TEST 1 NOV 2017_Q AND A_maf551-1.doc

109000 9600090 2 90000 86400 2 7200f ii direct

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=(10√√*9,000√ ~96,000*90%√√) 2√ =(90,000 ~86,400) 2 = 7,200F√ ii. Direct materials yield variance =(AY ~ SY)SC =9,000 √~ 126,000 √/15√)70√√ = 42,000F SC =(200K+500K)/10K = 70 iii. Direct labour rate variance = (6 ~ 7) √46,000√ =46,000A√ iv. Fixed Production Overhead Expenditure Variance =( 300,000 √*200%√ ~ 580,000√) =20,000 F (20√* 0.5 =10 marks) b. Compute the direct material price planning variance for material BB. = (10√ ~ 10*1.2√) (5*9,000) = (10~12) 45,000 = 90,000 A√ (4√*0.5=2 marks) c. Explain three (3) reasons for favourable labour rate variance. (ANY LOGICAL ANSWERS =3 marks) (Total: 15 marks) QUESTION 2 a i. Budget is a detailed plan that shows the financial consequences of an organization’s operating activities for a specific future time period √ (1√ = 1 mark) ii. 4 purposes of budgeting: a. Planning – to express a plan of action in financial terms√ b. Facilitating communication and coordination – a formal mechanism of good communication and coordination between all mangers√ c. Allocating resources – a way pf allocating resources among the users√ d. Controlling profit and operations- a benchmark to allow comparison against actual financial results√ e. Evaluating performance and providing incentive – compare actual with budgets help managers to evaluate performance√ (ANY 4 ANSWERS =4 marks) © Hak Cipta Universiti Teknologi MARA CONFIDENTIAL
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CONFIDENTIAL 5 AC/NOV 2017/TEST 1/MAF551 b. Production Budget for the year ended 31 December 2017: Topaz Ruby Units to be sold 26,000 15,000 (+) Planned Closing inventory (90% x opening inventory) 1,620√ 1,170√ Units required 27,620 16,170 (-) Planned opening inventory 1,800√ 1,300√ Units to be produced 25,820√ 14,870√ Direct Material Purchase Budget for the year ended 31 December 2017 Material X Material Y Budgeted material usage 510,180√ 547,760√ + Closing inventory (units) 16,200 12,600 - opening inventory (units) (18,000) (14,000) Budgeted material purchases (units) 508,380√ 546,360√ X cost per unit (RM) 8.00√ 10.00√ Budgeted material purchases (RM) 4,067,040√ 5,463,600√ WORKING MAT X (kg) MAT Y (kg) TOPAZ (25,820) X 14 = 361,480 X 12 = 309,840 RUBY (14,870) X 10 =148,700 X 16 = 237,920 Budgeted material usage 510,180 kg 547,760 kg
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