ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD
(Department of Commerce)
COST ACCOUNTING (5410)
CHECKLIST
SEMESTER: AUTUMN, 2021
This packet comprises the following material:
Text Book (One)
Assignment No. 1, 2
Assignment Forms ( 2 sets )
In this packet, if you find anything missing out of the above mentioned material, please contact at the address given below:
The Mailing Officer
Allama Iqbal Open University
H-8, Islamabad
Ph: 051-9057611-12
Prof. Dr. Syed Muhammad Amir Shah
(Course Coordinator)
ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD
(Department of Commerce)
[
WARNING
PLAGIARISM OR HIRING OF GHOST WRITER(S) FOR SOLVING THE ASSIGNMENT(S) WILL DEBAR THE STUDENT FROM AWARD OF DEGREE/CERTIFICATE, IF FOUND AT ANY STAGE.
SUBMITTING ASSIGNMENTS BORROWED OR STOLEN FROM OTHER(S) AS ONE’S OWN WILL BE PENALIZED AS DEFINED IN “AIOU PLAGIARISM POLICY”.
Course: Cost Accounting (5410) Semester: Autumn, 2021
Level: ADC/ADB/BS Account & Finance
Read the question carefully and then answer it according to the requirements of the question.
Hand written scanned assignments are not acceptable.
Upload your typed (in Word or PDF format) assignments on or before the due date.
Late assignments can’t be uploaded at LMS.
Your own analysis and synthesis will be appreciated.
Avoid irrelevant discussion/information and reproducing from books, study guide or allied material
Note: You are required to solve all questions if you are unable to understand any question of assignment, do seek help from your concerned tutor. But keep in mind that tutors are not supposed to solve the assignment questions for you.
Total Marks: 100 Pass Marks: 50
ASSIGNMENT No. 1
Units 1–4
Q.1 Define Cost Accounting? Explain different methods and techniques of Cost Accounting. (20)
Q.2 The cost of goods sold in March 2010 for Alvi Manufacturers was Rs. 2,644,100. March 31 Work in Process Inventory was 25 percent of the March 1 Work in Process Inventory. Overhead was 225 percent of direct labor cost. During March, Rs. 1,182,000 of direct material was purchased. Other March information follows: (20)
Inventories |
March 1 |
March 31 |
Direct Material |
Rs. 30,000 |
Rs. 42,000 |
Work in Process |
90,000 |
? |
Finished Goods |
125,000 |
18,400 |
Required:
Prepare a schedule of the cost of goods sold for March.
Prepare the March cost of goods manufactured schedule.
What was the amount of prime cost incurred in March?
What was the amount of conversion cost incurred in March?
Q.3 Bravo machines works collects its cost related data by the job order cost accumulation procedure. For a specific job No. 850, the following data is available. (20)
Date |
Material Cost Rs. |
Labour Cost |
10 January |
1500 |
190 hrs@ Rs. 6.2/hr. |
16 January |
962 |
150 hrs@ Rs. 7.30/hr |
22 January |
980 |
|
Factory cost is applied at the rate of Rs. 4.50 per labour hour.
Required: 1) Enter the cost information on a job order cost sheet.
2) Compute the sales price of the job No. 850 assuming that markup rate is 40% of cost.
Q.4 What is the primary objective of preparation of Job Order Cost Sheet for every job being undertaken in the organization? (20)
Q.5 The Friends Company uses process costing system. The department B received 14,000 units at the cost of Rs. 280,000. The department B costs were Rs. 24,000 for direct labour and Rs. 89,250 for factory overheads. Normal spoilage is 5% of good output, inspection and identification of spoilage takes place at the 90% stage of completion. A total of 8,000 units were completed and transferred to Department C for further processing. At the end of the month 5,000 units were still in process, estimated to be 60% complete as to the conversion cost. (20)
Required: Prepare a cost of production report for department B.
Total Marks: 100 Pass Marks: 50
ASSIGNMENT No. 2
(Units 5-9)
Q.1 What do you understand by the term Direct Material and Indirect Material? How it is charged to the manufacturing cost? (20)
Q.2 In some situations the additional material and labour costs incurred on defective works is treated as factory overhead cost. In some other cases the cost of perfecting the defective work is charged directly to the job. Explain the appropriate application of each accounting treatment. (20)
Q.3 The following summary of wages and salaries of the employees has been prepared by the payroll department of Decent Furniture Manufacturing Company for the month of February 2014:- (20)
Particulars |
Basic Pay (Rs.) |
Dearness Allowance |
Conveyance Allowance |
Gross amount |
Income Tax |
Provident Fund |
Net Payable |
Direct Labour |
540,000 |
27,000 |
16,200 |
583,200 |
46,656 |
54,000 |
482,544 |
Indirect Labour |
360,000 |
18,000 |
10,800 |
388,800 |
23,328 |
36,000 |
329,472
|
Admin. Dept |
280,000 |
14,000 |
8,400 |
302,400 |
15,120 |
28,000 |
259,280 |
Sales Dept |
220,000 |
11,000 |
6,600 |
237,600 |
9,504 |
22,000 |
206,096
|
Total Rs. |
1,400,000 |
70,000 |
42,000 |
1,512,000 |
94,608 |
140,000 |
1,277,392 |
Required: Prepare Journal entries to record the accrual of payroll and payment in the financial Accounts. The accrual and payment is made at month end. Also prepare necessary Journal entries in the Cost Accounting record for the month.
Q.4 Blue Incorporation applied manufacturing expenses to production by means of a predetermined rate based upon normal capacity production. (20)
Manufacturing expenses at Normal Capacity of 400,000 Direct Labour are estimated to be Rs. 340,000; of which Rs. 120,000 are Fixed and Rs. 220,000 are variable expenses. Actual Direct Labour Hours for the year are 368,000 and the total actual manufacturing expenses amounted to Rs. 305,000.
Required: Calculate (i) Total over or under applied Factory overheads (ii) Budgeted and Capacity Variance.
Q.5 Wilson Pharmaceutical Company uses the direct method of allocating servicing departments overhead costs to the producing departments. The following data is available concerning the activities:- (20)
Particulars |
Producing Department |
Servicing Department |
||
Mixing |
Finishing |
Procurement |
Factory Admin |
|
Budget FOH cost |
Rs. 410,000 |
Rs. 304,000 |
Rs. 100,000 |
Rs. 50,000 |
Number of employees |
90 |
210 |
20 |
28 |
Machine Hours |
64,000 |
16,000 |
-- |
-- |
Direct Labour Hours |
35,000 |
100,000 |
-- |
-- |
The costs of Procurement Department are allocated on the basis of number of employees while the costs of Factory Administration are prorated on the basis of machine hours.
REQUIRED
Prepare a statement of overhead cost allocation.
Calculate predetermined overhead rates for each of the producing departments on the basis of machine hours for the mixing department while direct labour hours for the finishing department.
ALLAMA IQBAL OPEN UNIVERSITY ISLAMABAD (DEPARTMENT OF COMMERCE) PRINCIPLES
ALLAMA IQBAL OPEN UNIVERSITY ISLAMABAD (DEPARTMENT OF COMPUTER SCIENCE)
ALLAMA IQBAL OPEN UNIVERSITY ISLAMABAD (DEPARTMENT OF ENGLISH LANGUAGE
Tags: (department of, islamabad (department, (department, iqbal, allama, islamabad, commerce), university