ACCA

Paper F2

Management Accounting

December 2011

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.

ACCA F2 MANAGEMENT ACCOUNTING

2 KAPLAN PUBLISHING

Kaplan Financial Limited, 2011

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INTERIM ASSESSMENT ANSWERS

KAPLAN PUBLISHING 3

1 A

2 D

3 B

4 A

5 D

6 C

7 A

Materials inventory account

Opening stock (balancing item) 9 Issued to production 126

Creditors for purchases 150 Returned to suppliers 3

Returned to stores 4 Written off 8

___ Closing balance 26 ___

163 ___ 163 ___

8 C

OAR = $176,400/3,600 = $49

$

Amount absorbed = $49 5,400 = 264,600

Actual overhead (250,400) _______

Under absorbed 14,200 _______

9 A

10 A

Total cost per unit Fixed cost per unit = Variable cost per unit

= $43 (60% of $15) = $34

Revenue Variable costs = ($50 10,000) ($34 10,000) = $160,000

ACCA F2 MANAGEMENT ACCOUNTING

4 KAPLAN PUBLISHING

11 C

Cost per unit = net cost of inputs / expected output

Cost per unit = (50,000 + 4,000 + 6,000 500) / (10,000 500)

Cost per unit = 6.2632

12 A

Overhead absorption rate = $15,000/10,000 = $1.50 per unit

Overhead under-absorbed = 15,000 (9,400 1.50) = 1,630

13 B

14 B

OAR = $60,000/((1 hr 10,000) + (0.25 hrs 20,000)) = $4 per hr

Blue = $4 0.25 hrs = $1

15 B

OWIP + Started = > Completed + CWIP

400 + 1,600 = > 1,700 + 300

The completed units consist of 400 OWIP that were completed this period and then a further 1,300 units that were started and finished in this period.

Equivalent units Material Conversion

OWIP to complete 0 300

Completed Output 1,300 1,300

CWIP 300 150

Total EU 1,600 1,750

Costs 100,000 86,000

Cost per EU $62.50 $49.1429

Closing WIP: Materials 300 62.50 18,750

Conversion 150 49.1429 7,371

26,121

16 A

Variable cost per unit = $(189,125 169,750)/ (11,500 9,000) = $7.75

17 C

INTERIM ASSESSMENT ANSWERS

KAPLAN PUBLISHING 5

18 A

$

Marginal costing profit 25,000

2,000 $0.5 = 1,000 ______

Absorption costing profit 26,000 ______

19 B

Average cost per litre = (10,800 360)/ (10,000 - 1,000) = 1.16 per litre

Output = 8,700 1.16 = $10,092

Abnormal loss = (10,000 1,000 8, 700) 1.16 = $348

20 A

Idle time + General overtime = (15 hrs $12) + ((10 hrs 4 hrs) $6) = $216

21 C

Re-order level to ensure that stockouts are avoided = 500 units 2 weeks = 1,000 units

22 A

Average stock = (2,000 units/2) + ((1,000 units (300 units 2 weeks)) = 1,400 units

23 C

24 A

Re-distribute maintenance: 60% to Assembly. (Ignore Admin as this is not a production cost.)

OAR = ($90,000 + $6,000)/10,000 machine hours = $9.60

25 C

EOQ = (2 $160 5,000)/$30 = 231 units

26 C

Working hours 80% 210.0 hours

Idle time 20% ____ 52.5 hours __________

Total hours 100% 262.5 hours $7.50 = $1,968.75

27 B

28 C

29 C

30 B

ACCA F2 MANAGEMENT ACCOUNTING

6 KAPLAN PUBLISHING

31 B

Fixed cost = $7,250

Variable cost = 37 250 = $9,250

Total cost = $16,500

32 C

33 A

Issue = 90 6.50 = $585

Closing Inventory = (210 6.50) + (200 6.25) + (150 6.60) = $3,605

34 B

35 C

Average cost = [$2,905 + (100 $6.35)]/(500 + 100) = $3,540/600 = $5.90

Issue = $5.90 90 = 531

Closing Inventory = $5.91 510 = $3,009

36 B

37 D

EOQ =

EOQ = $ . EOQ = 1,000 units

Total Annual Cost = PD + (Co x ) + (Ch x

)

Total Annual cost = (500 units x 12 months x $1.20) + ($20 x ,,) + (0.24 x

,

Total Annual Cost = $7,440

38 B

39 C

OAR = $375,000/15,000 = $25.00 per unit

Amount absorbed = $25.00 17,000 $425,000

Actual overhead ($418,000) _______

Over-absorbed $7,000 _______

40 B

INTERIM ASSESSMENT ANSWERS

KAPLAN PUBLISHING 7

41 A

Re-distribute maintenance: 70% to Assembly. (Ignore Sales as this is not a production cost.)

OAR = ($70,000 + $7,000)/11,000 machine hours = $7.00

42 B

Should be credited.

43 B

False this is apportionment.

44 A

45 C

46 D

47 C

48 A

49 D

Solution for 48 and 49

Completed overhead analysis sheet:

Overhead Assembly $

Finishing $

QC $

Maintenance $

Total $

Total from above 550,000 240,000 150,000 125,000 1,065,000

Reapportion maintenance

43,750

56,250

25,000

(125,000)

Reapportion QC 96,250 52,500 (175,000) 26,250 Reapportion maintenance

9,188

11,813

5,249

(26,250)

Reapportion QC 2,887 1,575 (5,249) 787

Reapportion maintenance

275

354

158

(787)

Reapportion QC 87 47 (158) 24

Reapportion maintenance

8

11

5

(24)

Reapportion QC 3 2 (5) 0

Total 702,448 362,552 0 0 1,065,000

50 B

ACCA F2 MANAGEMENT ACCOUNTING

8 KAPLAN PUBLISHING

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