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    A211 MA2 EXERCISE 3 (Questions) - Standard Costs and Variance Analysis (Upload) 17 Dis 2021

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    Amirul Hakim Nor Azman
    This document contains 4 questions regarding standard costing and variance analysis for a management accounting course. [Question 1 and 2 ask students to answer problems from their textbook. Question 3 involves calculating 8 variances for a company that manufactures transformers. Question 4 involves calculating 4 variances for a clothing company, proposing reasons and solutions for unfavorable variances, and discussing production cost variances and decisions for an electronics company.]

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    A211 MA2 EXERCISE 3 (Questions) - Standard Costs and Variance Analysis (Upload) 17 Dis 2021

    Uploaded by

    Amirul Hakim Nor Azman
    169 views3 pages
    This document contains 4 questions regarding standard costing and variance analysis for a management accounting course. [Question 1 and 2 ask students to answer problems from their textbook. Question 3 involves calculating 8 variances for a company that manufactures transformers. Question 4 involves calculating 4 variances for a clothing company, proposing reasons and solutions for unfavorable variances, and discussing production cost variances and decisions for an electronics company.]

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    A211 MA2 EXERCISE 3 (Questions)- Standard costs and variance analysis (upload) 17 dis 2021

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    This document contains 4 questions regarding standard costing and variance analysis for a management accounting course. [Question 1 and 2 ask students to answer problems from their textbook. Question 3 involves calculating 8 variances for a company that manufactures transformers. Question 4 involves calculating 4 variances for a clothing company, proposing reasons and solutions for unfavorable variances, and discussing production cost variances and decisions for an electronics company.]

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    169 views3 pages

    A211 MA2 EXERCISE 3 (Questions) - Standard Costs and Variance Analysis (Upload) 17 Dis 2021

    Uploaded by

    Amirul Hakim Nor Azman
    This document contains 4 questions regarding standard costing and variance analysis for a management accounting course. [Question 1 and 2 ask students to answer problems from their textbook. Question 3 involves calculating 8 variances for a company that manufactures transformers. Question 4 involves calculating 4 variances for a clothing company, proposing reasons and solutions for unfavorable variances, and discussing production cost variances and decisions for an electronics company.]

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    © All Rights Reserved
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    of 3

    BKAM3023 MANAGEMENT ACCOUNTING II (A211)

    Exercise 3 (Topic 3 – Standard Costing and Variance Analysis)


    Please answer all the questions and submit on 23 December 2021 (Thursday) before
    11.55pm via UUMol.

    QUESTION 1 – Problem 10-69 (page 580 of the main reference book, MHH)

    QUESTION 2 - Problem 10-74 (page 582 of the main reference book, MHH)

    QUESTION 3 (PAST YEAR QUESTION)

    DeSintok Plant of Northern Industries Sdn Bhd (NISB) manufactures a special transformer
    part. The plant measures production level in terms of direct labor hours (DLHs) and uses a
    flexible budget system to plan and control departmental overhead costs. The following standard
    cost is developed for the special transformer.

    Price Cost
    Quantity
    (RM) (RM)
    Direct material:
    Iron 5 sheets 2.00 10.00
    Copper 3 spools 3.00 9.00
    Direct labor 4 hours 7.00 28.00
    Variable manufacturing overhead (VMOH) 4 hours 3.00 12.00
    Fixed manufacturing overhead (FMOH) 4 hours 2.00 8.00
    Total 67.00

    Both manufacturing overhead rates were based on practical capacity of 4,000 DLHs per month.
    Variable overhead costs are expected to vary with the number of DLHs actually used. During
    October 2019, DeSintok Plant produces 800 transformers and the actual costs incurred are
    summarized below:

    Direct materials:
    Iron Purchased 5,000 sheets at RM2/sheet and used 3,900 sheets
    Copper Purchased 2,200 spools at RM3.10/spool and used 2,600 spools
    Direct labor The first 2,000 hours @ RM7 and the following 1,400 hours @
    RM7.20
    VMOH RM12,000
    FMOH RM8,800

    1
    REQUIRED:

    (a) Calculate the following:


    (i) Direct labour rate variance
    (ii) Direct labour efficiency variance
    (iii) Direct material price variance
    (iv) Direct material usage variance
    (v) VMOH spending variance
    (vi) VMOH efficiency variance
    (vii) FMOH spending variance
    (viii) FMOH volume variance

    (b) Explain briefly TWO (2) reasons and whose responsibility for EACH variance in (a) i
    and (iv) above.

    QUESTION 4 (PAST YEAR QUESTION)

    A. Safiyyah Sdn Bhd (SSB) manufactures women maxi dress for Malaysian market. It is
    a single product. The standard costs of materials and labor for productions are as
    follows:

    Items Costs
    Cloth (4 meters per dress) RM4.50 per meter
    Zip and button RM0.50 per set
    Lace RM1.50 per dress
    Production labor cost RM9.00 per dress

    Standard variable overhead cost is RM4 per dress (based on direct labor hours). Fixed
    overhead is budgeted at RM16,000 per month.

    In May 2020, the following data pertain to operations are as follows:

    Materials purchased: 8,000 units costing RM39,400


    Materials used in production of 1,500 units of
    finished product: 6,200 units of materials
    Direct labor used: 1,500 hours costing RM15,000
    Variable overhead costs incurred: RM5,960
    Fixed overhead costs incurred: RM17,500

    REQUIRED:

    (a) Analyze the following variances (show all workings):

    i. Materials usage variance


    ii. Labor rate variance
    iii. Variable overhead spending variance
    iv. Fixed overhead budget variance

    (b) Propose ONE (1) reason and ONE (1) possible solution for the unfavorable
    variances in part (a) i and iv above if you are the Production Manager for SSB.
    2
    B. Excell Electronics Sdn Bhd (EESB) manufacture an electronic appliances. The
    estimated total production costs of the product is RM500,000 for production of 2000
    units of its products. In 2019, the production report show that a total of RM580,000 was
    spent to produce 3000 of its products. As the production manager for EESB,

    (a) Discuss the situation faced by EESB from the variance analysis perspective.
    Justify your answers whether EESB is in trouble or not.

    (b) Suggest TWO (2) appropriate decision for EESB to proceed with their next year
    production. Explain each suggestions.

    END OF QUESTIONS

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