ALLAMA IQBAL OPEN UNIVERSITY ISLAMABAD (DEPARTMENT OF COMMERCE) COST

ALLAMA IQBAL OPEN UNIVERSITY (EARLY CHILDHOOD EDUCATION AND ELEMENTARY
ALLAMA IQBAL OPEN UNIVERSITY ISLAMABAD (DEPARTMENT OF COMMERCE) ADVANCED
ALLAMA IQBAL OPEN UNIVERSITY ISLAMABAD (DEPARTMENT OF COMMERCE) COST

ALLAMA IQBAL OPEN UNIVERSITY ISLAMABAD (DEPARTMENT OF COMMERCE) FINANCIAL
ALLAMA IQBAL OPEN UNIVERSITY ISLAMABAD (DEPARTMENT OF COMMERCE) FINANCIAL
ALLAMA IQBAL OPEN UNIVERSITY ISLAMABAD (DEPARTMENT OF COMMERCE) FUNDAMENTALS


ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD

(Department of Commerce)




COST ACCOUNTING (5410)



CHECKLIST



SEMESTER: AUTUMN, 2021




This packet comprises the following material:


  1. Text Book (One)

  2. Assignment No. 1, 2

  3. 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)


[ALLAMA IQBAL OPEN UNIVERSITY ISLAMABAD (DEPARTMENT OF COMMERCE) COST

WARNING

  1. 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.

  2. 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


Please read the following instructions for writing your assignments. (AD, BS, BEd, MA/MSc, MEd, MPhil and PhD)

  1. All questions are compulsory and carry equal marks but within a question, the marks are distributed according to its requirements.

  2. Read the question carefully and then answer it according to the requirements of the question.

  3. Hand written scanned assignments are not acceptable.

  4. Upload your typed (in Word or PDF format) assignments on or before the due date.

  5. Late assignments can’t be uploaded at LMS.

  6. Your own analysis and synthesis will be appreciated.

  7. 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:

  1. Prepare a schedule of the cost of goods sold for March.

  2. Prepare the March cost of goods manufactured schedule.

  3. What was the amount of prime cost incurred in March?

  4. 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

  1. Prepare a statement of overhead cost allocation.

  2. 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.


4



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