HI-AIMS COLLEGE OF COMMERCE AND MANAGEMENT SARGODHA

Send Up Exam 2014, B.Com Part-II

Paper: Cost Accounting Max. Marks: 100
Times Allowed: 3 Hours Pass Marks: 40

NOTE: Attempt any five questions of the following. All questions carry equal marks.

Q1 During the month of April 2009 following transactions took place.
(a) Material purchased, received and recorded Rs.250,000
(b) Material requisitioned on Job 101, 102, 103 220,000
(c) Indirect material requisitioned 12,000
(d) Material returned to supplier 4,000
(e) excess material returned from the factory to storeroom 10,000
( This return is applicable to job 102)
(f) Payments of wages and salaries were made based on the following information:
Time tickets on job 101,102,102 (25,000 hrs) Rs 200,000
Clock cards and time tickets for all other indirect labour 60,000
Sales salaries and commission 40,000
Office and general administration payroll 20,000
Total 320,000
Employees provident fund contribution: 10% of total wages, income tax withheld Rs 8,000
(g) The company contributes 10% as its contributions of provident fund.
(h) Factory overhead control account in voucher register was debited for Rs 160,000. Month end
adjusting entries charged for depreciation Rs 25,000 and for insurance Rs 10,000.
(i) Factory overhead is applied at the rate of 120% of direct labour cost.
(j) Goods costing Rs.105,000 were completed.
(k) Goods costing Rs.100,000 were sold for Rs. 180,000 (Rs 80,000 for cash)

You are required to pass journal entries in the factory office books and general office books.

Q.2 A company uses process costing in its two departments. Material are added at the end of the process
after quality control inspection. No abnormal spoilage occurred during the month.
During October 2,500 units were received from department 1 at a cost of Rs.50,000. Cost
incurred by department 2 during October were:
Materials Rs.8,000
Conversion cost Rs 36,000
A total of 2,000 units were transferred to finished goods inventory. The 300 units still in process at
the end of October were 2/3
rd
complete as to conversion cost.
REQUIRED: Cost of production report for October of Department 2

Q.3 Following data have been taken from the records of Alpha Corporation:
Jan.1 Dec.31
Rs. Rs.
Inventories:
Finished Goods
48600 ?
Work in Process 81500 42350
Materials 34200 49300
Other Informations:
Depreciation on factory equipment 21350
Interest earned 6300
Raw materials purchased 364000
Direct Labor 162500
Indirect Labor 83400
Freight in 8600
Factory overhead 47900
Purchase Discount 5200
Finished goods inventory on 1
st
January 300 units and on 31
st
December 420 units (all from current years
production). Sales during the year, 3880 units at Rs. 220 per unit..
Required:
1. Unit cost of finished goods inventory on 31
st
December.
2. Total cost of finished goods inventory on 31
st
December.
3. Cost of Goods sold.
4. Gross profit--------total and per unit.

Q.4 The average daily requirement of 6" diameter dish-shaped grinding wheel is 3 pieces. Time required
to score delivery from the usual supplier is 2 weeks. From the records of Novelty Tool Workers, it is
found that maximum requirement of the wheel in any month of 4 weeks does not exceed 100 pieces
and minimum requirement during any such period is not likely to fall below 50 pieces.
You are asked to fix minimum and maximum limits and also the ordering level. Assume the
economic order quantity to be 5 dozen. If 2 days are sufficient to receive emergency supply, fix also
the danger level.



Q.5. Factory overhead burden rate of Kings Chemical Industries is Rs.2.25 per hour. Budgeted overhead
at two activity levels is as under:
Activity Level Budgeted Factory overhead
15,000 hours Rs. 40,000
35,000 hours Rs. 60,000
Actual factory overhead for the period was Rs.49,800 and actual volume was 25,000 hours.
Required: (i) Variable overhead burden rate.
(ii) Budgeted fixed overhead.
(iii) Budgeted volume at which the burden rate is computed.
(iv) Applied overhead.
(v) Under or over applied overhead.
(vi) Volume variance.
(vii) Spending variance.
Q.6 Workers paid under the following scheme of differential piece rates:
Upto 100 pieces per day Rs.2.25 per piece
101______140 pieces per day Rs.2.85 per piece
141______ 180 pieces per day Rs.3.45 per piece
181& above pieces per day Rs.4.50 per piece
Output of workers during a day is as follows:
Names A B C D E F
Pieces
produced
98 120 135 145 182 200
Required: - Calculate gross wages of the day.


Q.7 What is meant by the term materials? Explain different classifications of materials by giving
suitable examples.

Q.8. Write short answer of the following
i) Cost ii) Semi Variable Cost
iii) Job order cost iv) Conversion Cost
v) Voucher vi) Abnormal Loss
vii) Equivalent production viii) Average Cost Method
ix) Process Costing x) Predetermined Factory overhead