Cost and Management Accounting (ACCM3103)
Faculty of Economics and Management Science (FEMS)
Semester: Resit
Level: 300
Year: 2017
Section A; COST ANALYSIS
Case study one: Maigod industry
From the general accounting records of Maigod industry, you are given the following
information concerning the first trimester of 2017: ram material consumed; 1,000,000F, water
and electricity; 100,000F, consumable material; 100,000F, insurance premium; 250,000F,
personnel expense; 400,000F, linear depreciation charge on a vehicle bought at 8,000,000F
(with the life span of 5years), rent; 300,000F, transport paid on behalf of a customer; 100,000F.
After analysis of these expenses, it was revealed that;
- The market price of the vehicle is estimated at 6,000,000F with a usable duration of 4 years;
- On the personnel expenses paid: 80,000F as the unpaid salary of the previous trimester
- The opportunity cost estimated at 12% per year on the capital of 16,000,000F was not
considered
- The salary of the owner who normally supposes to be earning 1,800,000F per year was not
considered
You are required to determine for the first trimester 2017 the;
1. Difference of incorporation DI (5 marks)
2. Non incorporable expenses NIE (3 marks)
3. Suppletive expenses SE (5 marks)
4. The incorporable expenses IE (7 marks)
Case study two; CAMFAITH industry
CAMFAITH is an industry located in LIMBE. The company manufactures a finished product
“P” from the combination of raw material “M” and “N”. For the production of May 2017, you
were given the following information summarized in the table below:
❖
Situation of stock on the 01/05/2015
-
Raw material “M”: 5,000kg for 2,750,000F
-
Raw material “N”: 3,320kg for 1,494,000F
❖
Purchases of the month
-
Raw material “M”: 15,000kg at 475F/kg
-
Raw material “N”: 16,680Kg at 525F/KG
❖
Consumption for the month
-
Raw material “m”: 18,500kg
-
Raw material “N”: 19,000kg
-
Direct labour:2,880 hours at 625F/15 minutes
❖
Production for the month; 16,250units of p
❖
Sales of the month: 15,000 units of P at 4,000F each
❖
Non recoverable containers used to facilitate
distributions; 450,000f
Indirect expenses for the month
Elements Totals Auxiliary section Principal section
Stores Personnel Supplying Production distribution
Primary totals 15,792,000 1,000,000 1,760,000 212,000 12,480,000 340,000
Stores
personnel
_
_
_
1
2
_
1.5
2
6
6
0.5
1
THE UNIVERSITY OF BAMENDA
FACULTY OF ECONOMICS AND MANAGEMENT SCIENCES
Resit Course: Cost and Management Accounting: ACCT205
Credit Value:
Course Lecturers:
Time: Course Status: Date:
Venue: Instruction:
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Secondary totals ? ? ? ? ? ?
Nature of work Kg of M
Purchased
1,000f of
direct labor
1,000f of
turnover
❖ Method of stocks issues evaluation: weighted average cost method
Work required:
1. Complete the overhead absorption table. (10 marks)
2. Calculate the purchase cost of raw material M and N. (10 marks)
3. Establish the stock card of each raw material M and N in quantity and in value. (8 marks)
4. Calculate the production cost of finished product P. (8 marks)
5. Calculate the cost price of product P (10 marks)
6. Calculate the costing results of product P (4 marks)
NB; candidates are invited to present all their preliminary calculations
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