Example of exam paper. Some questions come with answers that we discussed during lecture. Please tell me if I've got the wrong answer.

1. BMAC5203/MAY2012/F- FA
1
PART A
INSTRUCTIONS: 1. THERE ARE TWO (2) QUESTIONS IN THIS PART.
2. ANSWER BOTH QUESTIONS.
Question 1
For the month of March, Primax Bhd's material purchases amounted to 6,000 kilograms
at a price of RM7.30 per kilogram. Actual costs incurred in the production of 2,000 units of
products are as follows:
Direct material RM116,745 (RM18.10 per hour)
Direct labour RM30,660 (RM7.30 per kg)
The standards for one unit of Primax's product are as follows:
Direct labour 3 hour per unit at RM18 per hour
Direct material 2 kg per unit at RM7 per kg
Required:
a. Compute the direct-material price, direct materials usage, direct-labour rate and direct
labour efficiency variances. Describe whether they are favourable or unfavourable.
[12 marks]
b. Suppose the controller has asked you to investigate and submit a report on all
variances. Explain in your report the possible reasons for the variances.
[8 marks]
rroTAL: 20 MARKS]

2. BMAC5203/MAY2012/F- FA
2
Question 2
Management accounting has been defined by the Institute of Management Accountants as
the process of identification, measurement, accumulation, analysis, preparation,
interpretation, and communication of financial information used by management to plan,
evaluate, and control within an organisation and to assure appropriate use of and
accountability for its resources.
Required:
a. Identify the various users of accounting information and explain how accounting
information can be used by non-accountants (use the key words in the above
definition to support your answer).
[10 marks]
b. Discuss the difference between management accounting and financial accounting
information and explain the role of managerial accountants in an organization.
[10 marks]
[TOTAL: 20 MARKS]

3. BMAC5203/MAY2012/F- FA
3
PARTB
INSTRUCTIONS: 1. THERE ARE FIVE (5) QUESTIONS IN THIS PART.
2. ANSWER THREE (3) QUESTIONS ONLY.
Question 1
Sky Tours Sdn Bhd is a small sightseeing tour company in Kuala Lumpur. The firm
specialises in Asian tours during November and December, when the schools are closed.
Until recently, the company had not had an accounting department. Routine bookkeeping
tasks, such as billing, had been handled by an individual who had little formal training in
accounting. As the business began to grow, however, the owner recognized the need for
more formal accounting procedures. Evelyn Teoh has recently been hired as the new
financial controller, and she will have the authority to hire an assistant.
During her first week on the job, Evelyn was given the following performance report. The
report was prepared by Jeremy, the company's manager of aircraft operations, who was
planning to present it to the owner the next morning. "Look at these favourable variances
for fuel and so forth," Jeremy pointed out, as he showed the report to Evelyn. "My
operations people are really doing a great job." Later that day, Evelyn looked at the
performance report more carefully. She immediately realised that it was improperly
prepared and would be misleading to the company's owner.

4. BMAC5203/MAY2012/F- FA
4
Sky Tours Sdn Bhd
Performance report for the month of December
Actual Budget Variance
Air miles 32,000 35,000 3,000 u
RM RM RM
Revenue 112,000 122,500 10,500 u
Variable Production costs:
Direct material 17,000 17,500 500 F
Direct labour 23,500 15,000 2750 F
Machine time costs 13,100 16,250 900 F
Manufacturing overhead 24,900 35,000 3,100 F
Total variable expense 78,500 85,750 7,250 F
Contribution margin 33,500 36,750 3,250 u
Fixed expenses:
Depreciation on aircraft 2,900 2,900 -
Landing fees 1,000 900 100 u
Supervisory salaries 8,600 9,000 400 F
Selling and administrative
expenses
12,400 11,000 1,400 u
Total fixed expenses 24,900 23,800 1,100 u
Net income 8,600 121950 41350 u
Required:
a. Write a brief memo to the manager of aircraft operations explaining why the original
variance report is misleading.
- This is because the original budget airmiles differs from the actual airmiles therefore
the cost comparison is misleading
- The variances do not specify the reasons for the difference
- The performance report format must follow the contribution approach format,
because only the variable cost flexed with activities. Fixed cost remains the same.
(not applicable for this question)
- A more accurate performance report is to used flexible budget report
[3 marks]

5. BMAC5203/MAY2012/F- FA
5
b. Prepare a revised expense variance report for December, which is based on the flexible
budget prepared in requirement (a).
Flexible budget report
standard
cost/unit actual cost flexible budget variance
32,000 32,000 35,000
RM RM
revenue 3.50 112,000 112,000 -
v.production cost
direct material 0.50 17,000 16,000 (1,000) A 17,500
direct labour 0.43 23,500 13,714 (9,786) A 15,000
m.time 0.46 13,100 14,857 1,757 F 16,250
manuf o/h 1.00 24,900 32,000 7,100 F 35,000
contribution 33,500 35,429 (1,929)
less: fixed exp
depreciation on
aircraft 2,900 2,900 -
landing fee 1,000 900 (100) A
supervisory sal 8,600 9,000 400 F
S&admin 12,400 11,000 (1,400) A
net income 8,600 23,800 (829)
[11 marks]
c. Evelyn presented the revised expense report to Jeremy along with the memo explaining
why the original performance report was misleading. Jeremy did not take it well. He
complained Evelyn's interference" and pointed out that the company had been doing
just fine without her. "I'm taking my report to the owner tomorrow," Jeremy insisted.
"Yours just makes us look bad." What are Evelyn's ethical obligations in this matter?
What should she do?
[6 marks]
[rOTAL: 20 MARKS]

6. BMAC5203/MAY2012/F- FA
6
Question 2
Opac Products, Bhd has decided to introduce a new product, which can be manufactured by
either computer-assisted manufacturing system or a labour-intensive production system.
The manufacturing method will not affect the quality of the product. The estimated
manufacturing costs by the two methods are as follows:
Computer-Assisted Labour-intensive
Manufacturing System Production System
Direct material RM5.00 RM5.60
Direct labour 5DLH1 @ RM12 6.00 0.8DLH@ RM9 7.20
Variable overhead 5DLH@ RM6 3.00 0.8DLH@ RM6 4.80
Fixed overhead RM2,440,000 RM1,320,000
The company's marketing research department has recommended an introductory unit sales
price of RM30. Selling expenses are estimated to be RM500,000 annually plus RM2 for each
unit sold. (Ignore income taxes.)
Required:
a. Calculate the estimated break-even point in annual unit sales of the new product if the
company uses the (i) computer-assisted manufacturing system; (ii) labour-intensive
production system.
[8 marks]
b. Determine the annual unit sales volume at which the firm would be indifferent between
the two manufacturing methods.
[6 marks]
c. Management must decide which manufacturing method to employ. One factor it should
consider is operating leverage. Explain the concept of operating leverage. How is this
concept related to Opac Products' decision?
[6 marks]
[TOTAL: 20 MARKS]
1 DLH means direct labour hours

7. BMAC5203/MAY2012/F- FA
7
Question 3
The following information is from Rapid Corporation's financial records.
Month Sales
RM
Purchases
RM
April 72,000 42,000
May 66,000 48,000
June 60,000 36,000
July 78,000 54,000
Collections from customers are normally 70 percent in the month of sale, 20 percent in the
first month following the sale, and 9 percent in the second month following the sale. The
balance is expected to be uncollectible. All purchases are on account. Management takes
full advantage of the 2 percent discount on purchases paid for by the tenth of the following
month. Purchases for August are budgeted at, and sales for August are forecasted at
RM66,000. Cash disbursements for expenses are expected RM14,400 for the month of
August. The company's cash balance on August 1 was RM22,000.
Required:
Prepare the following schedules.
a. Expected cash collections during August. Explain your answer.
b. Expected cash disbursements during August. Explain your answer.
c. Expected cash balance on August 31. Explain your answer.
[7 marks]
[7 marks]
[6 marks]
[TOTAL: 20 MARKS]

8. BMAC5203/MAY2012/F- FA
8
3a
Collection (sales)
70% in the month of sales
20% in the first month following sales 3 instalment
9% in the 2nd month following sales
1% uncollectable (not relevant for cash budget)
Disbursement
purchases on a/c - following month of purchasing subject to 2% discount
70% 20% 9%
june june july aug
sales aug (RM)
june 5,400
june 60,000 july
aug 9%
july 70%
july 78,000 aug 20% 15,600
sept 9%
aug 70%
aug 66,000 sept 20% 46,200
oct 9%
67,200
The expected cash is Aug is RM67,200. The cash collection of aug comes from sales of june
(9%), july (20%) and the biggest comes in aug (70%)
3b
Purchases Aug
July 54,000 98% 52,920
expenses 14,400
B 67,320
C (A)-(B)+22,000
67,200-
67,320+22,000
21,880

9. 9
BMAC5203/MAY2011/F- FA
Question 4
Apex Bhd estimates the following variable manufacturing support costs for 2010 for its plant
in Sarawak.
Cost Pool Amount
RM
Activity Cost Drivers
Machine operations &
maintenance
384,000 96,000 Machine-hours
Supervision 212,000 RM2,120,000 Direct labour costs
Machine setups 880,000 4,400 Setup hours
Electric power 98,000 7,000 Kilowatt hours
Materials handling 640,000 800,000 Pounds
Quality control 504,000 3,600 Number of inspections
Total 2,718,000
Apex's Sarawak plant manufactures three different drill models at present. Cost and production
data (per unit) are presented below:
Perfect Model Deluxe Model Premium
Model
Direct materials RM24 RM30 RM36
Direct labour RM18 RM30 RM40
Machine hours 0.80 1.40 1.80
Setup hours 0.04 0.06 0.08
Kilowatt hours 0.05 0.10 0.15
Pounds 8.0 10.0 14.0
Number of inspections 0.02 0.04 0.10
Sales price RM80.00 RM120.00 RM160.00
Maximum demand 24,000 24,000 12,000
Actual production in 2010 20,000 10,000 10,000

10. 1
BMAC5203/MAY2011/F- FA
Required:
a. Estimate the product costs using the activity-based costing system.
[10 marks]
b. At present, production capacity is limited to 48,000 machine hours and capacity cannot
be expanded in the next two years. Determine the optimal production levels for 2010 that
will maximise profits. List the specific assumptions that you need to make about fixed
manufacturing, fixed selling and variable selling costs.
[10 marks]
[TOTAL: 20 MARKS]

11. BMAC5203/MAY2011/F- FA
Question 5
The following data refer to Fashion House for the year 2010:
RM
Revenue 1,950,000
Work-in progress inventory, December 31 130,000
Work-in progress inventory, January 1 140,000
Selling and administrative expenses 250,000
Income tax expense 190,000
Purchases of raw material 280,000
Raw material inventory, December,31 125,000
Raw material inventory, January 1 140,000
Direct labour 300,000
Utilities plant 140,000
Depreciation plant and equipment 160,000
Finished goods inventory, December 31 150,000
Finishes goods inventory, January 1 120,000
Indirect material 110,000
Indirect labour 115,000
Other manufacturing overhead 180,000
Required:
a. Prepare Fashion House's schedule of cost of goods manufactured for the year. Explain
your answer.
[8 marks]
b. Prepare Fashion House's schedule of cost of goods sold for the year. Explain your
answer in relation to the answer in (a).
[6 marks]
c. Prepare Fashion House's income statement for the year. Provide your comments on the
income statement.
[6 marks]
[TOTAL: 20 MARKS]
QUESTION PAPER ENDS HERE
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