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Question of Material Control and Labour

This document contains 12 questions related to cost accounting concepts like material control, labor costing, economic order quantity calculations, inventory valuation methods, and selective inventory control. The questions cover topics like calculating inventory values using FIFO and weighted average, computing reorder levels, minimum levels and EOQ for materials.

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Kanan Gawlani
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976 views3 pages

Question of Material Control and Labour

This document contains 12 questions related to cost accounting concepts like material control, labor costing, economic order quantity calculations, inventory valuation methods, and selective inventory control. The questions cover topics like calculating inventory values using FIFO and weighted average, computing reorder levels, minimum levels and EOQ for materials.

Uploaded by

Kanan Gawlani
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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B.Com.

I Sem
COST ACCOUNTING
UNIT III & IV
MATERIAL CONTROL and LABOUR
BY Dr. (CA) ANKITA JAIN

Q. 1 Calculate value of material issued and closing stock as per FIFO and Weighted Average
method
Opening Stock 100 units @ Rs. 5 per unit
Purchases Issue
05/04 300 unit @ 6 06/04 250 units
08/04 500 units @ 5 10/04 400 units
12/04 600 units @ 8 14/04 500 units

Q.2 The following is the record of receipts of certain materials during the month of January 2019:

Jan. 2 Received 500 Units @ Rs.20 per unit


Jan. 3 Received 400 Units @ Rs. 21 per unit
Jan. 15 Received 300 Units @ Rs. 19 per unit
Jan. 28 Received 400 Units @ Rs. 20 per unit
.
The physical inventory taken on 31st January, 2019 shows that there are 600 units in hand.
Compute the inventory value on 31st January, 2019 by FIFO, LIFO and weighted average method

Q.3 The following details are available in respect of a firm :


1. Inventory requirement per year is 6000 units
2. Cost per unit (other than order cost and carrying cost) is Rs. 5 per unit
3. Carrying cost per item for 1 year is Re. 1.
4. Cost of placing each order Rs. 60.
5. Alternative order size are 6000, 3000,2000,1000, 600 and 200.
Calculate EOQ.

Q. 4 Calculate Economic Order Quantity from the following information. Also state the number of
orders to be placed in a year.

Consumption of materials per annum 10,000 kg.


Order placing cost per order Rs. 50
Cost per kg. of raw materials Rs. 2
Storage costs 8% of cost per unit

Q. 5 ComputeE.O.Q. and the total variable cost for the following:

Annual Demand = 5,000 units


Unit price = Rs. 20.00
Order cost =Rs. 16.00
Storage rate = 2% per annum
Interest rate = 12% per annum
Obsolescence rate = 6% per annum

1
B.Com. I Sem
COST ACCOUNTING
UNIT III & IV
MATERIAL CONTROL and LABOUR
BY Dr. (CA) ANKITA JAIN

Q. 6 The purchase department of an organisation has received an offer of quantity discount on its order
of material as under :

Price per ton


—1400 less than 500
—1380 500 – less than 1000
—1360 1000 – less than 2000
—1340 2000– less than 30000
—1320 3000 and above
The annual requirement of material is 5000 ton. The delievery cost per order is Rs. 1200 and annual stock
holding cost is estimated at 20% of average inventory. Calculate EOQ if following purchase order may be
placed – 400, 500, 1000,2000, 3000.

Q. 7 Two components, A and B are used as follows:


Normal usage 50 per week each
Maximum usage 75 per week each
Minimum usage 25 per week each
Re-order quantity A: 300; B: 500
Re-order period A: 4 to 6 weeks
B: 2 to 4 weeks
Calculate for each component (a) Re-ordering level, (b) Minimum level, (c) Maximum level, (d) Average
stock level.

Q. 8 Following information of a Company is given:


Cost of placing a purchase order is Rs.20
Number of units to be purchased during the year is 5,000
Purchase price per unit inclusive of transportation cost is Rs.50
Annual cost of storage per units is Rs.5.
Details of lead time : Average- 10 days, Maximum- 15 days, Minimum- 5 days.
For emergency purchases- 4 days.
Average consumption : 15 units per day, Maximum consumption : 20 units per day.
Calculate:
(i) Re-ordering level (ii) Maximum level (iii) Minimum level (iv) Danger level.

Q. 9 From the following details, Draw a plan of ABC selective control

Item Units Unit cost


1 6,000 100
2 10,000 65
3 5,000 50
4 25000 2
5 4,000 25
6 15,000 10
7 25,000 6
8 10,000 5

2
B.Com. I Sem
COST ACCOUNTING
UNIT III & IV
MATERIAL CONTROL and LABOUR
BY Dr. (CA) ANKITA JAIN

Q. 10 From the following data for the year ended 31st December, 20X9, Calculate the inventory
turnover ratio of the two items and put forward your comments on them.

Material A Material B
Opening stock 1.1.20X9 10,000 9,000
Purchase during the year 52,000 27,000
Closing stock 31.12.20X9 6,000 11,000

Q.11 ‘X’ an employee of ABC Co. gets the following emoluments and benefits:

Basic pay ` 10,000 p.m.


Dearness allowance ` 2,000 p.m.
Bonus 20% of salary and D.A.
Other allowances ` 2,500 p.m.
Employer’s contribution to P.F. 10% of salary and D.A.
‘X’ works for 2,400 hours per annum, out of which 400 hours are non-productive and treated as
normal idle time. You are required to COMPUTE the effective hourly cost of employee ‘X’.

Q.12 In a factory working six days in a week and eight hours each day, a worker is paid at the rate of
Rs. 100 per day basic plus D.A. @ 120% of basic. He is allowed to take 30 minutes off during
his hours shift for meals-break and a 10 minutes recess for rest. During a week, his card showed
that his time was chargeable to:

Job X 15 hrs.
Job Y 12 hrs.
Job Z 13 hrs.
The time not booked was wasted while waiting for a job. In Cost Accounting, State how would
you allocate the wag es of the workers for the week?

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