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Punjab University PU Lahore B.COM Part 2 Past Paper of Cost Accounting year 2014

Punjab University PU Lahore B.COM Part 2 Past Paper of Cost Accounting    year 2014

Cost Accounting 2014

Time Allowed: 3 Hours New Course Marks: 100

Note: Attempt any five questions. All questions carry equal marks.

Question # 1

From the following information prepare an income statement for the year ended December 31, 2013.

Beginning inventory (at sales price) Rs. 65,000

Purchase during the year (at cost) Rs. 450,000

Closing inventory (at sales price) Rs. 75,000

Sales (at sales price) Rs. 590,000

Selling expenses amounted to 3% of sales and general administrative expenses amounted to 2% of sales.

Required: An income statement for the year 2013

Question # 2

Khubaib manufacturing company uses process cost system. Costs of department 2 for the month of June were as under:

Cost from preceding department Rs. 20,000

Cost added:

Materials Rs. 21,816

Labor Rs. 7,776

Factory overhead Rs. 4,104 Rs. 33,696

The following information was obtained from the department’s quantity schedule:

Units received 5,000

Units transferred out 4,000

Units still in process 1,000

The degree of completion of work in process was:

50% of the units were 40% complete
20% of the units were 30% complete
Balance of the units were 20% complete
Required: Prepare cost of production report of department 2 for June.

Question # 3

Gujranwala Enterprises received an order for manufacture of 500 units of their product “y” from Lahore Company. Following costs were incurred for filling the order:

Direct materials cost Rs. 25,000

Direct labor cost Rs. 50,000

Factory overhead applied was 50% of direct labor cost.

Additional costs incurred for rework on 50 units found defective were as follow:

Direct materials cost Rs. 2,000

Direct labor cost Rs. 2,000

Factory overhead at applied rate

Required:

Prepare journal entries to record completion of the order when:

Job is charged with the cost of defective work.
Cost is not so charged. Also calculate cost per unit in both of the cases.
Question # 4

A company has three production departments X, Y & Z, and two service department A & B the expenses incurred by them during the month are:

X Rs. 80,000
Y Rs. 70,000
Z Rs. 50,000
A Rs. 23,400
B Rs. 30,000
Expenses of service departments are apportioned to the production and to the co-service department on the following basis:

X Y Z A B

Expenses of A 20% 40% 30% 10%

Expenses of B 40% 20% 20% 20%

Required:

Apportion expenses of A & B departments to X, Y & Z departments with the help of simultaneous equations method and calculate total factory overhead cost of the production departments.

Question # 5

Following figures are taken from annual budget of ABC manufacturers for the year 2013:

Fixed factory overhead Rs. 4,000,000

Factory overhead absorption rate Rs. 70 per direct labor hour

Variable factory overhead rate Rs. 30 per direct labor hour

Following are a few figures of actual results of year 2013:

Capacity attained 110,000 hours

Factory overhead Rs. 8,000,000

Required:

Budgeted capacity that was used to compute factory overhead absorption rate
Analysis of under or over absorbed factory overhead into volume and budget variances
Question # 6

Abdullah and Ahmad are two workers in assembling department of a manufacturing concern. During each day of previous week their hours worked are as under:

Days Hours Worked

Abdullah Ahmad

Monday 10 9

Tuesday 11 10

Wednesday 9 9

Thursday 8 10

Friday 9 8

Saturday 8 4

Required:

Normal and overtime wages of Abdullah and Ahmad for the week if:

Normal working hours are 8
Normal rate is Rs. 80 per hour
Workers are paid at double the normal rate for overtime.
Question # 7

Following transactions are related to Marium manufacturing company, Lahore. Factory is situated at Gugrat. Total payroll cost for the month Rs. 800,000; employees’ income tax withheld Rs. 40,000, deduction for the provident fund at the rate of 10% of gross payroll, voucher for net earnings of employees was prepared and paid. Payroll analysis sheet revealed the following information:

Direct labor Rs. 450,000

Indirect labor Rs. 100,000

Sales salaries Rs. 150,000

Office salaries Rs. 100,000

Note: Employees provident fund contribution by the employer is at the same rate as the rate of deduction, rate of social security fund contribution by employer is 5% of gross pay.

Required:

Prepare journal entries to record the above transactions in general office books and factory office books.

Question # 8

Explain the following:

Process cost method
Perpetual inventory system
First in first out method
Expenditure variance

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