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MAC2601 - PAST EXAM PACK SOLUTIONS & BRIEF NOTES
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MAC2601 - PAST EXAM PACK SOLUTIONS & BRIEF NOTES
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MAC2601PRINCIPLES OF MANAGEMENT ACCOUNTING
PAST EXAM PACK QUESTIONS AND ANSWERS
(2020 – 2014)
2020 MAY/JUNE EXAM QUESTIONS AND ANSWERS
2020 SUMMARISED NOTES
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,Mac2601 may /june
First paper
Q1 absorption costing
Sales (162*105 000) 17010 000
Cost of sales (13942011)
Opening inventory (10 000*146,22) 1462 200
Direct materials (30 *98000) 2940 000
Direct labour (38*98000) 3724 000
Man overheads (50 *98000) 4900 000
Fixed man overheads(5.50*98000) 539 000
Closing inventory(3000*13565200/108000) (376811)
Gross profit 3067989
Other costs (1287 000)
Selling costs (12*105 000) 1260 000
Admin costs ( 27 000
Net profit 1780989
b)reconciliation of profits
profit under absorption costing method 1780989
c)under /over absorption
applied fixed man overheads (5.50*90 000) 495 000
actual fixed man overheads ( 560 000)
under absorption 65 000
Q2
Total machine hours used =100*550+150*800
=175000hrs
Number of set ups =150
Adventure =550/5=110
Power=800/20= 40
Number of inspections =1100*10+40*40
, =1100+1600
=2700 total inspections
NB It is 10 and 40 per every run ,so to produce 550 and 800 they were 110and 40 production runs
Cost pool Cost driver Cost/driver
Machining costs Machine hours 1750 000/175000=10/Hr
Assembly costs Number of cars 1500 000/1350=1111.11/car
Quality inspections Number of inspections 3510 000/2700=1300/insp
Stores receiving Number of parts deliverd 1740 000/696=2500/part
Stores issues Number of issues 2750 000/5500=500/issue
Allocation of costs
Details Adventure power
Machining costs (10*55000,10*120 000) 550 000 1200 000
Assembly costs (1111,11*550,1111.11*800) 611 111 888 888
Quality insp (1300*1100,1300*1600) 1430 000 2080 000
Stores receiving (2500*246,2500*450) 615 000 1125 000
Stores issues (500*2000,500*3500) 1000 000 1750 000
total 4206111 7043888
Cost per unit
Adventure =4206111/550=7647,47/car
Power =7043888/800=8804.86/car
b) ABC uses multiple activity rates while traditional method uses a single overhead rate when
apportioning overheads to products
Q3
Material price variance =(actual price –std price )actual qnty
=(58-60)295800/58
=10200 (F)
Material quantity variance=(actual qnty –std qnty)std price
=(2.5*2000-5100)60
=6000(A)
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