ACC0002 Cost and Management Accounting
Diploma Programmes
January 2025
Continuous Assessment 1 (Individual Assignment: 100 marks)
30% of Final Grade
INSTRUCTIONS TO STUDENTS:
1. This assignment consists of SEVEN written questions. Answer ALL questions. You are required to provide ALL workings clearly.
2. Type your answers in a Word document using Times New Roman, font size 12 and submit via Canvas. Assignments submitted through other ways (e.g. through email or hardcopy to the lecturer) will not be accepted.
3. Open your document in Canvas after upload to ensure that the document submitted is complete and in order.
4. Your submission should include a cover page that follows the following format:
Module Code & Module Name
Diploma Name
CA 1 (Individual Assignment)
Name
SIM Identity Number
5. Do not type the questions into your submission.
6. Deadline: 22 January 2025 11 59am.
7. Be reminded that a one day late submission is subject to a 20% mark deduction. Submissions that are late by more than one day will NOT be graded.
8. CA1 is an individual assignment and should be worked upon independently. Any form of plagiarism and/or collusion will be penalised.
Important Note:
Students caught for Plagiarism and/or Collusion will be subjected to heavy penalties.
Plagiarism & Collusion
(extracted from Student Handbook)
3.7.2 Plagiarism/Collusion
Plagiarism is theft of intellectual property. It is a form of lying, stealing and mistreating others. Students are reminded that plagiarism is a serious offence subject to the Institute’s disciplinary procedures.
Plagiarism can mean any one of the followings:
• direct copying of phrases and/or passages without a reference and/or quotation marks;
• paraphrasing another writer’s work in your written work without citing the reference;
• making a direct reference to an author you have not read although you may have read about him. The correct way is to reference the secondary source you have actually read rather than referencing the original which you have not read;
• copying the work of another student, in part or in whole;
• handing in assignment that has already been submitted for assessment in the same or any other course.
Please note that it is also a disciplinary offence for students to allow their work to be plagiarised by another student.
A student found guilty of any of the above offences will render the student liable for disciplinary actions which may result in the voiding and adjustments to the continuous assessment grade, and may result in expulsion from the Institute.
Question 1 (4 marks)
Memphis Manufacturing has the following estimated costs for the next year:
|
Factory property tax
|
$32,000
|
|
Direct material
|
$180,000
|
|
Direct labour
|
$76,000
|
|
Sales staff salaries
|
$15,000
|
|
Factory supervisors’ salary
|
$36,000
|
|
Depreciation on salespersons’ cars
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$22,000
|
|
Factory rent
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$52,000
|
|
Corporate headquarters building rent
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$47,000
|
The company estimates that 15,000 direct labour-hours will be worked during the year. If overhead is applied using direct labour hours, calculate the predetermined overhead rate per hour.
Question 2 (4 marks)
Anderson Corporation wants to develop a cost estimating equation for its monthly cost of electricity. It has the following data:
|
Month
|
Cost of Electricity
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Machine Hours (MH)
|
|
January
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$8,100
|
750
|
|
February
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$9,000
|
850
|
|
March
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$10,200
|
1,000
|
|
April
|
$8,700
|
800
|
Using the high-low method, compute the total costs when machine hours is expected to be 900
Question 3 (6 marks)
Canberra Corporation has provided the following production cost data for two levels of monthly production volume. The company produces a single product.
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Production volume
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4,000 units
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5,000 units
|
|
Direct materials
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$85.80 per unit
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$85.80 per unit
|
|
Direct labour
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$56.10 per unit
|
$56.10 per unit
|
|
Manufacturing overhead
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$73.60 per unit
|
$62.10 per unit
|
Compute the total cost to manufacture 4,400 units.
Question 4 (6 marks)
Shining Clothing applies manufacturing overhead to jobs on the basis of direct labour- hours. The following information relates to the year just completed:
|
|
Estimated
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Actual
|
|
Direct labour-hours
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15,000
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14,800
|
|
Manufacturing overhead cost
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$300,000
|
$287,120
|
How much is overhead over-applied or under-applied, stating clearly whether it is over or under applied.
Question 5 (Total 42 marks)
Design Innovative Pte Ltd consists of two production departments (Assembly and Finishing), and two service departments (Product Design and Engineering Support). The following information has been extracted from the budget for the coming year:
|
|
Assembly
|
Finishing
|
Product Design
|
Engineering Support
|
|
Estimated overhead costs
|
$477,550
|
$404,250
|
$132,000
|
$96,000
|
|
Number of employees
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30
|
65
|
10
|
15
|
|
Total machine hours
|
68,000
|
11,400
|
|
|
|
Total direct labour hours
|
4,000
|
14,000
|
|
|
Assembly department is machine intensive while Finishing department is labour intensive.
Product Design costs are re-apportioned to all other cost centres based on the number of employees. Engineering support only services the Assembly and Finishing departments and its costs are re-apportioned to these departments in the ratio of 5:3 respectively.
Required:
(Show all workings clearly and round all solutions to 2 decimal places)
(a) Showing clearly in a columnar format, calculate the total overhead costs for the Assembly and Finishing after the re-apportionment of the costs from the service departments. (24 marks)
[Marks awarded for proper presentation: 3 marks]
(b) Calculate the department overhead rates for the Assembly and Finishing using the appropriate bases. (8 marks)
(c) With the overhead absorption rates calculated in (b), calculate the total costs for a job number #2506, assuming that it has incurred the following costs:
• Direct materials $6,300
• Direct labour $5,600
and requires:
|
|
Assembly
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Finishing
|
|
Direct labour hours
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30
|
50
|
|
Machine hours
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100
|
20
|
(10 marks)
Question 6 (Total 8 marks)
Alan and Gladhill is a legal office employing 12 full-time lawyers and 10 paraprofessionals.
All costs (direct and indirect) are applied on a professional labour-hour basis that includes both lawyers and paraprofessional hours. Following is information for 2024:
Budget Actual
Indirect costs $270,000 $300,000
Annual salary of each attorney $100,000 $110,000
Annual salary of each paraprofessional $29,000 $30,000
Total professional labor-hours 50,000 dlh 60,000 dlh
The company adopts an actual costing system for billing purposes. How much should the client be billed if 120 professional labour-hours are used?
Question 7 (Total 30 marks)
Cityhall Construction Supplies Pte Ltd has a department that manufactures wood trusses (wood frames used in the construction industry). The company uses the weighted-average method in its process-costing system.
The following information is for the production of these trusses for the month of March:
|
|
Percent Completed
|
|
|
Units
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Materials
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Conversion
|
|
Work In Process, March 1
|
5,000
|
100%
|
20%
|
|
Work In Process, March 31
|
?
|
100%
|
40%
|
|
|
|
|
|
|
Work in process inventory, March 1
|
$
|
1 14,500
|
167,850
|
|
Costs added during March
|
$
|
59,500
|
92,250
|
During March, 19,000 trusses were started and 18,000 trusses were completed and transferred out.
Required:
(a) Determine the equivalent units of production for materials and conversion costs. (8 marks)
(b) Determine the cost per equivalent unit for materials and conversion costs. (8 marks)
(c) Determine the cost of ending work in process inventory in the department. (6 marks)
(d) Determine the cost of units transferred out of the department during the month. (6 marks)
[Marks awarded for proper presentation: 2m]