > Motivating

8C
Cost centre - department/location/branch/unit/centre which responsible for cost units for example faculty in university

9 CHARACTERISTICS
(a) 1. Objective - There should not be any bias in the information,
For example: Information of sales on all branches rather than one focus favourite branch.
2. Timely - The information must be produced in time for some action to be taken on it.
For example: Budget to be prepared for next year must be ready by end of this year.
3. Appropriate to the purpose - Information must be suitable in term of the levelof detail that can very
according to the user's needs

(b) Non financial information such as the number of rejects (numerical) or customers' satisfactions (non-numerical)
1. It supplements financial information - total number of rejects that might affect cost
2. It may have more immediate relevance - decision-making that relate to cost centres/departments that responsible
3. It allows for faster corrective action to be taken - to improve further on customers' comments or complaints
ample faculty in university

> Controlling > Motivating

ample faculty in university

tions (non-numerical)

tments that responsible

nts or complaints
CLASSIFICATION OF COSTS AND COST BEHAVIOUR
No Answer
10 D
Direct cost - cost that can trace directly to one unit of product
All direct costs are variable costs

11 D
TVC - upward start from zero
VC/unit - constant
TFC - constant
FC/unit - declining
Semi VC or Semi FC - upward but not start from zero

12 B
Stepped FC - fixed costs that be remain constant up to particular level of activity or units

13 C
Cost unit - unit of cost to be charged for example cost of student per semester

14
Classification
Functions Cost of sales (production costs)
Administration and Distribution (non-production costs)
Nature Direct
Indirect
Behaviour FC
VC
Semi VC or Semi FC
Stepped FC
Element Material
Labour
Expenses

15 Different costs may have different behaviour patterns in response to change in activity.
TVC - upward start from zero
VC/unit - constant
TFC - constant
FC/unit - declining
Semi VC or Semi FC - upward but not start from zero

The importance of behavioural analysis to help for planning, controlling, and decision-making.
It can help to identify incremental costs that may be incurred by decision alternatives.
CODING OF COSTS AND INCOME
No Answer
16 Sequence codes - allocates a number, or a letter to items in a simple list
For example:
Code Items
001 Ahmad
002 Ali
003 Ammar
004 Ben
005 Fatima
006 Husna
007 Tiara

(b) Block codes - these allocates bands of numbers to particular categories

For example:
Code Items
01 Boys
02 Girls

(c) Significant digit codes - individual digits and letter are used to represent features of the coded items
For example:
Codes Items
CC Cadet Club
SC Scout Club
PC Puteri Islam Club

Let say,
Ben join cadet club - CC01004
Ammar join scout club - SC01003
Tiara join puteri islam club - PC02007

Other example:
Herbal shampoo 250ml - HS250

(d) Facet codes - the digits of the codes are divided into facets of several digits and each facet represent some attribut
These codes are similar to significant digit codes but are purely numerical, which may be preferable in computer syste
For example:
Code Items
01 Johor
02 Kedah
10 Selangor

Let say, Tiara was born in Johor - 0102007

17 D
All these codes might be used in a computerised accounting system
of the coded items

ach facet represent some attribute of the item being coded

be preferable in computer system
Answers from question 18 to 23
FIFO
RECEIPT ISSUES BALANCE
DATES
1 Sep 400 2.20

5 250 150 2.20

250 2.20 550.00

10 500 2.50 1250.00 150 2.20

500 2.50

15 340 310 2.50

150 2.20 330.00
190 2.50 475.00

18 400 2.70 1080.00 310 2.50

400 2.70

27 600 110 2.70

310 2.50 775.00
290 2.70 783.00
TIC 2913.00 CI

LIFO
RECEIPT ISSUES BALANCE
DATES
1 Sep 400 2.20

5 250 150 2.20

250 2.20 550.00

10 500 2.50 1250.00 150 2.20

500 2.50

15 340 150 2.20

340 2.50 850.00 160 2.50

18 400 2.70 1080.000 150 2.20

160 2.50
400 2.70

27 600
400 2.70 1080.00 110 2.20
160 2.50 400.00
40 2.20 88.00
TIC 2968.00 CI
AVCO
RECEIPT ISSUES BALANCE
DATES
1 Sep 400 2.20

5 250 150 2.20

250 2.20 550.00

10 500 2.50 1250.00 150 2.20

500 2.50
650 2.43

15 340 2.43 826.46 310 2.43

18 400 2.70 1080.00 310 2.43

400 2.70
710 2.58

27 600 2.58 1549.47 110 2.58

TIC 2925.93 CI

Peiodic
Total cost for the period = (400*2.20) + (500*2.50) + (400*2.70)
Total cost for the period = $3210

Total units for the period = 400 + 500 + 400

Total units for the period = 1300 units

Average cost per unit ($/unit) = 3210/1300

Average cost per unit ($/unit) = 2.469

Total issue units = 250 + 340 + 600

Total issue units = 1190 units

Total issue costs = 1190*2.469

Total issue costs = $2938.11

Closing inventory units = 400 + (500 + 400) - (250 + 340 + 600)

Closing inventory units = 110

Closing inventory value = 110*2.469

Closing inventory value = $271.59

Answer no 24:
FIFO
RECEIPT ISSUES BALANCE
DATES UNIT unit/cost TOTAL UNIT cost/unit TOTAL UNIT cost/unit
12 Aug 4000 5.00 20000.00 4000 5.00

15 3900
3900 5.00 19500.00 100 5.00

19 1200 6.00 7200.00 100 5.00

1200 6.00

21 1100 200 6.00

100 5.00 500.00
1000 6.00 6000.00

24 2800 7.50 21000.00 200 6.00

2800 7.50

TIC 26000.00 CI

LIFO
DATES RECEIPT ISSUES BALANCE

12 Aug 4000 5.00 20000.00 4000 5.00

15 3900
3900 5.00 19500.00 100 5.00

19 1200 6.00 7200.00 100 5.00

1200 6.00

21 1100
1100 6.00 6600.00 100 5.00
100 6

24 2800 7.50 21000.00 100 5.00

100 6
2800 7.50

TIC 26100.00 CI
AVCO
DATES RECEIPT ISSUES BALANCE

12 Aug 4000 5.00 20000.00 4000 5.00

15 3900
3900 5.00 19500.00 100 5.00

19 1200 6.00 7200.00 100 5.00

1200 6.00
1300 5.92
21 1100
1100 5.92 6512.00 200 5.92

24 2800 7.50 21000.00 200 5.92

2800 7.50
3000 7.3946667

TIC 26012.00 CI

Periodic :

average cost/unit : (4000 x 5) + (1200 x 6) + (2800 x 7.5) / 4000 + 1200 + 2800

6.03
issue cost : (3900 + 1100) x 6.03
30150
Closing inventory : (4000 + 1200 + 2500) - (3900 + 1100) x 6.03
18090

Answer 25 :

LIFO
DATES RECEIPT ISSUES BALANCE

31-Dec 200 5.00

4-Jan 300 4.50 1350.00 200 5.00

300 4.50

6-Jan 400
300 4.50 1350.00 100 5.00
100 5.00 500.00
12 100 6 600 100 5.00
100 6.00

22 400 5.50 2200.00 100 5.00

100 6.00
400 5.50

23 400
400 5.50 2200.00 100 5.00
100 6.00

29 200 7 1400 100 5.00

100 6.00
200 7.00

30 200
200 7 1400 100 5.00
100 6.00

Total issue cost 5450.00 Closing inventory

FIFO
DATES RECEIPT ISSUES BALANCE

31-Dec 200 5.00

4-Jan 300 4.50 1350.00 200 5.00

300 4.50

6-Jan 400
200 5.00 1000.00 100 4.50
200 4.50 900.00

12 100 6 600 100 4.50

100 6.00

22 400 5.50 2200.00 100 4.50

100 6.00
400 5.50

23 400
100 4.50 450.00
100 6.00 600.00
200 5.5 1100
29 200 7 1400 100 4.50
100 6.00
200 7.00

30 200
200 7 1400 100 5.00
100 6.00

Total issue cost 3750.00 Closing inventory

880.00

330.00

330.00
1250.00

775.00

775.00
1080.00

297.00

297.00

880.00

330.00

330.00
1250.00

330.00
400.00

330.00
400.00
1080.00

242.00

242.00
880.00

330.00

330.00
1250.00
1580.00

753.54

753.54
1080.00
1833.54

284.07

284.07
TOTAL
20000.00

500.00

500.00
7200.00

1200.00

1200.00
21000.00

22200.00

20000.00

500.00

500.00
7200.00

500.00
600

500.00
600
21000.00

22100.00
20000.00

500.00

500.00
7200.00
7700.00

1184.00

1184.00
21000.00
22184.00

44368.00

1000.00

1000.00
1350.00

500.00
500.00
600.00

500.00
600.00
2200.00

500.00
600.00

500.00
600.00
1400.00

500.00
600.00

1100.00

1000.00

1000.00
1350.00

450.00

450.00
600.00

450.00
600.00
2200.00

450.00
600.00
1400.00

500.00
600.00

1100.00
LABOUR

No. Answer : Explain :

1D
2C Production centre Service centre
P1 P2 S1 S2
allocated and apportioned 257 376 107 76
Re-apportioned
S2 76 39 13 -76
Subtotal 263 417 126 0

S2 80 40 -126
Total production overhead 363 457 0 0

3A OAR = TOTAL BUDGETED OVERHEAD / TOTAL BUDGETED LABOUR HOUR

= 148750 / 8500
= 17.5

4D OH ABSORB = 17.5 x 7928

= 138740
ACTUAL OVERHEAD = 146200
UNDER ABSORB = 138740 - 146200

5A OVERHEAD ABSORB = OAR X ACTUAL HOURS LESS MORE

OVERHEAD INCURRED = ACTUAL COST MORE LESS
OVER/UNDER UNDER OVER
PROFIT CHANGES DECREASE INCREASE
COSTS RECOVERY

6B OAR = 691125 / 48500

14.25

7C OH ABSORB = OAR x ACTUAL HOURS

= 14.25 x 49775
= 709293.75
ACTUAL OH = 746625
UNDER ABSORB = (37331.25)

8B Royalty is a direct cost to an investor

9A OH ABSORB = 3 x 240000
720000
ACTUAL OH = 710000
OVER ABSORB = 720000 - 710000
= 10000

10 B OAR = 98000 / 22000

4.5
OH ABSORB = 4.5 x 22000
= 99000
ACTUAL OH = 98000
OVER ABSORB = 99000 - 98000
= 1000

11 A

12 B OH ABSORB = 16700 - 1310

= 15390
OAR = OH ABSORB / ACTUAL HOURS
= 15390 / 4050
= 3.8
OAR = BDGETED OH / BUDGETED HOURS
3.8 = BUDGETED OH / 4200
BUDGETED OH = 3.8 x 4200
= 15960

13 C OAR = 45000 / 30000

= 1.5
OH ABSORB = ACTUAL OH ABSORB + OVER ABSORB
= 49000 + 3500
= 52500
ACTUAL MACHINE HOURS = OH ABSORB / OAR
= 52500 / 1.5
= 35000

14 OAR = 118000 /14750

=8
OH ABSORB = OAR x ACTUAL HOURS
= 8 x 15100
= 120800
ACTUAL OH = 120800 + 2400 ( OH ABSORB + UNDER ABSORB)
= 123200