B.Com II Cost Accounting 2005 (Private)
B.Com Cost Accounting
Instruction: Attempt FIVE questions.
Q.1. (a) Show the components of total cost in relation to the selling price of a product, in form of a table. (15)
Q.1. (b) Why cost accounting is needed? (05)
Q.2. The following information has been taken from the accounting records of LATIF MANUFACTURING COMPANY: (20)
Inventories (Jan. 01, 2004)
Raw Material ……………. Rs. 27,300
Goods-in-Process ……… Rs. 16,200
Finishes goods …………. Rs. 24,100
Inventories (Mar. 31, 2004)
Items ……… Raw Material …… Goods-in-Process ……. Finished Goods
Material ………. 29,050 …………….. 6,450 …………………. 21,750
Labour ………………………………… 2,100 …………………. 13,500
Overhead ……………………………….. ? ……………………. 10,800
TOTAL ……….. 29,050 ………………. ? ……………………… 46,050
Data for the three months ended on March 31, 2004
Cost of Good Manufactured ………………………. Rs. 4,06,440
Factory Overhead ………………………………….. Rs. 89,200
The company also paid transportation costs on materials purchased of Rs. 13,850 it received credit of Rs. 8,150 for materials returned to suppliers.
Required:
On the basis of the above information and the missing data, which can be derived from it, prepare a statement of cost of good manufactured for the three months ended on March 31, 2004.
Q.3. Factory Ledger and General Ledger
NOTE: Not Included in the New Course
Q.4. The following data relate to Dada Bhai manufacturing Company for its operations for April 2004. (20)
i. Purchase of Raw Material on account for Rs. 32,500.
ii. Raw Material account shows a debit balance of Rs. 10,000 on April 30, 2004.
iii. Direct Labour cost incurred Rs. 50,000.
iv. Factory overhead incurred Rs. 40,000.
v. The job were completed and shipped to customers at a billed price of Rs. 1,50,000.
vi. The factory overhead is applied on the basis of Direct Labour Cost.
vii. Goods-in-process on April 30, 2004 were as
Raw Material ……………………… Rs. 2,950
Direct Labour Cost ………………. Rs. 2,250
Required:
i. Give the necessary journal entries for the above transactions.
ii. Compute the cost of goods in process on April 30, 2004.
iii. Prepare a condensed income statement.
Q.5. Material Inventory System
NOTE: Not Included in the New Course
Q.6. Annual estimate factory overhead of a company for an expected volume of 1,80,000 pounds of a product was as follows:
Fixed Overhead ………………………….. Rs. 36,000
Variable Overhead ………………………. Rs. 1,08,000
Output was 10,000 pounds in June and actual overhead expenses were Rs. 7,700.
Required:
i. The overhead rate per unit
ii. Spending Variance
iii. Idle Capacity Variance
Q.7. Departmentalization of Overhead
NOTE: Not Included in the New Course
Q.8. A manufacturing concern produced in product in three processes, the information of which is as under
……………………………………….. Process I .. Process II … Process III
Transferred to next process ………… 2/3 ………. 60% ………… —-
Transferred to warehouse for sale …. 1/3 ………. 40% ………… 100%
In each process 4% of the total weight put in is lost and 6% is scrap, which from Process I realized Rs. 3 per Lb. from Process II Rs. 5 per Lb. and from Process III Rs. 6 per Lb.
The following particular rates are applied:
Raw Material used:
Process I ……. 1400 Lbs at Rs. 10/= per Lb
Process II …… 160 Lbs at Rs. 16/= per Lb
Process III ….. 1260 Lbs at Rs. 7/= per Lb
Manufacturing Wages and Expenses:
Process I …….. Rs. 5,152
Process II ……. Rs. 3,140
Process III …… Rs. 2,895
Required: Prepare Process Accounts showing the Cost per Lb.
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