ACCA Paper F2 and FMA Management Accounting December 204 to June 205 Interim Assessment Answers To gain maximum benefit, do not refer to these answers until you have completed the interim assessment questions and submitted them for marking.
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INTERIM ASSESSMENT ANSWERS SECTION A C EOQ = ((2 30 (5,000 4))/0.92) = 2,500 units 2 B and C 3 B 4 D 5 A Materials inventory account Opening inventory (balancing item) 9 Issued to production 26 Payables for purchases 50 Returned to suppliers 3 Returned to stores 4 Written off 8 Closing inventory 26 6 C 7 A 63 OAR = 76,400/3,600 = 49 Amount absorbed = 49 5,400 = 264,600 Actual overhead (250,400) Over absorbed 4,200 63 8 60,000 Total cost per unit Fixed cost per unit = Variable cost per unit = 43 (60% of 5) = 34 Revenue Variable costs = (50 0,000) (34 0,000) = 60,000 9 A Overhead absorption rate = 5,000/0,000 =.50 per unit Overhead over-absorbed = 2,470 (9,400.50) =,630 0 B KAPLAN PUBLISHING 3
ACCA F2 AND FMA: MANAGEMENT ACCOUNTING 3,000 The formula for calculating the fixed cost (a) using linear regression is given to you in the exam: y b x a = n n 20,000 500 a = 0 5 5 a = 4,000,000 a = 3,000 2 A Variable cost per unit = (89,25 69,750)/(,500 9,000) = 7.75 3 05,000 Input = Output + CWIP 0,000 = 7,000 + 3,000 EU Material Conversion Output 7,000 7,000 CWIP 3,000,800 Total EU 0,000 8,800 Cost per EU Material = 90,000/0,000 = 9 Conversion = 52,800/8,800 = 6 Value of output = (9 + 6) 7,000 = 05,000 4 A 5 A Marginal costing profit 25,000 2,000 0.5 =,000 Absorption costing profit 26,000 Idle time + General overtime = (5 hrs 2) + ((0 hrs 4 hrs) 6) = 26 6 C Re-order level to ensure that stockouts are avoided = 500 units 2 weeks =,000 units 4 KAPLAN PUBLISHING
INTERIM ASSESSMENT ANSWERS 7 A Average inventory = (2,000 units/2) + ((,000 units (300 units 2 weeks)) =,400 units 8 292 Cost per unit = (8,230 7)/(,700 34) = 4.93 Description Kg s Total cost Process account Description Kg s Total cost Material,700,830 Normal loss 34 7 Labour 2,560 Output,600 7,888 Overheads 3,840 Abnormal loss 66 325,700 8,230,700 8,230 9 A Description Kg s Total cost Abnormal loss account Description Kg s Total cost Abnormal loss 66 325 Scrap 66 33 Income statement 292 66 325 66 325 Re-distribute maintenance: 60% to Assembly. (Ignore Admin as this is not a production cost.) OAR = (90,000 + 6,000)/0,000 machine hours = 9.60 20 C 2 A Working hours 80% 20.0 hours Idle time 20% 52.5 hours Total hours 00% 262.5 hours 7.50 =,968.75 22 B Fixed cost = 7,250 Variable cost = 37 250 = 9,250 Total cost = 6,500 KAPLAN PUBLISHING 5
ACCA F2 AND FMA: MANAGEMENT ACCOUNTING 23 D Total joint costs = 2,000 + 7,000 + 5,000 = 24,000 Total sales value Product X = 3,000 7 = 2,000 Product Y = 9,000 5 = 45,000 Joint cost apportioned to Y = 24,000/(2,000 + 45,000) 45,000 = 6,364 24 A and C 25 B 26 B 27 D Order quantity = 750 Order quantity =,000 28 C Order cost 300 2/750 7.5 84 Order cost 300 2/,000 7.5 63 Holding cost 0.2.2 750/2 84 Holding cost 0.2.2 0.96,000/2 08 Purchase cost 300 2.2 4,032 Purchase cost 300 2.2 0.96 3,87 Total cost 4,200 4,042 Change in cost = 4,200 4,042 = saving of 58. OAR = 375,000/5,000 = 25.00 per unit Amount absorbed = 25.00 7,000 425,000 Actual overhead (48,000) Over-absorbed 7,000 6 KAPLAN PUBLISHING
INTERIM ASSESSMENT ANSWERS 29 D Normal loss = 0% 400 = 40 litres Actual loss = 400 330 = 70 litres Abnormal loss = 70 40 = 30 litres EUs Material Conversion Output 330 330 Normal loss 0 0 Abnormal loss 30 8 360 348 Cost per EU Material = (400 8)/360 = 8.89 Conversion = 4,800/348 = 3.79 Valuation of output 330 (8.89 + 3.79) = 7,484 30 B 3 C 32 B 360/505 90 = 64 33 A and C 34 C OWIP + Input β = Output + CWIP 2,000 +,000 = 9,000 + 4,000 EU Material Conversion OWIP to be finished 0,000 Start to Finish 7,000 7,000 CWIP 4,000 2,000 Total EU,000 0,000 KAPLAN PUBLISHING 7
ACCA F2 AND FMA: MANAGEMENT ACCOUNTING 35 D Cost per EU Material = 0,46/,000 = 0.95 Conversion = 24,700/0,000 = 2.47 Completed output Completing OWIP =,000 2.47 = 2,470 Completed in period = 7,000 (0.95 + 2.47) = 23,947 OWIP b/f costs = 3,583 Valuation = 30,000 8 KAPLAN PUBLISHING
INTERIM ASSESSMENT ANSWERS SECTION B ARMADILLO LTD (a) 7,000 50% + 8,000 20% + 7,000 30% = 7,200 (b) 8,000.02 0.985 0.985 = 7,97 (c) 2,000 + (6,000 2) = 2,500 (d) (50,000 20) + (50,000 0.084 2) = 2,850 (a) (b) (c) (d) Total ACCA Marking scheme October receipt November receipt December receipt Identification of November as amount to be paid Correct application of inflation Inclusion of wages Calculation of monthly rent Non-inclusion of depreciation Calculation of monthly lump sum repayments Calculation of interest Marks 0.5.5 0.5.5 0 KAPLAN PUBLISHING 9
ACCA F2 AND FMA: MANAGEMENT ACCOUNTING 2 WELLYBOOT MANUFACTURING (a) (b) Production budget Blue boot Red boot Sales volume 850,250 Less: Opening inventory 65 365 Add: Closing inventory 92 270 942,520 Production volume (units) 777,55 Raw material purchases budget (litres) Blue boot Red boot Total (litres) Production volume (units) 777,55 Material content per unit 7 litres 8 litres Usage 5,439 9,240 4,679 Less: Opening inventory (2,400) Add: Closing inventory 3,62 Purchases litres of material 5,44 (c) Raw material purchases budget (cost) Purchases 5,44 litres 2 per litre = 85,292 (d) Direct labour budget (standard hours) Blue boot Red boot Total (hours) Production volume (units) 777,55 Standard hours per unit 0 6 Standard hours produced 7,770 6,930 Total hours employed 4,700 Normal hours (30 37 hrs 3) 4,430 Overtime hours 270 0 KAPLAN PUBLISHING
INTERIM ASSESSMENT ANSWERS (e) Direct labour budget (cost) Normal hours 4,430 hours 8/hr 5,440 Overtime 270 hrs 0/hr 2,700 Total direct labour cost 8,40 (a) (b) (c) (d) (e) Calculation of closing finished goods Calculation of production requirement Calculation of usage Calculation of closing raw materials Calculation of purchases in litres Correct answer Calculation of total hours Calculation of overtime hours Correct answer ACCA Marking scheme Marks 2 0.5.5 Total 0 Note: allow follow through marks KAPLAN PUBLISHING
ACCA F2 AND FMA: MANAGEMENT ACCOUNTING 3 BAY CLEANING LTD Actual Flexed budget Production and sales volume (drums) 20,000 20,000 Variance F/A Sales 630,000 600,000 30,000 F Variable costs Materials 264,000 252,000 2,000 A Labour 94,000 90,000 4,000 A Semi-variable costs Power 83,500 82,000,500 A Water 7,500 7,000 500 A Other overheads 2,500 2,400 00 A Fixed costs Production 40,000 35,000 5,000 A Administration 30,000 27,500 2,500 A Selling and distribution 3,000 30,000,000 A Operating profit 57,500 54,00 3,400 F 0.5 marks for each correctly entry ACCA Marking scheme Marks 0 2 KAPLAN PUBLISHING