PAPER COST ACCOUNTING

HI-AIMS COLLEGE OF COMMERCE AND MANAGEMENT SARGODHASend Up Exam 2014, B.Com Part-II

Paper: Cost AccountingMax. Marks: 100Times Allowed: 3 HoursPass Marks: 40

NOTE: Attempt any five questions of the following. All questions carry equal marks.

Q1During the month of April 2009 following transactions took place.(a)Material purchased, received and recordedRs.250,000(b)Material requisitioned on Job 101, 102, 103 220,000(c)Indirect material requisitioned 12,000(d)Material returned to supplier 4,000(e)excess material returned from the factory to storeroom 10,000( This return is applicable to job 102)(f) Payments of wages and salaries were made based on the following information:Time tickets on job 101,102,102 (25,000 hrs)Rs 200,000Clock cards and time tickets for all other indirect labour 60,000Sales salaries and commission 40,000Office and general administration payroll 20,000Total 320,000Employees provident fund contribution: 10% of total wages, income tax withheld Rs 8,000(g) The company contributes 10% as its contributions of provident fund.(h) Factory overhead control account in voucher register was debited for Rs 160,000. Month end adjusting entries charged for depreciation Rs 25,000 and for insurance Rs 10,000.(i) Factory overhead is applied at the rate of 120% of direct labour cost.(j) Goods costing Rs.105,000 were completed. (k) Goods costing Rs.100,000 were sold for Rs. 180,000 (Rs 80,000 for cash)

You are required to pass journal entries in the factory office books and general office books.

Q.2A company uses process costing in its two departments. Material are added at the end of the process after quality control inspection. No abnormal spoilage occurred during the month.During October 2,500 units were received from department 1 at a cost of Rs.50,000. Cost incurred by department 2 during October were:MaterialsRs.8,000Conversion costRs 36,000A total of 2,000 units were transferred to finished goods inventory. The 300 units still in process at the end of October were 2/3rd complete as to conversion cost.REQUIRED:Cost of production report for October of Department 2

Q.3Following data have been taken from the records of Alpha Corporation:Jan.1Dec.31

Rs.Rs.

Inventories:Finished Goods48600?

Work in Process8150042350

Materials3420049300

Other Informations:Depreciation on factory equipment21350

Interest earned6300

Raw materials purchased364000

Direct Labor162500

Indirect Labor83400

Freight in8600

Factory overhead47900

Purchase Discount5200

Finished goods inventory on 1st January 300 units and on 31st December 420 units (all from current years production). Sales during the year, 3880 units at Rs. 220 per unit..Required:1. Unit cost of finished goods inventory on 31st December.2. Total cost of finished goods inventory on 31st December.3. Cost of Goods sold.4. Gross profit--------total and per unit.

Q.4The average daily requirement of 6" diameter dish-shaped grinding wheel is 3 pieces. Time required to score delivery from the usual supplier is 2 weeks. From the records of Novelty Tool Workers, it is found that maximum requirement of the wheel in any month of 4 weeks does not exceed 100 pieces and minimum requirement during any such period is not likely to fall below 50 pieces.You are asked to fix minimum and maximum limits and also the ordering level. Assume the economic order quantity to be 5 dozen. If 2 days are sufficient to receive emergency supply, fix also the danger level.

Q.5.Factory overhead burden rate of Kings Chemical Industries is Rs.2.25 per hour. Budgeted overhead at two activity levels is as under:Activity LevelBudgeted Factory overhead15,000 hoursRs.40,00035,000hoursRs.60,000Actual factory overhead for the period was Rs.49,800 and actual volume was 25,000 hours. Required: (i)Variable overhead burden rate.(ii)Budgeted fixed overhead.(iii)Budgeted volume at which the burden rate is computed.(iv)Applied overhead.(v)Under or over applied overhead.(vi)Volume variance.(vii)Spending variance.Q.6Workers paid under the following scheme of differential piece rates:Upto 100 pieces per dayRs.2.25 per piece101______140 pieces per dayRs.2.85 per piece141______ 180 pieces per dayRs.3.45 per piece181& above pieces per dayRs.4.50 per pieceOutput of workers during a day is as follows:Names ABCDEF

Pieces produced98120135145182200

Required: -Calculate gross wages of the day.

Q.7What is meant by the term materials? Explain different classifications of materials by giving suitable examples.

Q.8.Write short answer of the following i)Cost ii) Semi Variable Cost iii)Job order costiv)Conversion Costv)Vouchervi)Abnormal Lossvii)Equivalent production viii)Average Cost Methodix)Process Costing x)Predetermined Factory overhead