Management Accounting and Control (ACCM4102)
BSc. Accounting - ACC
Semester: First Semester
Level: 400
Year: 2018
THE UNIVERSITY OF BAMENDA/UNIVERSITE DE BAMENDA
FACULTY OF ECONOMICS AND MANAGEMENT SCIENCES DEPARTMENT OF ACCOUNTING
First Semester Examination for 2017/2018 Academic year Year: THREE
Course code and title: ACC 403 Management Accounting and Control Credit Value: 5 Course Status: C
Course Lecturers: Dr. Mukah Samuel / Mr. NDJAHA -NGANA Godlove
Venue: PBA06 & PBA08 Date: 21/02/2018 Time: 15:00-18:00
Instructions: Answer all the questions.
QUESTION 1: Awasum and Sons Ltd (15 marks)
Awasum and Sons Ltd. Produces and sells canned palm wine in Mbengwi which they sell for 250 CFAF
for each can. Current output is 20,000 cans per month which represents 80% of capacity. They have the
opportunity to utilize their surplus capacity by selling their product at 150 CFAF each to a supermarket
chain in Bafoussam which sell it as an “own label” product.
Total costs for last month were 3,600,000 CFAF of which 1,028,571 CFAF were fixed costs. This
represented a total cost of 180 CFAF per can.
Required:
1. Based on the above data, should Awasum accept the order of the supermarket?
2. What other factor should be considered?
QUESTION 2 20 marks
The following data relates to products Ndu Tea and Tole Tea
products
Ndu Tea
Tole Tea
Direct material per unit
1,000 CFAF 3,000 CFAF
Direct labour:
Drying and grinding
Packaging and labeling
500 CFAF per hour
750 CFAF per hour
7 hours per kg 15
hours per kg
5 hours per kg 9
hours per kg
Selling price per kg
20,650 CFAF
16,800 CFAF
Budgeted production
1,200 kg 600 CFAF
Maximum sales for the period
1,500 kg 800 kg
NOTE:
• No opening or closing inventory is anticipated.
• The skilled labour used for the drying and grinding processes is highly specialized and in short supply,
although there is just sufficient to meet the budgeted production. However, it will not be possible to
increase the supply for the budget period.
Required:
1) Determine the optimum production plan.
2) Calculate the total contribution earned for the production.
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QUESTION 3: Case of Maigod Ltd (35 marks)
Maigod Ltd is specialized in the production of a certain product P. the production process is done in two
workshops as follows:
• In the supply department, raw material M used in the production process is acquired and put at the
disposal of the production department at the transfer price (full cost).
• In the production department, M is transformed into finished product P and put at the disposal of the
distribution department.
The accounting department forecasted the following:
• Monthly normal activity: 5,000 hours
• Indirect expenses: 125,000 CFAF of which 49,000 is fixed
• Standard per unit of product
Cost type Finished products
Raw material Direct
labour Indirect expenses
2.5 kg at 4 CFAF/kg
0. 5 hour at 120 CFAF/hour
0.5 hour
During the month of January 2018 the realization was as follows:
• Initial stock of materials: 1,000 kg at 5 CFAF each
• Production: 10,000 units of P
• Purchases of material M 31,000 kg at 4 CFAF each
• Stock issued method: FIFO
• Consumption:
Cost type Quantity and value
Raw material
Direct labour
Indirect expenses
31,000 kg
6.750 hours at 100 CFAF/hour
6.750 hours for 165,750 CFAF
F
or your recruitment as intern, you are required to:
(1) Define transfer price.
(2) Determine the transfer price of material from the supply department to the production department.
(3) List the various methods of transfer pricing.
(4) List two requirements for the application of transfer pricing.
(5) Set-up the unit standard cost card.
(6) Present the comparison table between actual and standard cost.
(7) Analyze algebraically the total overhead variance.
(8) How contingency table can helps Maigod Ltd in Management and control?
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