AA025 PSPM COMPILATIONS

AA025: PSPM QUESTIONS SESSION 2021/2022

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COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

PSPM 2011 / 2012

QUESTION 1 (12 MARKS)

Bukit biru Sdn Bhd (BSB) uses job order costing to calculate their product cost. BSB has two
department for production, which is Cutting Department and Assemble Department. BSB
uses machine hour basis to apply overhead in Cutting Department, and uses direct labour
cost in Assemble Department. The following information are for the year ended 31 December
2011 :

Items Cutting Assemble
Department Department
Estimated manufacturing overhead RM2,000,000 RM1,540,000
Actual manufacturing overhead RM2,130,000 RM1,525,000
Estimated direct labour cost RM750,000 RM2,800,000
Actual direct labour cost RM725,000 RM2,890,000
Estimated machine hours
Actual machine hours 200,000 50,000
212,500 55,000

The following are information related to Job A3, the only unfinished job at the end of
2011:

Items Cutting Assemble
Department Department
Direct material
Direct labour RM12,250 RM3,350
Machine hours
RM13,950 RM29,300

180 75

REQUIRED: [2m]
i. Compute the predetermined overhead rate for each department. [4m]
ii. Compute ending work in process inventory cost. [4m]
iii. Compute over- or underapplied overhead for each department and the total. [2m]
iv. Prepare journal entries to record over- or underapplied overhead.

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COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

QUESTION 2 (8 MARKS)

Tulip Sdn Bhd (TSB) produces well known fish crackers and uses process costing to
determine its product cost. Direct materials are added at the beginning process, while
conversion costs are incurred continously in the production. The following information are
for March 2011:

Items RM
Beginning work in process – 40,000 units
Direct material 110,500
Conversion costs : 38% completed 22,375
Started into production unit – 190,000 units

Ending work in process – 50,000 units 430,000
Conversion costs : 55% completed 128,000
Current cost in March : 192,000

Direct material
Direct labour
Manufacturing overhead

REQUIRED: [2m]
Compute : [3m]
i. Equivalent unit for direct material and conversion costs. [1m]
ii. Equivalent cost per unit for direct material and conversion costs. [2m]
iii.Transferred-out cost.
iv. Ending work in process inventory cost.

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COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

QUESTION 3 (18 MARKS)

Lumuteks Sdn Bhd (LSB) produces and sells exclusive wooden doors. In October 2011, LSB
had produced 100 units. Ending inventory for the month is 25 units. Selling price per unit is
RM16,000. LSB had 50 units inventoried at 1st October 2011. Actual overhead cost and
estimated overhead cost is equal.

Information for October 2011 are as follows:

Items RM
Direct material 218,000
Direct labour 134,400
Variable manufacturing overhead 50,800
Fixed manufacturing overhead 51,200
Variable selling expenses:
200
Commission (per unit)
Fixed selling and administrative expenses: 16,000
24,000
Advertising 40,000
Delivery 4,800
Salaries 8,800
Depreciation
Insurance

REQUIRED:

Prepare an Income Statement for LSB for the month ended 31 October 2011 by using:

a) Absorption costing [9m]

b) Marginal costing. [9m]

END OF QUESTION 4|Page
COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

PSPM 2012 / 2013

QUESTION 1 (15 MARKS)

Pegamas Sdn Bhd (PSB) produces equipment for communication industry. Each equipment
is ordered according to customers specification. PSB uses job order costing and applied
overhead is based on machine hours. The following are estimated information related to
production for 2012.

Machine hours 47,000
Direct labour hours 12,000
Manufacturing overhead cost RM235,000

Information for three (3) jobs in January 2012 are as follows:

Direct material MD14 AR16 MF18
Direct labour RM21,200 RM47,800 RM17,500
Direct labour hours RM2,750 RM1,780
Machine hours RM890
380 550 200
1,000 2,500 500

At the end of January, job MD14 and AR16 has been done. Job MD14 has also been sold.
Actual manufacturing overhead cost for January 2012 is RM26,000.

REQUIRED :

i. Compute the predetermined overhead rate for 2012. [1m]

ii. Compute the total cost for each job in January 2012. [8m]

iii. Compute the over- or underapplied overhead for January 2012. [3m]

iv. Prepare the journal entry with explanation to record over- or underapplied overhead.

[3m]

5|Page

COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

QUESTION 2 (6 MARKS)

Cenderakasih Sdn Bhd (BCB) produces chemical product. Direct materials are added at the
beginning process. Direct labour cost and manufacturing overhead are incurred continuously
in the production. Cost and production data for July 2012 are as follows:

Opening inventory work in process : 10,000 litres
Units 25%
Completed percentage for direct labour and manufacturing overhead RM20,000
Direct material RM2,500
Direct labour RM7,500
Manufacturing overhead

Operational information for July 2012 : 200,000 litres
Started into production unit 195,000 litres
Completed units 40%
Ending inventory : Completed percentage for direct labour and
manufacturing overhead RM400,00
Direct material RM197,500
Direct labour RM592,500
Manufacturing overhead

REQUIRED : [2m]
Calculate : [4m]

i. Equivalent unit for direct material and conversion costs.
ii. Equivalent cost per unit for direct material and conversion costs.

QUESTION 3 (14 MARKS)
Rajawali Sdn Bhd (RSB) had prepared a standard cost data for its product as follow:

Direct material 15 metres @RM10
Direct labour 8 hours @ RM14 per hour
Variable manufacturing overhead 8 hours @ RM10 per hour

Actual data for cost and activities involved for January 2012 are as follows:

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COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

Purchased of direct material 40,000 metres @ RM10.60 per metre
Direct material used 37,000 metres
Direct labour 21,000 hours @ RM13.40 per hours
Actual variable manufacturing overhead RM228,000
Production unit 2,500 units

REQUIRED : [2m]
Calculate : [4m]
[4m]
a) Standard cost per unit. [4m]
b) Price variance and quantity variance for direct material.
c) Price variance and efficiency variance for direct labour.
d) Expenditure variance and efficiency variance for variable overhead.

QUESTION 4 (18 MARKS)

Walitputih Sdn Bhd (WSB) is a luxury cabinet producer. In January 2013, WSB has produce
40 units of cabinets. WSB’s ending inventory for January 2013 are 10 units. Sales price per
unit is RM40,000. WSB has 20 units of cabinet as opening inventory in 2013. Estimated
overhead cost equals to actual overhead cost.

The following information are for January 2013 :

Direct material (RM)
Direct labour 545,000
Variable manufacturing overhead 336,000
Fixed manufacturing overhead 127,000
128,000
Variable selling expense :
Commission per unit 500

Fixed selling and administrative expense : 40,000
Advertisement 60,000
Delivery 100,000
Salaries 12,000
Depreciaton 22,000
Insurance

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COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

REQUIRED :

i. Calculate cost per unit using Absorption Costing and Marginal Costing method.

[4m]

ii. Calculate ending inventory value using Absorption Costing and Marginal Costing

method. [2m]

iii. Prepare an Income Statement or January 2013 using Absorption Costing and Marginal

Costing method. [10m]

iv. Prepare a reconciliation of net profit. [2m]

END OF QUESTION

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COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

PSPM 2013/2014

QUESTION 1 (17 MARKS)

a) Berlian Sdn Bhd (BASB) is preparing an estimated overhead information for Assemble
Department and Packaging Department for February 2014:

Items Assemble Department Packaging Department
(RM) (RM)
Indirect labour 60,000 72,000
Supplies 12,000 9,000
Utilities 13,000 14,000
Repair expense 15,000 25,000

Total 100,000 120,000

Assemble Department uses machine hours basis and Packaging Department uses direct
labour hours basis to apply overhead cost in production. Machine hours and direct labour
hours are as follows:

Items Estimated Actual
Machine hours 25,000 27,000
Direct labour hours 40,000 28,000

Actual overhead cost for Assemble Department is RM 110,000 and for Packaging Department
is RM79,000.

REQUIRED:

i) Compute the predetermined overhead rate for each department. [2 m]

ii) Compute the overhead cost for each department. [2 m]

iii) Determine over- or underapplied overhead for each department. [4 m]

iv) Prepare the journal entry to record over- or underapplied overhead for answer

(iii). [2 m]

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COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

b) Ruby Sdn Bhd (RSB) is a special design jewellery producer for export. RSB uses normal
costing system. Yearly estimated overhead is RM150,000 and 24,000 machine hours
will be used. Information related to three jobs in December 2013 are as follows:

Machine hours Job RB1 Job RB2 Job RB3
Costs: 900 600 300
Opening work in process RM RM RM
Direct material 7,500 4,500
Direct labour 18,000 2,400 1,950
3,600 1,200 750
3,000

REQUIRED: [7 m]
Compute the total cost for job RB1,RB2 and RB3.

QUESTION 2 (16 MARKS)

Topaz Sdn Bhd (TSB) is using weighted average method in process costing system. The
following are Assemble department partial operational information for March 2014:

Work in process, 1 March 2014: 700
Work in process unit 80%
Direct material completed 40%
Conversion costs completed RM1,904
Direct material cost RM8,624
Conversion costs 29,000 unit
28,800 unit
Started into production unit in March
Completed unit and transferred-out RM104,044
Current cost in March 2014: RM875,266

Direct material cost 900 unit
Conversion costs 70%
Work in process 31 March 2014: 20%
Work in process unit
Direct material completed
Conversion costs completed

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COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

REQUIRED:

Prepare a production cost report for Assemble Department for March 2014 and show the

following items:

a) Physical units

b) Equivalent unit

c) Equivalent cost per unit

d) Ending work in process cost and finished goods cost [16 m]

END OF QUESTION

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COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

PSPM 2014/2015

QUESTION 1 (17 MARKS)

Jenaki Sdn Bhd (JSB) is a kitchen cabinet manufacturer that use job order costing for all

their product. The production involve two departments, which is Cutting Department and

Assemble Department. These are the estimated information for the year 2015 :

Items Cutting Assemble

Department Department

Direct labour hours 60,000 12,000

Manufacturing overhead costs RM 360,000 Rm 54,000

Direct labour costs RM 160,000 RM 90,000

JSB uses direct labour hours as basis to absorp overhead in the Cutting Department,

whereas Assemble Department uses basis of percentage on direct labour costs.

For the month of January 2015, JSB had finished all the orders. Actual manufacturing

overhead costs are as follows :

Items Cutting Assemble

Department Department

Direct labour hours 4,000 1,100

Manufacturing overhead costs RM28,000 RM4,000

Direct labour costs RM14,000 RM8,000

For the month of February 2015, JSB had received job order D24 from one of the client.

These are all the information related to the job order D24 :

Items Cutting Assemble

Department Department

Direct material costs : -

Nyatoh wood RM 1,600

Kitchen - RM 2,400

Oven - RM 3,400

Direct Labour :

Direct Labour hours 50 hours 20 hours

Wages rate per hour RM45 RM30

REQUIRED:

i) Calculate the predetermined overhead rate for each department [3m]

ii) Calculate under-applied or over-applied total overhead costs for each department

for the month of January 2015. [6m]

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COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

iii) Prepare an adjustment journal entries for each department with the costs of goods

sold for answer (ii) above. [2m]

iv) Calculate the production costs for job order D24 for the month of February 2015.

[6m]

QUESTION 2 (20 MARKS)

D’rine Chanteque Sdn Bhd (DCSB) is producing various types of women dresses. Selling
price per unit of dress is RM120. DCSB estimated the production and sales for dress is
108,000 pair for the year 2015. These are all the costs related to produce a pair of dress :

Items RM
Direct materials 24
Direct labour (RM11 per hours) 11
Variable manufacturing overhead 10
Fixed manufacturing overhead 25
Total production cost per pair 70

Additional information :
Administrative Fixed cost is RM36,000 per year and the commissions expenses is 5% on
sales.

These are production and sales information for the month of January and February 2015 :

Items January Ferbuary
Production (units) 9,000 7,000
Sales (units) 7,000 8,000

DCSB is using normal costing system.

REQUIRED:

i) Calculate the product cost per pair of dress using absorption costing method and

marginal costing method. [4m]

ii) Prepare the income statement for the month ended 28 February 2015 using method :

a) Absorption Costing [7m]

b) Marginal Costing [7m]

iii) Prepare profit reconciliation for both methods. [2m]

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COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

QUESTION 3 (16 MARKS)

Bawanika Sdn Bhd (BSB) is a manufacturer of plastic goods. These are information of
standard cost and actual production for the month of January 2015 :

Items Standard Actual
Sales and production 20,000 units 21,000 units
Sale Price RM125 per unit RM137.50 per unit
Direct materials 10 kg per [email protected] per kg 220,000 kg@RM 4.30 per kg
Direct labour 3 hours per unit@ RM 7 per hour 61,500 hours @RM7.20 per

Variable Overhead 3 hours per unit @ RM 4 per hour hour
Fixed Overhead 3 hours per unit @ RM 2 per hour RM 178,200
RM 110,000

Variable overhead and fixed overhead absorp based on direct labour hour. BSB estimated
sales and production for the month of January is 20,000.

REQUIRED : [4m]
i) Calculate variance : [4m]
[4m]
a) Price variance and Quantity variance for direct materials. [4m]
b) Rate variance and efficiency variance for direct labour.
c) Expenses variance and efficiency variance for variable overhead.
d) Budget variance and volume variance for fixed overhead.

END OF QUESTION PAPER.

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COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

PSPM 2015/2016

QUESTION 1 (16 MARKS)

a) Perniagaan Kenari (PK) is making and selling curtains according to customer order.
Here is an estimated overhead cost for Cutting Department and Completion Department
for the month of March 2016 :

Manufacturing Overhead costs Cutting Completion
Machine hours Department Department
Direct Labour hour RM600,000 RM300,000

40,000 50,000
30,000 15,000

Cutting Department uses machine hour and Completion Department uses direct labour
hour as a basis to absorp overhead cost.
In March 2016, the actual data is as follows:

Manufacturing Overhead costs Cutting Completion
Machine hours Department Department
Direct labour hours RM550,000 RM350,000

45,000 40,000
25,000 20,000

REQUIRED:

i. Calculate predetermined overhead rate for each department. [2m]

ii. Calculate total overhead cost for each department. [2m]

iii. Calculate under-applied or over-applied overhead for each department. [3m]

iv. Prepare the adjustment journal entries for under-applied or over-applied

overhead for answer (a) iii for each department by using the write-off method.

[2m]

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COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

b) Perniagaan Layangan (PL) received two job orders from a customer for the month of
March which are LB100 and LB101. In March 2016, all jobs related to job LB100 is
completed. These are all the data for the month of March 2016 :

Direct Materials LB100(RM) LB101(RM)
Direct Labour 18,000 12,000
Work In Process 1 March 2016 16,200 19,800
Work In Process 31 March 2016 5,400 1,200
- 2,400

Direct Labour Hours 2,000 hours 1,500 hours

Overhead costs are absorp to each job order using the basis of direct labour hours.
Predetermined overhead rate is RM6 per direct labour hour.

REQUIRED:

i) Calculate total job costs for LB100 and LB101. [5½ m]

ii) Calculate sales price for job LB100, if PL estimate profit to be 40% on costs.

[1½ m]

QUESTION 2 (13 MARKS)
Kaswari Enterprise (KE) is producing and selling a can food product. Here is the
information on sales and production for KE for the month of January and February 2016:

Items January February
16,000 units 12,000 units
Sales 16,000 units 16,000 units
Productions
RM RM
Sale Price per unit 160 160
Variable cost per unit :
32 32
Direct materials 32 32
Direct labour 16 16
Manufacturing Overhead 180,000 180,000
Fixed Manufacturing Overhead 96,000 96,000
Fixed sales and administration
expenses

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COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

KE is using production units as a basis to absorp fixed manufacturing overhead. Production
units estimated at 16,000 units each month.

REQUIRED:

i) Calculate product cost per unit using absorption costing method and marginal

costing method. [ 4m ]

ii) Prepare KE Income Statement for the month ended 28 February 2016 using

absorption costing method and marginal costing method. [7½ m]

iii) Reconcile the net profit gain in a) ii) using absorption costing method and marginal
costing method.
[1½ m]

QUESTION 3 (16 MARKS)

Rajawali Enterprise (RE) produces a product namely ‘YAMI’. These are all the standard cost
information and actual production information for the year 2015.

Items Standard Actual
Sales and 25,000 units 26,000 units
Productions
Direct materials 4 kg per unit @ RM3 per kg 105,000 kg @ RM2.70 per kg
Direct Labour 3 hours per unit @ RM8 per hour 76,000 hours @ RM8.30 per

Variable Overhead 3 hours per unit @ RM2 per hour hour
Fixed Overhead 3 hours per unit @ RM3 per hour RM167,200
RM190,000

Variable overhead and fixed overhead absorp based on direct labour hours. RE estimated
sales and production level at 25,000 units for the year 2015.

REQUIRED: [4m]
Calculate : [4m]
[4m]
i. Price and Quantity variance for direct materials [4m]
ii. Rate and Efficiency variance for direct labour
iii. Expenditure and Efficiency variance for variable overhead
iv. Budget and Volume variance for fixed overhead.

END OF QUESTION PAPER 17 | P a g e
COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

PSPM 2016/2017

QUESTION 1

Cybersave Sdn Bhd uses predetermined overhead rate in determining manufacturing
overhead cost. The company uses the machine hour basis for the AM Department and the
direct labor hour basis for the PM Department. In the beginning of the year, the company's
management has made a budget as follows:

Direct labor cost Department AM Department PM
Manufacturing overhead RM1,500,000 RM1,200,000
Direct labor hours RM1,820,000 RM1,000,000
Machine hours 90,000 125,000
350,000 20,000

The cost for job order PTG505 is as follows:

Direct materials cost Department AM Department PM
Direct labor cost RM12,000 RM32,000
Direct labor hours RM10,800 RM10,000
Machine hours 900 1,250
3,500 150

REQUIRED

(i) Calculate the predetermined overhead rate for each department.

[2 marks]

(ii) Calculate the total overhead cost for job order PTG505.

[2 marks]

(iii) If the job order PTG505 is 120 units, calculate the cost per unit for the job.
[4 marks]

(iv) At the end of the year, the actual data of the company's operations are as follows:

Manufacturing overhead cost Department AM Department PM
Direct labor hours RM1,300,000 RM1,200,000
Machine hours 80,000 120,000
300,000 25,000

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COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

Calculate the overapplied or underapplied manufacturing overhead for each
department and prepare a journal entry to record the adjustment of this manufacturing
overhead.

[7 marks]

QUESTION 2

(a) Production operation information of Chempaka Sdn Bhd for March is as follows:

Beginning inventory Unit
Production 500
Sales
Ending inventory 4,100
4,300
Price per unit
Variable cost per unit: 300
RM
Direct materials
Direct labor 158
Manufacturing overhead
Sales and administration 33
Fixed cost: 60
Manufacturing overhead
Sales and administration 5
9

94,300
47,300

REQUIRED:
(i) Calculate the production cost per unit by using absorption costing and

marginal costing.
.

[4 marks]

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COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

(b) Amber Sdn Bhd uses the weighted average method in process costing system. Below

are the operating data of the company's processing department for the current

month:

Beginning work in process inventory:

Units in process 700

Percentage completed:

Direct materials 80%

Conversion cost 40%

Cost of beginning work in process::

Direct materials cost RM1,904

Conversion cost RM8,624

Units started in production 29,000

Units completed and transferred out 28,800

Additional cost over the month:

Direct materials cost RM104,044

Conversion cost RM875,266

Ending work in process inventory:

Units in process 900

Percentage completed:

Direct materials 70%

Conversion cost 20%

REQUIRED:

(i) Calculate the equivalent units of the production.

[4 marks]
(ii) Calculate the cost per unit for the equivalent units of the production.

[4 marks]

(iii) Calculate the cost of ending work in process inventory.

[2 marks]

(iv) Calculate the cost of goods transferred out to the next department.
[2 marks]

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COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

QUESTION 3

Here are the direct labor standards for the production of A products:

Standard labor hours per unit 18 minutes

Standard labor rate RM15.50 per hour

The actual information for the production of A products is as follows:

Labor hours 3,800 hours

Total labor cost RM59,470

Total production 12,800 units

REQUIRED:
(i) Calculate the variance of labor price (rate).

(ii) Calculate the variance of labor quantity (efficiency). [2 markah]
[3 markah]

END OF QUESTION PAPER

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COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

PSPM 2017/2018

QUESTION 1

Perniagaan Lan Kabinet uses the job order costing system to determine its job order costs.
The information for the first month of its operation in year 2017 is as follows:

1. Purchase of raw materials worth RM99,700 on credit.

2. Direct materials and direct labor costs are as follows:

Item L01 Job number L04
Direct materials (RM) 10,330 L02 L03 10,760
Direct labor (RM) 9,750 11,200
9,280 7,320 8,440 9,000

3. For the current year, the estimated factory overhead is RM19,800 and the estimated
direct labor cost is RM24, 000. Direct labor cost is used as the basis for applying
manufacturing overhead.

4. Other costs incurred during the production process are as follows:

Items RM
Indirect materials 5,350
Indirect labor 4,720
Utilities 6,100
Maintenance 9,200
Depreciation 3,900
Tax 2,300

5. Completed jobs are L01, L03 and L04. [1 mark]
Required:
(a) Calculate the predetermined overhead rate. [6 marks]
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(b) Determine the cost for each job.

COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

(c) Prepare journal entries for the related manufacturing cost flow and adjusting entries
to record over or under applied overhead.
[10 marks]

QUESTION 2

(a) Bomerang Enterprise is a ladies’ handbags manufacturer, which are marketed all over
Malaysia. Bomerang Enterprise uses normal costing system. The following are
estimation information for factory overhead costs and annual production in 2017:

Variable factory overhead RM42,000

Fixed factory overhead RM84,000

Production volume 42,000 units

The actual data for Bomerang Enterprise throughout year 2017 are as follows:

Direct materials RM12 per unit
Direct labor RM6 per unit
Variable factory overhead RM1 per unit
Fixed factory overhead RM85,000 per year
Selling price RM30 per unit
Variable sales and administration RM2 per unit
Fixed sales and administration RM160,000 per year
Beginning inventory 4,000 units
Production volume 43,000 units
Sales 42,000 units
Ending inventory 5,000 units

Required:

(i) Calculate the product cost per unit using absorption costing method and
marginal costing method.
[5 marks]

(ii) Prepare statements of profit or loss for the year ended 2017 using absorption
costing method and marginal costing method.

[10 marks]
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COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

(iii) Reconcile net profit difference for both methods.

[2 marks]

QUESTION 3

(a) Beta Sdn Bhd produces a number of products for export including bathrobes. Beta
Sdn Bhd uses the standard costing system to assist in cost control. The following is
information relating to the standard cost and actual production for the month of
March:

Items Standard Actual
Production 2,200 units 2,100 units
Direct materials 4 meter per unit @ RM7.50 per 3.9 meter per unit @ RM8.00 per meter

Direct labor meter 0.45 hours per unit @ RM11 per hour
0.4 hour per unit @ RM10 per hour

Required:

(i) Calculate the price variance for direct materials.

[2 marks]

(ii) Calculate efficiency variance for direct labor.

[3 marks]

END OF QUESTION PAPER

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COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

PSPM 2018/2019

QUESTION 1 [ 20 marks ]

The following information is for Rajang Sdn Bhd during 2018.

Estimated machine hours 10,000 hours
Estimated direct labour hours 20,000 hours
Estimated direct labout rate RM14/hour
Estimated manufacturing overhead RM364,000
Actual machine hours 11,000 hours
Actual direct labour hours 18,000 hours
Actual direct labour rate RM15/hour
Actual Manufacturing overhead RM320,000

a. Calculate predetermined overhead rate for 2018 using the following bases:
i. Machine hours
ii. Direct labour hours
iii. Direct labour cost
[4 marks]

b. Calculate over-applied overhead or under-applied overhead using the following
bases.
i. Machine hours
ii. Direct labour hours
iii. Direct labour cost
[ 6 marks]

c. Sri Lembing Enterprise (SLE) is an exclusive garments manufacturer for special
orders. SLE applies the normal costing system. Estimated annual plant overhead is
RM60,000 based on 12,000 hours of direct labour. The jobs during February 2019 as
shown in the table below:

Direct Labour Hours Job X Job Y Job Z
Cost: 250 200 180
Beginning work in process RM RM RM
Direct Material 4,600 3,300 2,000
Direct Labour 2,200 1,700 1,400
1,500 1,200 1,000

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COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

The actual manufacturing overhead cost in February was RM3,700.

Required :

i. Calculate the total cost for job X, Y and Z.
[ 7 marks]

ii. Calculate the over-applied or under-applied overheads.
[ 2 marks]

iii. Prepare journal entries to adjust the over-applied or under-applied overheads
to the cost of goods sold.
[ 1 mark]

QUESTION 2 [ 20 marks]
The following information is related to the manufacturing process in Department A of
Kinabatangan Sdn Bhd for March 2019. KSB uses process costing system.

Items Direct Material Cost Conversion Cost
Work in Process, March 1
Cost Incurred in March RM 39,000 RM22,000
Work In Process, March 1
Unit Completed RM185,000 RM 132,000
Work In Process, March 31
35,000 units ( 50% complete)

80,000 units

30,000 units ( 40% complete)

Direct materials are fully added at the beginning of the process while the conversion cost is
uniformly applied throughout the process.
Required:

a. Calculate the physical units flow for March 2019. Show the calculations.
[ 4 marks]

b. Calculation equivalent units of productions for direct materials and conversion cost
for March 2019.
[3 ½ marks]

c. Determine production cost per unit ( round off the answers to 2 decimal points.)
[7 ½ marks]

d. Show the calculations for cost of units transferred out and ending work in process.
[ 5 marks]

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COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

QUESTION 3 [ 25 marks]
The following informations relates to Baram Sdn. Bhd (BSB) operations for 2018.

Beginning inventory 0
Production 36,000 units
Sales 30,000 units
Ending inventory
Direct Material 6,000 units
Direct Labour RM1.80 per unit
Variable manufacturing overhead RM1.50 per unit
Fixed manufacturing overhead RM1.00 per unit
Variable selling and administrative expenses
Fixed selling and administrative expenses RM12,000
Selling price RM8,200
RM3,600
RM6

BSB uses predetermined overhead rate to absorb fixed manufacturing overhead. The

predetermined overhead rate is calculated based on the following budget:

Budgeted fixed manufacturing overhead RM14,000

Production volume 35,000

Required :
a. Calculate predetermine fixed manufacturing overhead rate.
[ 1 mark]
b. Calculate product cost per unit using absorption costing and marginal costing.
[3 ½ marks]
c. Prepare Statement of Profit or Loss for the year ended 31 December 2018.
i. Absorption Costing
ii. Marginal Costing
[10½ marks]

d. The information below is related to actual and budgeted figures of Muda Sdn Bhd

(MSB) for 2018.

Budgeted Actual

Production volume 25,000 units 20,000 units

Direct material used 50,000 kg 45,000 kg

Cost of direct materials RM70,000 RM67,500

Direct labour used 100,000 hours 120,000 hours

Cost of direct labour RM200,000 RM300,000

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AA025: PSPM QUESTIONS SESSION 2021/2022

Required :
i. Calculate price variance, quantity variance and total direct materials variance.
[ 5 marks]
ii. Calculate direct labour price variance , quantity variance and total direct labour
variance.
[ 5 marks]

QUESTION 4 [ 20 marks]

Padas Sdn. Bhd ( PSB) manufactures part NK 97 which is used in one of its products.

Per Unit cost to make this part: RM
Direct Material 9.00
Direct Labour 5.00
Variable manfucaturing overhead 1.00
Depreciation of special equipment 3.00
Production Supervisor Salary 2.00
General Manufacturing overhead 8.00
Total cost per unit 28.00

The special equipment used to manufacture part NK67 has no resale value. The total cost per
unit is RM28 and PSB produces 20,000 units of NK67 each year. An outside supplier has
offered to provide the 20,000 parts at a cost of RM25 per unit.

a. Prepare the incremental/differential analysis for the decision to make or buy the part
NK97.
[18 marks]

b. Should PSB make or buy part NK97? Justify you answer.
[ 2 marks ]

END OF QUESTION PAPER

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COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

PSPM 2019/2020

QUESTION 1
Cergas Jaya Sdn. Bhd. Manufactures wheelchairs is based on customer’s specification. The
company uses job order costing to accumulate the cost of each job. In January 2020, the
company incurred manufacturing costs as follow:

Purchased of raw materials on credit. RM
Other manufacturing overhead excluding indirect materials and indirect 54,000
labour. 59,800

The company applies overhead costs based on direct labour costs. Based are the estimated
overhead costs.

Manufacturing overhead costs RM
Direct labour costs 562,500
750,000

The company received two jobs; A26 and A27. Data concerning these jobs are as follows:

Direct materials A26 A27
Direct labour RM RM
Indirect materials 27,000 21,000
Indirect labour 50,000 20,000

3,000
2,000

The company completed both jos and sold on credit RM105, 000 for job A26 and RM95, 000
for job A27.
Required:

a) Determine the predetermined overhead rate. (Round off the answer to 2 decimal
places).
[2 marks]

b) Calculate the total costs for jobs A26 and A27.
[5 marks]

c) Calculate the actual manufacturing overhead and the applied manufacturing
overhead.
[3 marks]

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AA025: PSPM QUESTIONS SESSION 2021/2022

d) Determine the over-applied or under-applied overhead.
[2 marks]

e) Prepare the journal entry for (d) above.
[1 mark]

f) Prepare journal entries to record the total purchase of raw materials direct costs
assigned, applied manufacturing overhead costs, job complete and sales for January
2020. (Omit the explaination).
[7 marks]

QUESTION 2 [20 marks]
Happy Kitty Sdn. Bhd. manufactures animal food involving two departments. The
production data of Mixing Department for the month of March 2020 is as follows:

Beginning work in process 0 unit
Unit started 25,000
units
Ending work in process (30% complete) 3,000 units

Cost in March 2020: RM60,000
Direct materials RM32,500
Direct labour RM35,450
Manufacturing overhead

Direct materials are added at the beginning of the process. Conversion cost are incurred
uniformly during the process.
Required:

a) Calculate the physical units flow for March 2020.
[3 marks]

b) Calculate equivalent units of production for direct materials and conversion costs for
March 2020.
[5 marks]

c) Determine cost per equivalent unit of direct materials and conversion costs. (Round
off the answer to 2 decimal places).
[6 marks]

d) Calculate cost of unit transferred out and cost of ending work in process.
[6 marks]

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COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

QUESTION 3 [25 marks]
Given below is the Statement of Profit or Loss based on absorpotion costing for Teras Maju
for the year ended 31st December 2019.

Sales (40,000 x RM110) RM4,400,000
(-) Cost of goods sold:
RM504,000
Beginning inventory (7,000 x RM72) RM2,592,000
Cost of goods manufactured (36,000 x RM72) RM3,096,000
Cost of goods available for sales (RM216,000)
(-) Ending inventory (3,000 x RM72) RM2,880,000
Cost of goods sold
(-) Manufacturing overhead over-applied (RM32,400)
Adjusted cost of goods sold
Gross profit (RM2,847,600)
(-) Operational expenses: RM1,552,400
Variable sales and administration expenses
(40,000 x RM11) RM440,000
Fixed sales and administration expenses
Total operational expenses RM554,500
Net profit
(RM994,500)
RM557,900

Actual manufacturing overhead cost are RM75, 600. Amount of actual and applied variable
manufacturing overhead cost are the same.
Required:

a) Calculate the following:
i. Applied fixed manufacturing overhead costs.
ii. Pre- determine fixed overhead rate per unit.
[2 marks]

b) Using the marginal costing method;
i. Calculate the product cost per unit
ii. Prepare the Statement of Profit or Loss for the month ended 31st December
2019.
[7 marks]

c) Reconcile the net profit under marginal costing and absorption costing for 2019.
[3 marks]

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AA025: PSPM QUESTIONS SESSION 2021/2022

d) Seri Wangi Sdn. Bhd. manufactures perfume. The standard costs for one bottle of
perfume are as follows:

Manufacturing cost Quantity Price Cost per
elements (RM) bottle
10 ml (RM)
Direct materials 0.5 hours 0.85 per ml 8.50
Direct labour 0.5 hours 12.00 per hour 6.00
Variable manufacturing 4.80 per hour 2.40
overhead

The information below is related to actual and budgeted amount in producing
10,000 bottles of perfume.

1. 98,000 ml of direct materials were purchased at RM98, 000.
2. All direct materials purchased were used in the production of 10,000 bottles

of perfume.
3. 4,900 direct labour hours were incurred at a total cost of RM56, 350.
4. Variable and fixed manufacturing overhead costs were RM15, 000 and

RM10,400, respectively.
5. The manufacturing overhead rate of RM4.80 per hour on a normal capacity of

5,200 direct labour hours.
6. The total budgeted fixed and variable manufacturing overhead costs were

RM10,400 and RM14,560 respectively.

Required: Calculate direct material price variance and direct material quantity variance.
i. [4 marks]

ii. Calculate direct labour rate variance and direct labour efficiency variance.
[4 marks]

iii. Calculate expenditure variance and efficiency variance for variable
manufacturing overhead cost.
[5 marks]

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COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

QUESTION 4 [20 marks]

Blooming Enterprise sells fresh flowers since 2018. Currently, the business has two
refrigerators which cost RM6,000 each and a cash register machine RM1,000 at cost. The
estimated useful life of refrigerator and cash register machine are 5 years and 3 years
respectively. The business also pays RM1,000 rentals per month.

Blooming Enterprise plans to expand the business by renting the nest door shop lot for
RM1,200 per month. The business also plans to purchase an additional refrigerator and two
cash register machines with estimated cost RM25,000. With the expansion plan, the business
anticipates that sales would increase by RM10,000 per month and variable costs increase by
40% of sales.

Required:
a) Determine five (5) relevant cost and five (5) irrelevant costs related to Blooming
Enterprise.
[10 marks]

b) Kath Kidston Sdn, Bhd. Produces pouches. Each pouch uses one fancy button. The

company is considering whether to make the buttons or to buy them. The following

cost will be incurred to make the buttons based on normal capacities of 50,000

units.

Items RM

Direct materials 3.50 per unit

Direct labour 1.75 per unit

Variable manufacturing overhead 0.95 per unit

Fixed manufacturing overhead 55,000

If the company decides to buy the buttons, the price offered by supplier is RM5.50

per unit and the production machine can be sold at RM25,000.

Required:
Provide the incremental/ differential analysis for the decision to make or buy the
button at normal capacity.

[10 marks]
END OF QUESTION PAPER

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COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

PSPM 2020/2021

QUESTION 1 [20 marks]
Meranti Enterprise produces garden ponds for landscaping. The business uses normal
costing system in determining production costs. The estimated manufacturing overhead cost
is RM60,000 based on 5,000 machine hours. Information relating to three jobs in December
2020 were as follows:

1. Direct materials costs, direct labour costs and machine hours for each job order are
as follows:

Job Order Direct Materials Direct labour Machine hours
(RM) (RM) (RM)
LC1 5,500 600 120
LC2 5,800 650 150
LC3 7,250 820 230

2. Other manufacturing costs incurred during December were as follows:

Items RM

Indirect materials 2,350

Indirect labour 1,720

Utilities 2,100

Maintenance 1,200

Depreciation 600

3. At the end of the month, only jobs LC1 and LC2 were completed.

Required:
(a) Calculate the predetermined overhead rate.

[1 mark]

(b) Calculate the applied manufacturing overhead cost for each job.

[3 marks]

(c) Determine the total costs for job LC1, LC2 and LC3.

[6 marks]

(d) Prepare the journal entries to record all transactions related to all jobs above (Omit
explanation).
[8½ marks]

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AA025: PSPM QUESTIONS SESSION 2021/2022

(e) Prepare a journal entry to adjust the over-applied or under-applied overheads to the
costs of goods sold (Omit explanation).
[1½ marks]

QUESTION 2 [20 marks]

Kayumanis Industries Sdn Bhd (KISB) produces wooden trays involving two processing
departments; Department A and Department B. Weighted-average method is used to
compute equivalent units. In Department A; all materials are added at the beginning of the
process. On 1st November 2020, Department A had work in process inventory of 2,000
wooden trays. During November, it started new production of 22,000 wooden trays. At the
end of the month, 2,500 wooden trays were 60% completed.
The costs information during November for Department A are as follows:

Beginning work in process: RM
Direct materials
Conversion costs 1,900
Current costs incurred during November 2,850
Direct materials
Conversion cost( 60% direct labour, 40 % overhead costs) 5,300
6,350

Required:
(a) Prepare a production cost report for Department A for the month ended 30th
November 2020.

[16 marks]

(b) Prepare journal entries to record current costs and transferred out costs of
Department A for November 2020.
[4 marks]

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COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

QUESTION 3 [25 marks]

(a) Mahogany Sdn. Bhd. manufactures smartphone leather cases. The company uses
normal costing system. In 2020, the company estimates to produce 100,000 units of
cases. The estimated variable and fixed manufacturing overhead costs are RM300,000
and RM120,000, respectively. Actual data for December 2020 were as follows:

Selling price RM75 per unit
Variable manufacturing cost:
RM9 per unit
Direct material RM5 per unit
Direct labor RM3 per unit
Manufacturing Overhead RM2.50 per unit
Variable selling and administrative costs
Fixed manufacturing cost for 2020 RM144,000
Fixed selling and administrative cost for 2020 RM60,000
Inventory:
Beginning 1,500 units
Ending 3,500 units
Sales 10,000 units
Production 12,000 units

Required:
Using the absorption costing method:

(i) Calculate the product cost per unit.
[3 marks]

(ii) Prepare statement of comprehensive income for the month ended 31st December
2020.
[7 marks]

Using the marginal costing method;
(iii) Calculate the product cost per unit.

[2 marks]

(iv) Prepare statement of comprehensive income for the month ended 31st December
2020.
[5 marks]

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AA025: PSPM QUESTIONS SESSION 2021/2022

(b) Al-Jati Sdn. Bhd. produces sports attires for global market. The relevant information
in 2020 regarding the manufacturing overhead cost is as follows:

Items Budgeted Actual
Variable manufacturing overhead RM240,000 RM241,500
Fixed manufacturing overhead RM150,000 RM128,800
Direct Labour hours 30,000 hours 32,200 hours
Production units 200,000 units 230,000 units

Required:
(1) Calculate expenditure variance and efficiency variance for variable manufacturing
overhead costs.
[5 marks]
(2) Calculate budget variance and volume variance for fixed manufacturing overhead
costs.
[3 marks]

QUESTION 4 [20 marks]
(a) Pine Oak Sdn. Bhd. (POSB) produces PQR components used in its products. The
annual production of PQR is 40,000 units. The cost per unit of PQR is as follows:

Items RM
Direct Material 23.40
Direct Labour 22.30
Variable Manufacturing Overhead 1.40
Fixed Manufacturing Overhead 24.60
Cost per unit 71.70

A company bids to supply PQR required by POSB for a price of RM59.20 per unit. If
POSB accepts this offer, the division of the plant used to make PQR can be used to
produce a new component SNP. Additional contribution margins of SNP are
RM352,000 per year. However, the fixed manufacturing overhead cost of RM21.90 per
unit continues to be incurred if PQR is purchased from the supplier.

Required:
Prepare relevant costing using differential analysis approach to determine whether
POSB should make or buy PQR components. Justify your answer.

[12 marks]

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COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN

AA025: PSPM QUESTIONS SESSION 2021/2022

(b) Cengal Sdn. Bhd. (CSB) produces 100,000 electric kettles per month, which is 70% of
plant capacity. Variable manufacturing costs are RM35 per unit. Fixed manufacturing
costs are RM500,000, or RM5 per unit. The electric kettles are normally sold directly
to retailers at RM55 each.

Resak Enterprise (RE), a wholesaler offers to purchase an additional 5,000 electric
kettles at RM50 per unit. Acceptance of the offer would not affect normal sales of the
product. The additional units can be manufactured without increasing plant capacity.
CSB is willing to accept this order if the additional contribution margin reaches
RM25,000 and above.

Required:
Prepare relevant costing using contribution margin analysis to determine whether
CSB should accept or reject the order from RE. Justify your answer.

[8 marks]

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COMPILED BY: MADAM SYIRLEEN ADLYNA BINTI OTHMAN