This document contains 4 questions regarding cost accounting concepts. Question 1 involves calculating manufacturing overhead rates and variances. Question 2 involves calculating work-in-process balances and equivalent units. Question 3 requires calculating unit costs and preparing income statements using absorption and marginal costing. Question 4 involves standard cost variances, make or buy analysis, and decision making.

1. KMJ REVISION SET 1
Question 1 (20 marks)
A. Gala Company applies manufacturing overhead to jobs on the basis of machine hours
used. Overhead costs are expected to total RM425,000 for the year, and machine usage is
estimated at 125,000 hours.
For the year, RM450,000 of overhead costs are incurred and 130,000 hours are used.
Required:
(a) Compute the manufacturing overhead rate for the year. (2 marks)
(b) What is the amount of under - or overapplied overhead at December 31? (3 marks)
(c) Assuming the under - or overapplied overhead for the year is not allocated to inventory
accounts, prepare the adjusting entry to assign the amount to cost of goods sold
(1 marks)
B.Terror Manufacturing uses a job order cost accounting system. On April 1, the company has
Work in Process Inventory of RM7,600 and two jobs in process: Job No. 221, RM3,600, and
Job No. 222, RM4,000. During April, a summary of source documents reveals the following:
For Materials Requisition Slips Labour Time Tickets
Job No. 221 RM1,200 RM2,100
222 1,700 2,200
223 2,400 2,900
224 2,600 2,800
General use 600 400
Totals RM8,500 RM10,400
Foster applies manufacturing overhead to jobs at an overhead rate of 70% of direct labour
cost. Job No. 221 is completed during the month.
Required:
(a) Prepare summary journal entries to record the raw materials requisitioned, factory
labour used, the assignment of manufacturing overhead to jobs, and the completion of Job No.
221. (8 marks)
(b) Calculate the balance of the Work in Process Inventory account at April 30. (6 marks)

2. Question 2 (20 marks)
The ledger of King Company has the following work in process account.
Work in Process—Painting
5/1
5/31
5/31
5/31
Balance
Materials
Labor
Overhead
5,300
7,740
4,110
2,470
5/31 Transferred out ?
5/31 Balance ?
Production records show that there were 700 units in the beginning inventory, 30% complete,
3,800 units started, and 4,000 units transferred. The beginning work in process had materials
cost of RM3,060 and conversion costs of RM2,240. The units in ending inventory were 40%
complete. Materials are entered at the beginning of the painting process.
Required:
(a) How many units are in process at May 31? (3 marks)
(b) What is the equivalent units for material and conversion cost? (5 marks)
(c) What is the cost /equivalent unit for material and conversion cost ? (5 marks)
(d) What is the total cost of units transferred out in May? (2 marks)
(e) What is the cost of the May 31 inventory? (5 marks)
Question 3 (20 marks)
Natural Sdn. Bhd. manufactures various types of scarf . A scarf is sold at RM60. Following
are the costs for a scarf:
Items RM
Direct material 20
Direct Labour 12
Variable Production Overhead 8
Fixed Production Overhead 6
Total cost per unit production 46
Additional Information:
Fixed Administrative cost is RM36 000 per year and commission expenses are RM2 per
unit.Fixed production overhead are RM 35 000 per month.

3. Following are the production and sale for Mac 2018:
Items Mac
Beginning Inventory 1 500
Production (unit) 5 000
Sales (unit) 4 500
Natural sdn Bhd uses a normal costing system.
Required:
(i) Calculate the cost per unit using the absorption costing method and marginal costing
method. (4.5 marks)
(ii) Prepare income statement for the month ended 31 Mac 2018 using the following
method:
(a) Absorption costing
(b) Marginal costing (12.5 marks)
(iii) Prepare net profit adjustments for both methods. (3 marks)
Question 4 (25 marks)
A.
Panas Manufacturing, which produces a single product, has prepared the following standard
cost sheet for one unit of the product.
Direct materials (6 kg at RM2 per kg) RM12
Direct labour (2 hours at RM12 per hour) RM24
Variable Overhead (2 hours at RM6) RM12
Fixed Overhead (2 hours at RM3) RM 6
During the month of April, the company manufactures 300 units and incurs the following
actual costs.
Direct materials purchased and used (1,850 kg) RM4,070
Direct labour (620 hours) RM7,130
Actual variable manufacturing overhead costs were RM3 500.
Actual fixed manufacturing overhead costs were RM2 500.
Estimated activity is 700 hours.

4. Required:
i. Calculate the price variance and quantity variance for direct materials
(4 marks)
ii. Calculate labour rate variance and efficiency variance for direct labour
(4 marks)
iii. Expenditure variance and Efficiency variance of Variable overhead
(4 marks)
iv. Budget variance and Volume variance of Fixed overhead
(4 marks)
B. Niso Sdn Bhd produce children toys. Over the years the company has made itself
one of the chips for their product. The direct materials and direct labour cost per unit to make
the chip are RM15 and RM 18 respectively. Variable overhead are 50% of direct labour cost.
Fixed overhead are RM150 000.
Recently, Syarikat Laju made an offer to sell this chip to Niso Sdn Bhd at RM45 per
unit. If the company accepts the offer half of the fixed overhead cost will be avoided and the
capacity released by not making the chip could be used to produce income RM40 000.
The company will not make the chip but purchase it at 30,000 units a year if the company
can save at least RM20,000 a year.
Should the company make of purchase the chip? Provide reason for your decision.