CPA › Management accounting › December 2021

CPA Management accounting – December 2021 Past Paper & Answers

Unit: Management accounting

13 Questions

Download Complete Period

Get all questions and answers for "December 2021" in a single PDF file

Join the community! 550+ students upgraded in the last 24 hours. Limited Discount Seats Available

Questions

Download CPA Management accounting December 2021 past paper with detailed answers and marking scheme. This paper is based on KASNEB examination standards and is ideal for revision and exam preparation.

Access the full paper online, download the PDF, or study offline. Each question includes step-by-step solutions to help you understand key concepts in Management accounting.

Other Management accounting Past Papers

1a
Cost accumulation
​ ​ ​ ​ ​​Blade Ltd. manufacturers a range of electronic products. The supplier of component X has informed Blade Ltd. that it will offer a quantity discount of 1% if Blade Ltd. places an order of 10,000 components or more at any time. Details of component X are as follows:

Cost per component before discount
Sh.20
Annual purchases
150,000 components
Ordering costs
Sh.360 per order
Holding costs
Sh.3 per component per annum

Required: 
(i) Economic order quantity (EOQ). 

(ii) Annual ordering cost and holding costs of inventory of component X using the economic order quantity (EOQ) computed in (a) (i) above. 

(iii) Advise the management of Blade Ltd. whether the discount should be accepted.
Want to join the discussion?

Log in to post comments and interact with tutors.

Login to Comment
1b
Cost accumulation
​ ​ ​ ​​Usenge Products L.td. manufactures and retails products A. B and C. 

The company has 120 workers who work under a group bonus scheme. The workers are categorised into three grades and are paid a bonus of the excess of time allowed over time taken. 

The bonus paid is 80% of the workers' base rate and is shared by the workers in the proportion of time spent on the job. The foltowing production data has been extracted from the company's records for the month of November 2021.

Product
Units produced
Time allowed per unit (Minutes)
A
   640
  63
B
1,280
120
C
2,400
100

Grade of worker
Number of direct workers
Basic rate per hour
Hours worked per worker
1
40
300
30
2
16
270
64
3
64
240
50

Required: 
(i) Percentage of hours saved to hours taken. 

(ii) Bonus due to the group.

(iii) Gross earnings due to the group.
Want to join the discussion?

Log in to post comments and interact with tutors.

Login to Comment
2a
Product costing methods
​ ​ ​ ​ ​ ​​(i) Using relevant examples, distinguish between a joint product" and a "by-product".

(ii) Zaidi Industries Ltd. produces two products branded A and B from the same material. The cost of material is Sh.9.50 per kg and the two products appear after Process 1.

Product A can be sold directly to the market but product B requires further processing in Process II. 

The following data relate to the month of October 2021: 


Process
Materials
Sh. 
Labour
Sh. 
Overheads
Sh. 
Total
Sh. 
I
1,440,000
210,000
150,000
1,800,000
II
-
100,000
180,000
   280,000
1,440,000
310,000
330,000
2,080,000

Product
Quantity sold (Kgs)
Closing stock (Kgs)
Sales (Sh.)
A
30,000
15,000
   525,000
B
45,000
-
1,507,500

Additional information: 
  1. There were no materials on hand at the end of the month of October 2021. 
  2. The company uses the sales value method of apportionment for joint costs. 

Required: 
Determine the total cost of Products A and B.
Want to join the discussion?

Log in to post comments and interact with tutors.

Login to Comment
2b
Product costing methods
​ ​ ​​The following data was provided by the cost accountant of Miradi Ltd. relating to marketing expenses and sales for a period of first eight months of the financial ycear ending 31 December 2021.

Month
1
2
3
4
5
6
7
8
Total marketing expenses (Sh."000")
265
302
222
240
362
295
404
400
Sales units (000)
20
24
16
18
26
22
32
30

Preliminary calculations have established the following analysis using the equation in the form ofy = a + bx

Σ(sales unit)
= 4,640 million
Σ(total marketing expenses)²
= Sh.809,598 million
Σ(total marketing expenses x sales units)
= Sh.61,250 million

Required: 
Predict the total marketing expenses for the ninth month when planned sales are 44,000 units.
Want to join the discussion?

Log in to post comments and interact with tutors.

Login to Comment
3a
Marginal and absorption costing
​ ​ ​​The Cost Accountant of ABC Ltd. has provided the following information relating to production of a single product branded "Zed":

Period 1
Period 2
Period 3
Production (Kgs)
30,000
38,000
27.000
Sales (Kgs)
30,000
27,000
38,000
Opening stock (Kgs)
-
-
11,000
Closing stock (Kgs)
-
11,000
-

Additional information:
1
The financial details for one unit of product "Zed", based on a normal activity level of 30,000 Kgs is as follows: 
1
Cost per Kg (Sh.)
Direct material
1.50
Direct labour
1.00
Production overheads (300% of labour)
3.00
Total cost
5.50
2
The selling price of product "Zed" is Sh.9 per kg
3
Administrative overheads are fixed at Sh.25,000 per period whereas one third of production overheads are fixed. 

Required: 
Prepare operating statement using: 

(i) Variable costing. 

(ii) Absorption costing.
Want to join the discussion?

Log in to post comments and interact with tutors.

Login to Comment
3b
Cost-volume profit analysis (break-even analysis)
​​ Summarise four assumptions of cost-volume profit (CVP) analysis.
Want to join the discussion?

Log in to post comments and interact with tutors.

Login to Comment
3c
Cost-volume profit analysis (break-even analysis)
​ ​ ​​Britkon Ltd. makes a single product branded "P" with a sales price of Sh.100 and a variable cost of Sh.60. Fixed costs are Sh.600,000 per annum. 

Required: 

(i) Assuming the taxation rate is 40%, determine the number of units to be sold to make a profit after tax of Sh.200,000 per annum. 

(ii) As a result of increasing costs, the variable cost is expected to rise to Sh.65 per unit and fixed costs to Sh.700,000 per annum. 

Assuming the selling price cannot be increased, determine the number ofunits required to maintain a profit of Sh.200,000 per annum. 

(Ignore inflation).
Want to join the discussion?

Log in to post comments and interact with tutors.

Login to Comment
4a
Budgetary control
​​Outline six benefits that might accrue to an organisation as a result of preparing budgets.
Want to join the discussion?

Log in to post comments and interact with tutors.

Login to Comment
4b
Budgetary control
​ ​​You are in charge of making forecasts and preparing budgets for Kondele Ltd. You have been supplied with the following cost and revenue forecast and details of payments: 

Forecast for revenue and costs for half year 2022
January
Sh."000"
February
Sh."000"
March
Sh."000"
April
Sh."000"
May
Sh."000"
June
Sh."000"
Direct material purchases
112,000
100,000
135,000
90,000
67,000
79,000
Wages
90,000
80,000
100,000
72,000
54,000
63,000

Overheads
Production
34,000
32,000
40,000
45,000
36,000
40,000
Administrative
22,000
20,000
27,000
24,000
25,000
27,000
Selling and distribution
13,000
11,000
18,000
13,000 
11,000
16,000

Sales

360,000

350,000

440,000

350,000

360,000

360,000

Additional information:
  1. Cash balance on 1 April 2022 is expected to be Sh.90 million.
  2. Period of credit allowed by suppliers averages two months.
  3. Debentures worth Sh.125 million are expected to be issued in May 2022 and the amount will be received in the same month.
  4. A new machine will be installed in March 2022 at a cost of Sh. 150 million and payment is expected in May 2022.
  5. Sales commission of 3% is payable after one month of sale.
  6. A dividend of Sh.100 million is to be paid in June 2022.
  7. There is a delay of one month in the payment of overheads andd wages.
  8. Twenty percent of the debtors pay cash, receiving a cash discount of 4% and seventy per cent of debtors pay within one month and receive 2.5% discount while the remaining debtors pay within two months without a discount.  

Required: 
A cash budget on a monthly basis for the months of April 2022 to June 2022.
Want to join the discussion?

Log in to post comments and interact with tutors.

Login to Comment
5a
The context of management accounting
​​Describe four factors that could influence a company's demand for management accounting information.
Want to join the discussion?

Log in to post comments and interact with tutors.

Login to Comment
5b
Standard costing and variance analysis
​​lighlight four purposes of standard costing.
Want to join the discussion?

Log in to post comments and interact with tutors.

Login to Comment
5c
Activity based costing
​​ Describe two advantages and two disadvantages of using activity based costing (ABC).
Want to join the discussion?

Log in to post comments and interact with tutors.

Login to Comment
5d
Costing terms and concepts
​​Explain the following terms: 

(i) Relevant cost. 

(ii) Sunk cost.
Want to join the discussion?

Log in to post comments and interact with tutors.

Login to Comment
All Periods
August 2025
April 2025
December 2024
August 2024
April 2024
December 2023
August 2023
April 2023
December 2022
August 2022
April 2022
December 2021
Pilot December 2021
September 2021
May 2021
November 2020
November 2019
May 2019
November 2018
May 2018
November 2017
May 2017
November 2016
May 2016
November 2015
Pilot September 2015
Success!

Comment posted! We'll give you feedback soon.