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Assignment of Cost Accounting - Bba Students

This document contains an assignment on cost accounting for BBA students. It includes 6 questions requiring calculation and journal entries related to: 1) definitions of indirect materials and labor, 2) scope of cost, 3) cost of goods manufactured and sold for two products, 4) prime cost, conversion cost and cost per unit for fertilizer production, 5) labor and factory overhead applied to incomplete jobs, 6) same as 5) and 7) journal entries for raw materials, work in process, finished goods and overhead applied under a job order costing system.

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224 views

Assignment of Cost Accounting - Bba Students

This document contains an assignment on cost accounting for BBA students. It includes 6 questions requiring calculation and journal entries related to: 1) definitions of indirect materials and labor, 2) scope of cost, 3) cost of goods manufactured and sold for two products, 4) prime cost, conversion cost and cost per unit for fertilizer production, 5) labor and factory overhead applied to incomplete jobs, 6) same as 5) and 7) journal entries for raw materials, work in process, finished goods and overhead applied under a job order costing system.

Uploaded by

Muhammad Ashhad
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ASSIGNMENT OF COST ACCOUNTING – BBA STUDENTS

Solve the following questions and submit your assignment on before or at July 13th, 2019

Accounting for Manufacturing Concerns


Q#1
Describe indirect materials and indirect labour and give an appropriate example.

Q#2
Describe the scope of cost.

Q#3
The following transactions relate to the DECENT CORP. for the month of November 2015:

Product - A Product – B
Production 10,000 units 8,000 units
Beginning Inventory 1,000 units 900 units
Ending Inventory 2,000 units 100 units

Unit Cost applicable to inventories and Production

Direct Material Rs. 4 per unit Rs. 3 per unit


Direct Labour Rs. 10 per unit Rs. 20 per unit
Factory Overhead Rs. 7 per unit Rs. 14 per unit
Actual FOH was Rs. 182,400, under or over applied factory overhead is to be adjusted in Cost
of Goods Sold.
Required
You are required to determine
i. Price Cost
ii. Conversion Cost
iii. Manufacturing Cost
iv. Cost of Goods Manufactured
v. Cost of Goods Sold (Adjusted)

Q#4
Kamaran Company produces various types of fertilizer. No beginning units in process or finished units
were on hand on January 1, 2015, 30,000 finished units were on hand on December 31, 2015 and 95,000
units were sold during the year. There were no units in work in process inventory on December 31,
2015. The material put into production cost Rs. 300,000. 75% were direct material. There was no
beginning or ending material inventory. Labour costs were Rs. 350,000, 40% was for indirect labour.
Factory overhead costs, other than indirect materials and indirect labors were the following:

Heat, light and power Rs. 115,000


Depreciation 78,000
Factory Taxes 65,000
Repairs and Maintenance 42,000
Selling Expenses were Rs. 80,000 general and administrative expenses were Rs. 50,000.

Required
You are required to compute
i. Prime Cost
ii. Conversion Cost
iii. Cost of Goods Manufactured
iv. Cost of single unit
Q#5
The work in process account in the general ledger of Multan Manufacturing Company appears as
follows:
Work in Process Account
Rs. Rs.
Material 11,000 Job Completed 21,000
Payroll 8,000
Applied FOH 6,000
There was only one job in process. The material charged to this job amounted to Rs. 1,900.

Required: Calculate labor and FOH charged to this incomplete job. The FOH is applied to production on
the basis of direct labor cost.

Q#6
The work in process account in the general ledger of Multan Manufacturing Company appears as
follows:
Work in Process Account
Rs. Rs.
Material 15,000 Job Completed 24,000
Payroll 10,000
Applied FOH 5,000
There was only one job in process. The material charged to this job amounted to Rs. 3,000.

Required: Calculate labor and FOH charged to this incomplete job. The FOH is applied to production on
direct labour cost.
JOB ORDER COSTING
Q#7
Iqbal Corporation produces special products to customers’ specifications and uses job order cost system.
The following data relates to its operations for the month of December, 2015:

1. Purchased raw material on account Rs. 60,000


2. Material issued to factory Rs. 45,000 of which Rs. 3,000 was used indirectly.
3. Labour used: direct Rs. 70,000 and indirect Rs. 4,000.
4. Factory overhead cost incurred Rs. 46,000
5. Factory overhead is applied at 95% of direct labour cost.
6. Job were completed to the extent of 90%.
7. Goods sold on account Rs. 230,000
8. Finished goods inventory at end valued at Rs. 15,000

Required
a. General journal entries for each of the above transactions also make an adjusting entry of over
or under applied FOH-Cost.
b. Prepare T-Accounts of Goods in Process account, Finished Goods Account and Raw Material
Account.

Q#8

The following accounting information have been obtained from XYZ Corporation at June 30 th, 2018

i. Material was purchased on credit from supplier for Rs. 100,000.


ii. Defective material returned to supplier worth Rs. 5,000

iii. Material and Labour used on jobs were as under:


Direct Materials Direct Labour
Job No. 1 Rs. 12,000 Rs. 17,000
Job No. 2 7,000 8,000
Job No. 3 Rs. 10,000 Rs. 9,000
Job No. 4 5,000 4,000
Job No. 5 11,000 14,000
Indirect Material/Labour 2,000 3,000

iv. Other FOH cost incurred Rs. 5,000


v. FOH is applied at 90% of Direct Labour.
vi. Depreciation on Machinery Rs. 4000
vii. Jobs no. 1, 3 and 4 were completed and Job no. 3 and 4 were sold to customer at Rs. 70,000 and
Rs. 90,000 respectively.

Required
Prepare the necessary entries to record the above transactions.

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