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Bust 311: Managerial Accounting 1 Question Paper
Bust 311: Managerial Accounting 1
Course:Bachelor Of Science In Agricultural Education And Extension
Institution: Egerton University question papers
Exam Year:2016
BUST311
EGERTON UNIVERSITY
UNIVERSITY EXAMINATIONS
REGULAR - NJORO CAMPUS
FIRST SEMESTER. 2016/2017 ACADEMIC YEAR
THIRD YEAR EXAMINATION FOR THE DEGREE OF BACHELOR OF SCIENCE IN
AGRICULTURAL EDUCATION AND EXTENSION
BUST 311: MANAGERIAL ACCOUNTING 1
STREAM: AGED TIME: 2 HRS
EXAMINATION SESSION: DEC YEAR: 2016
INSTRUCTIONS:
(i) Answer question one and any other two questions
(ii) Do not write on the question paper
SECTION A
Question One
a) Differentiate between management accounting and financial accounting (8 marks)
b) What is the importance of management accounting information in an organization(l() marks) v c) Managerial accounting's major purpose is to accumulate the cost of an organization's product that is- product costing. Why is product costing a concern for management? (6 marks)
Question Two
a) Differentiate between
i) Sunk costs and opportunity costs (2 marks)
ii) Direct costs and indirect costs in manufacturing company (2 marks)
iii) Variable and fixed costs (2 marks)
b) Mr. Osewe, a carpenter is offered a tender to make 10 office tables for a research Institute in Nakuru County. The costs to be incurred are as below;
7 Current stock of timber to be committed to the work is Kshs. 4000 vTimber to be purchased during the work Kshs. 1000
•V Plywood purchased for finishing Kshs. 2000
Labour hours worked Kshs. 72
Wages per hour Kshs. 50
Design costs Kshs. 2400
materials and utilities cost allocated to the job
Compute: Kshs. 3700
i) Direct costs (5 marks)
ii) Overhead costs (4 marks)
iii) Prime costs (4 marks)
iv) Conversion costs
Question Three (4 marks)
va) Distinguish between marginal costing and absorption costing (4 marks)
b) Differentiate between cost centres and cost accumulation (4 marks)
c) Masai Shoe Makers manufactures safari boots. Information for the financial year ended 3 1
October 2016 is given below.
Units in opening inventories 4,000
Units produced during the year 20,000
Units in closing inventories 2,000
Direct materials 1,500
Direct labour 3,000
Variable manufacturing overheads 2,000
Fixed manufacturing overheads 1 ,ooo
Total cost of opening inventories 6,500
Direct materials for the period 16,100
Direct labour for the period 22,000
Variable manufacturing overheads for the period 8,000
Fixed manufacturing overheads for the period 11,200
Total manufacturing cost for the period 42,300
Variable selling & administrative expenses for the period 3,200
Fixed selling & administrative expenses for the period 5,000
If price per unit sold is Kshs 7.5, calculate net income under the absorption costing and reconcile it with variable costing net income. (15 marks)
Question Four
a) Briefly explain the concept of variance analysis for cost accountants (3 marks)
b) Passion juice has standard direct material cost of 10 litres of passion fruit at Kshs 20 per litre. During the year, 1,000 units of passion juice were manufactured using 12,000 litres of passion juice which cost Kshs 160,000
i) Calculate material total variance (5 marks) ii) Calculate material usage variance (5 marks) iii) Calculate material price variance (5 marks) iv) Calculate total variance (5 marks)
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