ACC313 : MANAGEMENT ACCOUNTING (2014)

NATIONAL OPEN UNIVERSITY OF NIGERIA

14/16 AHMADU BELLO WAY, VICTORIA ISLAND, LAGOS

SCHOOL OF MANAGEMENT SCIENCES

MARCH/APRIL 2014 EXAMINATION

Course Code: ACC 313 Credit Unit: 3

Course Title: MANAGEMENT ACCOUNTING

Time Allowed: 2 1/2Hrs

Instructions: 1. Attempt question Number one (1) and any other two (2).

2. Question number 1 is compulsory and carries 30 marks, while the other

questions carry equal marks each

3. Present all your points in coherent and orderly manner

1. The following information has been gathered with regard to material X of BODE Ltd.

Units

Normal month usage 24,600

Maximum anticipated monthly usage 27,000

Minimum anticipated monthly usage 6,400

Delivery period from suppliers:

Maximum 3 months

Normal 2 months

Minimum 1.5 months

Re-order quantity (EOQ) 10,000 units

Required:

(a) Calculate:

(i) Re-order level

(ii) Minimum stock level

(iii) Maximum stock level. (10marks)

(b) Comment on five factors, which may have to be taken into accounts in setting the

maximum stock level (5marks)

(c) The company required 80,000 units per year which will be used at a

constant rate. The purchasing manager is considering what size to be used.

The holding cost is 20% of the purchase price. The cost per order is N2,500

while the purchase price is N24 per unit. Calculate Economic Order Quantity,

using the formula. (10marks)

2.(a) Define Management Accounting as defined by CIMA (5marks)

(b) Identify and describe five Management Accounting Techniques. (10marks)

3. Peju Limited had an opening stock value of 300 units valued at N8.80 each on 1 April, 2005. The following receipts and issues were recorded during the month

10 April Receipt 1000 units N8.60 per unit

23 April Receipt 600 units N9.00 per unit

29 April Issue 1700 units.

Using the LIFO method, what was the total value of the issue on 29 April 2005?

(15marks)

4.(a) What is Decision Making (5marks)

(b) Mention the stages of decision making process (10marks)

5. Mention ten ways in which management accounting differs from financial accounting. (15 marks)

6.(a) What is differential cost? (3marks)

(b) What are the formulae for: break-even point (units); break-even point (sales value)? (8marks)

(c) Define relevant cost. (3marks)

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