BBAP2103 Management Accounting

QUESTION 1 Seehat Sdn. Bhd. involves in the operation of making yogurt and soya milk in Bandar ayangan. Throughout the month of !anuary" #ompany has made a total of $%%"%%% pa#ks of yogurt and 1%%"%%% pa#ks of soya milk. Its &'ed overhead is a(sor(ed to the produ#ts (ased on dire#t la(o la(our ur hour hour.. The The foll follo) o)in ing g is the the info inform rmat atio ion n on oper operat atio ion n of the the #ompany for the month of !anuary $%1*+

Selling pri#e Sales 0pa#ks 3ire#t la(our hour -anufa#turing #ost+ 3ire#t material 3ire#t la(our 6aria(le manufa#turing overhead 8i'ed manufa#turing manufa#turing overhead Non9manufa#turing #ost+ 6aria(le marketing marketing #ost 8i'ed marketing #ost 8i'ed administrative administrative #ost a

 ,ogurt  ,ogurt -*./% $1%"%%% 4%"%%% 1%%"%%% *%%"%%% $%"%%%

Soya -ilk -/./% 2%"%%% /%"%%% 5%"%%% $/%"%%% 7%"%%%

4%"%%%

/%"%%%

:%"%%%

7%"%%%

*%"%%% $/"%%%

7/"%%% $/"%%%

3is#us 3is#uss s )hy )hy manag managem ement ent a## a##oun ountin ting g inform informati ation on is is import important ant for for managers in Seehat Sdn. Bhd." a manufa#turing #ompany.

Smal Smalll busin business ess owne owners rs are are faced faced with with coun countl tless ess decis decisio ions ns ever every y busin busines esss day day. Manage Manageria riall account accounting ing inform informati ation on provid provides es data-dr data-drive iven n input input to these these decisio decisions, ns, which can improve decision-making over the long term. Small business managers can leve levera rage ge this this powe powerf rful ul tool tool to help help make ake thei theirr busi busine ness ss more more succ succes essf sful ul by underst understand anding ing how manage managemen mentt accoun accountin ting g benefi benefits ts common common busine business ss decisio decision n contexts.

Managerial accounting information is used by company management to determine what should be sold and how to sell it. For example, a small business owner may be unsure unsure where where he should should focus focus his marketi marketing ng effort efforts. s. To evalua evaluate te this this decisio decision, n, an accou account ntin ing g mana manage gerr coul could d exam examin inee the the cost costss that that diff differ er betw between een adve advert rtisi ising ng altern alternativ atives es for each produc product, t, ignori ignoring ng common common costs. costs. This This process process is known known as

relevant cost analysis and is a techniue that is taught in basic managerial accounting courses. The same process can be used to determine whether to add product lines or  discontinue operations.

!nce the company has determined what products to sell, the business needs to determine to whom they should sell the products. "y using activity-based costing techniues, small business management can determine the activities reuired to  produce and service a product line. #mbedded in this information is the cost of  customers. $eciding which customers are more or less profitable allows the business owner to focus advertising toward the consumers who are the most profitable.

% primary use of managerial accounting information is to provide information used in manufacturing. For example, a small business owner may be considering whether to make or buy a component needed to manufacture the company&s primary product. "y completing a make or buy analysis, she can determine which choice is more profitable. 'hile this techniue is certainly useful, small business owners should only use these analyses as a factor in the decision. There could be other non-financial metrics that are important to consider that would not be part of the analysis.

(

Based on the a(ove information" ans)er the follo)ing ;uestions+ i #al#ulate the produ#t #ost per pa#k for yogurt using a(sorption and marginal #osting methods< 0$ marks ii #al#ulate the produ#t #ost per pa#k for soya milk using a(sorption and marginal #osting methods< 0$ marks iii prepare the In#ome Statement for Seehat Sdn. Bhd. using a(sorption #osting method< 0* marks iv prepare the In#ome Statement for Seehat Sdn. Bhd. using marginal #osting method< 0* marks v

ad=ust the di>eren#es in net in#ome reporting that e'ist (et)een (oth in#ome statements< and 01 mark

vi

dis#uss situations that )ill result in di>erent net in#ome reporting for (oth methods. 07 marks ?Total+ $% marks@

QUESTION $ Aitra Tailors provides servi#es of making (a=u kurung at Bandar Aahaya. It uses a =o( order #osting system. The overhead a(sor(ed is (ased on dire#t la(our hour. The (udgeted manufa#turing overhead for the year $%1* is -:2"%%%. -anagement e'pe#ts a total of 17"4%% dire#t la(our hours )ill (e used. a

3is#uss )hy #ompanies use (udgeted overhead #osts rather than a#tual #osts to #ompute predetermined overhead rate. 0* marks ( Aal#ulate the predetermined overhead rate for Aitra Tailors for the month of pril $%1*. 01 marks # Crepare =ournal entries to re#ord the follo)ing transa#tions in#urred during the month of pril $%1*+ i Cur#hase dire#t material  from Syarikat !aya on #redit at -/"44/. ii $%% metres of dire#t material  )as re;uested from the store. It )as (ought for -%./% per metres. iii The alteration se#tion has re;uested for 14% metres of material BB )hi#h are the indire#t materials. The #ost of the pur#hase )as -%.7% per metre. iv 3ire#t la(our #ost in#urred for the month of pril amounted to -*%"%%%. v Aar insuran#e #ost for the month of pril is -5$%. The #ar is used for delivery purposes. vi The indire#t la(our #ost in#urred for the #urrent month is -14"%%%. vii 3epre#iation of se)ing ma#hines for the month of pril is -/"%%%. viii Throughout the month" a total of /"/%% dire#t la(our hours have (een utilised. 011 marks ?Total+ 1: marks@

QUESTION 7 D!o( order #osting method is suita(le to (e applied in a tailoring (usiness. ssess the a(ove statement.  ?Total+ * marks@