Cost Solutions Past Papers

8/14/2019 Cost Solutions Past Papers

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Paper: Spring 2007

Question: 02

Req: 01:- Total Manufacturing Costs

= Direct Material + Direct Labour + Factory Overheads= {Open. Inv. Mat. + Purchased Mat. - Cl. Inv. Mat.} + Direct Labour + FOH= {15000 + 46500 - 19200} + {(6125*7.80)+(9875*8.40)} + {(6125*5.00)+(9875*4.20)}= 42300 + (47775+82950) + (30625+41475)= 42300 + 130725 + 72100= 245125

Req: 02:- Cost of Goods Manufactured

= Total Manufacturing Cost + Work in Process.Open. Inv. - Work in Process. Cl. Inv.= 245125 + 17300 - 19425= 243000

Req: 03:- Cost of Goods Sold

= Cost of Goods Manufactured + Finished Goods.Open. Inv. - Finished Goods.Cl. Inv.= 243000+11300 - 9400= 244900

Paper: Spring 2007

Question: 03

Req:1 :- The Amount of Total Material Available for sale

= Opening Inv. + Purchases= (200 * 2) + (220 * 2.4)= 400 + 528= 928


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Note: For Calculating this req, you should calculate purchases first.

Purchased Units = Sale + Closing Inv. - Opening Inv.= 180 + 240 - 200= 220 units

Req:2:- Income Statement showing after Tax earning

LIFO FIFO

Sale 648 648Less: Cost of Goods SoldOpening Inv. 400 400Add: Purchases 528 528

928 928Less: Closing Inv. 488 440 568 360

Net Income before Tax 208 288Less: Income Tax @ 50% 104 144

Net Income after Tax 104 144

Req:3:- Cost assigned to ending inventory

LIFO FIFO

Closing Inventory: 488 568

Req:4:- Comparison of the result of both the companies

Among these two companies, the company which uses the LIFO Method itsincurred cost is higher than theother company and its Gross proit or Net Profit is less then other companyand this company also get thebenefit of Tax bracket, because it will pay tax less than other company.


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Paper: Spring 2007

Question: 04

Jabir CompanyIncome Statement

For the yead ending 31st December, 19A

Sale Rs. 810000

Less: Cost of Goods Sold: (W-1) 405000

Gross Profit 405000Less: Operating Expenses 124000

Net Operating Income Rs. 281000

W-1

Jabir Company

Cost of Goods SoldFor the yead ending 31st December, 19A

Direct Material 175000Direct Labour 125000Factory Overheads 150000Cost of Goods available for sal 450000

Less: Finished Goods-Closing Stock 45000

Cost of Goods Sold 405000

Paper: Spring 2007

Question: 05


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Nadeem FurnitureCash Budget

for the month of Sep & Oct

Particulars Sep OctRs. 13000 Rs. -8750

Opening BalanceReceitps:

Cash Sales 40000 60000

Received from Debtors W-1 96750 136750 90500 150500

149750 141750Payments:

Cash Purchases 20000 20000Payment to Creditors W-2 92000 80000

Cash Operating Expenses 46500 158500 10000 110000

Closing Balance Rs. -8750 Rs. 31750

W-1 Account Receivables Receipts

Sep OctReceipts for the month of Sep 38750 31000

Oct 47500July 10000Aug 48000 12000

Total Received from Debtors 96750 90500

W-2 Accounts Paybles

Sep Oct Sep OctCash Payments 92000 80000 Opening Bal. 10000 12000Discount 6000 3000 Purchases 100000 80000Closing Bal. 12000 9000

110000 92000 110000 92000


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Paper: Spring 2007

Question: 06

Applied RateRs. 3 per machinehour

Estimated Variable Overheads

Rs.

200000

Actual Production210000 machinehours

Actual Overheads Rs. 6310000

Estimated Fixed OverheadsRs.400000

Total Estimated OverheadsRs.600000

Spending Variance/Budgeted Variance / Expenditure Variance

Estimated Overheads (At Actual) W-1 Rs. 6100000

Actual Overheads 6310000

Unfavourable Variance Rs. 210000

W-1 Estimated Overheads (At Actual)

= Fixed Overheads + Variable Overheads at actual= 400000 + (200000 * 210000/200000)= 400000 + 210000= 610000

Idle Capacity / Capacity / Volume Variance


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Applied Overheads W-2 Rs. 630000

Estimated Overheads (At Actual) W-1 610000

Favourable Variance Rs. 20000

W-2 Applied Overheads

= Actual Production * Applied Rate= 210000 * 3= 630000

Paper: Spring 2007

Question: 07

Req: 1 :- Journal Entries for Specific Order

1- To record the initial productionDebit Credit

Work in Process 8375Material 4000Payroll 1750Factory Overheads Applied 2625

2- To record reworking cost

Work in Process 71.25Material 15Payroll 22.5Factory Overheads Applied 33.75

3-To record completion


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Finished Goods 8446.25Work in Process 8446.25

Req: 2:- Journal Entries for Customer

1- To record the initial productionDebit Credit

Work in Process 8550Material 4000Payroll 1750Factory Overheads Applied 2800

2- To record reworking cost

Factory Overhead 73.5Material 15

Payroll 22.5Factory Overheads Applied 36

3-To record completion

Finished Goods 8623.5Work in Process 8623.5

Paper: Spring 2006

Question: 04


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_ _ _ _Assembly Department

Cost of Production ReportFor the month of February

QUANTITY SCHEDULE:Units Received In 60000

Units Completed & Transferred out 50000Units Still in Process 9000

Units Lost in Process (Abnormal Loss) 1000 60000

COST CHARGED TO DEPTT.:- T.C U.CRs. Rs.

Cost from Pre. Deptt. 212400 3.54Cost added by this Deptt.

Direct Material 41650 0.70Direct Labour 101700 1.80Factory Overheads 56500 1.00

Total Cost added by this deptt. 199850 3.50Total Cost to be accounted for 412250 7.04

COST ACCOUNTED FOR AS FOLLOWS:- Rs.Cost Transferred out 352000Work in Process- Closing Inventory:-

Cost from Pre. Deptt. 31860Direct Material 6300

Direct Labour 10800Factory Overheads 6000 54960

Treatment for Lost Units:-Cost from Pre. Deptt. 3540Direct Material 350Direct Labour 900

Factory Overheads 500 5290

Total Cost Accounted for Rs. 412250


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ADDITIONAL CALCULATIONS:

EPU 'S

Material = Units Completed + (Units Still in Process * Completion Stage) + (Units Lost in Process * Completion Stage)= 50000 + (9000*100%) + (1000*50%)= 50000 + 9000 + 500= 59500 Units

Labour & FOH = Units Completed + (Units Still in Process * Completion Stage) + (Units Lost in Process * Completion Stage)= 50000 + (9000*2/3) + (1000*50%)= 50000 + 6000 + 500= 56500 Units

Per Unit Cost

Per Unit Cost = Cost / EPU's Units

Material = Rs. 41650 / 59500 Units = Rs. 0.7 per unitLabour = Rs. 101700 / 56500 Units = Rs. 1.8 per unitFOH = Rs. 56500 / 56500 Units = Rs. 1.0 per unit


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Paper: Spring 2006Question: 05

( A ) Cost of the Inventory

(1) FIFO Method

Received / Purchase Issued / Sale BalanceQty. P.U Rs. Qty. P.U Rs. Qty. P.U Rs.

OpeningInventory 100 4 400

Purchase 150 4.25 637.5 100 4 400

150 4.25 637.5

Purchase 108 5 540 100 4 400150 4.25 637.5

108 5 540

Purchase 200 5.5 1100 100 4 400150 4.25 637.5108 5 540

200 5.5 1100

Issued 100 4 400 0 4 0150 4.25 637.5 0 4.25 0108 5 540 0 5 0

10 5.5 55 190 5.5 1045

CLOSING INVENTORY 190 5.5 1045


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(2) LIFO Method



Purchase 150 4.25 637.5 100 4 400

150 4.25 637.5

Purchase 108 5 540 100 4 400150 4.25 637.5

108 5 540

Purchase 200 5.5 1100 100 4 400150 4.25 637.5108 5 540

200 5.5 1100

Issued 100 4 40060 4.25 255 90 4.25 382.5

108 5 540 0 5 0

200 5.5 1100 0 5.5 0

CLOSING INVENTORY

100 4 400

90 4.25 382.5

190 - 782.5


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(3) WEIGHTED AVERAGE Method



Purchase 150 4.25 637.5 250 4.15 1037.5

Purchase 108 5 540 358 4.41 1577.5

Purchase 200 5.5 1100 558 4.80 2677.5Issued 368 4.8 1766.4 190 4.80 911.1

CLOSING INVENTORY 190 - 911

( B ) Cost of goods sold(1) (2) (3)

FIFO LIFO Avg.Opening Inventory 400 400 400

Add: Purchases 2277.5 2277.5 2277.5

2677.5 2677.5 2677.5

Less: Closing Inventory 1045 782.5 911

Cost of Goods Sold 1632.5 1895 1766.5

Paper: Spring 2006

Question: 07

Cost of Mateial 18000Direct Labour 29000FOH Applied

Molding Deptt. 3204


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Decorating Deptt. 15950 19154

Req:1 Total Manufacturing Cost 66154Add: Mark up 44323

Req: 2 Bid Price 110477

Paper: Spring 2005

Question: 04

_ _ _ _Assembly Department

Cost of Production ReportFor the month of February

QUANTITY SCHEDULE:Units Received In 60000

Units Completed & Transferred out 50000Units Still in Process 9000

Units Lost in Process (Abnormal Loss) 1000 60000

COST CHARGED TO DEPTT.:- T.C U.CRs. Rs.

Cost from Pre. Deptt. 212400 3.54Cost added by this Deptt.

Direct Material 41650 0.70Direct Labour 101700 1.80Factory Overheads 56500 1.00

Total Cost added by this deptt. 199850 3.50

Total Cost to be accounted for 412250 7.04

COST ACCOUNTED FOR AS FOLLOWS:- Rs.Cost Transferred out 352000Work in Process- Closing Inventory:-


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Cost from Pre. Deptt. 31860Direct Material 6300Direct Labour 10800


Treatment for Lost Units:-Cost from Pre. Deptt. 3540Direct Material 350Direct Labour 900


Total Cost Accounted for Rs. 412250

ADDITIONAL CALCULATIONS:

EPU 'S

Material = Units Completed + (Units Still in Process * Completion Stage) + (Units Lost in Process * Completion Stage)= 50000 + (9000*100%) + (1000*50%)= 50000 + 9000 + 500

= 59500 Units

Labour & FOH = Units Completed + (Units Still in Process * Completion Stage) + (Units Lost in Process * Completion Stage)= 50000 + (9000*2/3) + (1000*50%)= 50000 + 6000 + 500= 56500 Units

Per Unit Cost

Per Unit Cost = Cost / EPU's UnitsMaterial = Rs. 41650 / 59500 Units = Rs. 0.7 per unitLabour = Rs. 101700 / 56500 Units = Rs. 1.8 per unitFOH = Rs. 56500 / 56500 Units = Rs. 1.0 per unit


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Paper: Spring 2005

Question: 05

( A ) Cost of the Inventory

(1) FIFO Method



Purchase 150 4.25 637.5 100 4 400

150 4.25 637.5

Purchase 108 5 540 100 4 400150 4.25 637.5

108 5 540

Purchase 200 5.5 1100 100 4 400150 4.25 637.5108 5 540

200 5.5 1100Issued 100 4 400 0 4 0

150 4.25 637.5 0 4.25 0108 5 540 0 5 0

10 5.5 55 190 5.5 1045

CLOSING INVENTORY 190 5.5 1045


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(2) LIFO Method



Purchase 150 4.25 637.5 100 4 400

150 4.25 637.5

Purchase 108 5 540 100 4 400150 4.25 637.5

108 5 540

Purchase 200 5.5 1100 100 4 400150 4.25 637.5108 5 540

200 5.5 1100

Issued 100 4 40060 4.25 255 90 4.25 382.5

108 5 540 0 5 0200 5.5 1100 0 5.5 0

CLOSING INVENTORY

100 4 400

90 4.25 382.5

190 - 782.5


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(3) WEIGHTED AVERAGE Method



Purchase 150 4.25 637.5 250 4.15 1037.5

Purchase 108 5 540 358 4.41 1577.5

Purchase 200 5.5 1100 558 4.80 2677.5Issued 368 4.8 1766.4 190 4.80 911.1

CLOSING INVENTORY 190 - 911

( B ) Cost of goods sold(1) (2) (3)

FIFO LIFO Avg.Opening Inventory 400 400 400

Add: Purchases 2277.5 2277.5 2277.5

2677.5 2677.5 2677.5

Less: Closing Inventory 1045 782.5 911

Cost of Goods Sold 1632.5 1895 1766.5

Paper: Spring 2005

Question: 07

Cost of Mateial 18000Direct Labour 29000FOH Applied

Molding Deptt. 3204


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Decorating Deptt. 15950 19154

Req:1 Total Manufacturing Cost 66154Add: Mark up 44323

Req: 2 Bid Price 110477

Paper: Spring 2008

Question: 7

Particulars

5000 Units 4000 Units 6000 Units

FixedCost

VariableCost

TotalCost

FixedCost

VariableCost

TotalCost

FixedCost

VariableCost

TotalCost

Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.

Material Cost 25000 25000 0 20000 20000 0 30000 30000Labour Cost 15000 15000 0 12000 12000 0 18000 18000Power 500 750 1250 500 600 1100 500 900 1400Repairs &Maintenance 500 1500 2000 500 1200 1700 500 1800 2300Stores 1000 1000 0 800 800 0 1200 1200Inspection 300 200 500 300 160 460 300 240 540Depreciation 10000 10000 0 8000 8000 0 12000 12000Admin. Overhead 3000 2000 5000 3000 1600 4600 3000 2400 5400

Selling Overhead 1800 1200 3000 1800 960 2760 1800 1440 3240

Total 6100 56650 62750 6100 45320 51420 6100 67980 74080

* Per Unit Cost for 4000 Units

=Total Cost

=51420

= Rs. 12.855 per UnitTotal Units 4000


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* Per Unit Cost for 6000 Units

=Total Cost

=74080

= Rs. 12.35 per UnitTotal Units 6000

Paper: Autumn 2007Question: 4

_ _ _ _ _Department 2

Cost of Production ReportFor the month of July, _ _ _

QUANTITY SCHEDULE:Units Received from Pre. Deptt. 50,000

Units Completed and Transferred out 30,000

Units Completed and In Hand 5,000Units Still in Process 10,000

Units Lost in Process 5,000 50,000

COST CHARGED TO DEPTT.: T.C U.C

Rs. Rs.Cost from Pre. Deptt. (50000*9) 450,000 9.00000

Cost added by this Deptt.:

Direct Material 39,600 0.98753Direct Labour 237,600 5.92519Factory Overhead 158,400 3.95012

Total Cost added by this deptt. 435,600 10.86284Adjusted cost for lost units - 1.00000

435,600 11.86284

Total Cost to be Accounted for 885,600 20.86284


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COST ACCOUNTED FOR AS FOLLOWS: Rs. Rs.Cost Transferred out (30000*20.862838) 625,885.29Finished Goods-Closing Inventory (5000*20.862838) 104,314.21

Work in Process-Closing Inventory:-Adjustment from Pre. Deptt. (10000*10) 100000.00Direct Material 5036.41Direct Labour 30218.45Factory Overhead 20145.64 155,400.50

Total Cost Accounted For Rs. 885,600.00

Additional Calculation:Equivalent Production Units (EPU):Direct Material, Direct Labour and FOH:= Units Completed+(Units in Process*Completion Stage)= 35000 units+{(10000*50%*50%)+(10000*30%*60%)+(10000*20%*40%)}= 35000+(2500+1800+800)= 35000+5100= 40100 Units

Per Unit Cost:

Direct Material = Rs.39600 / 40100 Units = Rs. 0.98753 per UnitDirect Labour = Rs. 237600 / 40100 Units = Rs. 5.92519 per UnitFactory Overheads = Rs. 158400 / 40100 Units = Rs. 3.95012 per Unit

Adjusted Cost for Lost Units:

= (Total Cost from Pre. Deptt. / Good Units) - Per Unit Cost from Pre. Deptt.

= (450000 / 45000) - 9.00= 10 - 9= Rs .1

Work in Process-Closing Inventory:= (Units in Process*Completion Stage) * Per Unit Cost


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Direct Material = (10000*5100/10000) * 0.98753 = Rs. 5036.4081Direct Labour = (10000*5100/10000) * 5.92519 = Rs. 30218.4537

Factory Overheads

= (10000*5100/10000) * 3.95012 = Rs. 20145.612

Paper: Autumn 2007Question: 7

Note : In this question, the data given is in Annual Basis and some data on Monthly,

but the Actual data based on Month.So, we calculate all requirements on Monthly basis.

Monthly Estimated Production = 180000 / 12 = 15000 UnitsMonthly Fixed Estimated Overheads = 36000 / 12 = Rs. 3000Monthly Variable Estimated Overheads = 108000 / 12 = Rs. 9000Monthly Total Estimated Overheads = 3000+9000 = Rs. 12000Monthly Actual Production = 10000 Units

Monthly Actual Overheads =

Rs.

7700

So,

Req. 1 Overhead applied rate per unit

= Estimated Overheads / Estimated Production= (3000+9000) / 15000= 12000 / 15000

= Rs, 0.8 Per Pound

Req. 1 Budgeted Variance

Estimated Overheads (At. Actual) W-1 Rs. 9000

Actual Ovrheads W-2 7700

Favourable Variance Rs. 1300


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Req. 1 Idle Capacity / Volume Variance

Applied Overheads Rs. 8000Estimated Overheads (At. Actual) W-1 9000

Unfavourable Variance Rs. 1000

Working

W-1 Estimated Overheads (At Actual)= Est. Fixed Overheads+ Est. Variable Overheads*

= 3000 + (9000 * 10000/15000)= 3000 + 6000= Rs. 9000

*Note: Est. Variable Overheads are given on Est. basis but we calculate it on actualbasis that why we multiply with actual and divide by est.

W-2 Applied Overheads

= Actual Production * Applied Overhead Rate= 10000 * 0.8= Rs. 8000

Cost Solutions Past Papers

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