SECTION A:

QUESTION 1

Explain FIVE (5) differences between Financial Accounting and Cost Accounting

QUESTION 2

Explain the following cost behavior.

# Variable cost

# Fixed Cost

# Mixed Cost

(Draw the graph and provide one example of each cost behavior.)

QUESTION 3

TWK Sdn.Bhd. is a manufacturing company. The following relates to budgeted production of 100 units of product AB:

i. Direct material costs: 100 units @ RM50 per unit. ii. Direct labour rates are:

JOB A: Assembly = RM 8 per hour

JOB B: Packing = RM 7 per hour

JOB (100 units of AB)	Labor Hours
Assembly	60
Packing	36

#1 Factory overhead to produce 100 units of product AB is RM 1,200.

#2 Direct expenses are RM850.

Required:

a) Calculate the PRIME COST of product AB.

b) Calculate the PRODUCTION COST of product AB.

C) Calculate the selling price of the job if the profit is set at 20% mark-up.

QUESTION 4

Traditional system tends to lead to cost distortion. The ABC system is more accurate to absorb overhead simply because it uses multiple cost drivers instead of only one cost driver such as direct labour hour basis.

Required:

Explain the other reasons to change to Activity Based Costing (ABC) System.