Cost Solutions Past Papers

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

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

Less:

Less:

Statement showing after Tax earning Sale Cost of Goods Sold Opening Inv. Add: Purchases Less: Closing Inv. Net Income before Tax Income Tax @ 50%

Net Income after Tax

Req:3:- Cost

FIFO 648

LIFO 648 400 528 928 488

440 208 104

104

400 528 928 568

360 288 144

144

assigned to ending inventory LIFO Closing Inventory:

Req:4:- Comparison

488

FIFO 568

of the result of both the companies

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

Paper: Spring 2007 Question: 04

Jabir Company Income Statement For the yead ending 31st December, 19A

Less: Less:

Sale Cost of Goods Sold: (W-1) Gross Profit Operating Expenses Net Operating Income

Rs. 810000 405000 405000 124000 Rs. 281000

W-1

Jabir Company Cost of Goods Sold For the yead ending 31st December, 19A

Less:

Direct Material Direct Labour Factory Overheads Cost of Goods available for sal Finished Goods-Closing Stock Cost of Goods Sold

Paper: Spring 2007 Question: 05

175000 125000 150000 450000 45000 405000

Nadeem Furniture Cash Budget for the month of Sep & Oct Particulars

Sep Rs.

Opening Balance Receitps: Cash Sales Received from Debtors W-1

40000 96750

Payments: Cash Purchases Payment to Creditors W-2 Cash Operating Expenses Closing Balance

20000 92000 46500 Rs.

W-1

13000

136750 149750

158500 -8750

Oct Rs.

60000 90500

-8750

150500 141750

20000 80000 10000 Rs.

110000 31750

Sep 10000 100000

Oct 12000 80000

110000

92000

Account Receivables Receipts Sep 38750

Receipts for the month of Sep Oct July Aug Total Received from Debtors

W-2 Cash Payments Discount Closing Bal.

Sep 92000 6000 12000 110000

10000 48000

12000

96750

90500

Accounts Paybles Oct 80000 Opening Bal. 3000 Purchases 9000 92000

Oct 31000 47500

Paper: Spring 2007 Question: 06 Applied Rate Estimated Variable Overheads Actual Production Actual Overheads Estimated Fixed Overheads Total Estimated Overheads

Rs. 3 per machine hour Rs. 200000 210000 machine hours Rs. 6310000 Rs. 400000 Rs. 600000

Spending Variance/Budgeted Variance / Expenditure Variance Estimated Overheads (At Actual) W-1 Actual Overheads Unfavourable Variance W-1

Rs. Rs.

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

Idle Capacity / Capacity / Volume Variance

6100000 6310000 210000

Applied Overheads W-2 Estimated Overheads (At Actual) W-1 Favourable Variance

Rs. Rs.

Applied Overheads

W-2

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

Paper: Spring 2007 Question: 07 Req: 1 :- Journal

Entries for Specific Order

1- To record the initial production Work in Process Material Payroll Factory Overheads Applied

Debit Credit 8375 4000 1750 2625

2- To record reworking cost Work in Process Material Payroll Factory Overheads Applied

3-To record completion

71.25 15 22.5 33.75

630000 610000 20000

Finished Goods Work in Process

Req: 2:- Journal

8446.25 8446.25

Entries for Customer

1- To record the initial production Work in Process Material Payroll Factory Overheads Applied

Debit Credit 8550 4000 1750 2800

2- To record reworking cost Factory Overhead Material Payroll Factory Overheads Applied

73.5 15 22.5 36

3-To record completion Finished Goods Work in Process

Paper: Spring 2006 Question: 04

8623.5 8623.5

____ Assembly Department Cost of Production Report For the month of February

QUANTITY SCHEDULE: Units Received In Units Completed & Transferred out Units Still in Process Units Lost in Process (Abnormal Loss)

COST CHARGED TO DEPTT.:Cost from Pre. Deptt. Cost added by this Deptt. Direct Material Direct Labour Factory Overheads Total Cost added by this deptt. Total Cost to be accounted for

60000 50000 9000 1000

60000

T.C

U.C

Rs. 212400

Rs. 3.54

41650 101700 56500 199850 412250

0.70 1.80 1.00 3.50 7.04

COST ACCOUNTED FOR AS FOLLOWS:Cost Transferred out Work in Process- Closing Inventory:Cost from Pre. Deptt. Direct Material Direct Labour Factory Overheads Treatment for Lost Units:Cost from Pre. Deptt. Direct Material Direct Labour Factory Overheads

Total Cost Accounted for

Rs. 352000 31860 6300 10800 6000

54960

3540 350 900 500

5290

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 Units Material = Rs. 41650 / 59500 Units = Rs. 0.7 per unit Labour = Rs. 101700 / 56500 Units = Rs. 1.8 per unit FOH = Rs. 56500 / 56500 Units = Rs. 1.0 per unit

 

Paper: Spring 2006 Question: 05

( A ) Cost of the Inventory (1) FIFO Method

Received / Purchase Qty. Opening Inventory

P.U

Issued / Sale

Rs.

Purchase

150

4.25

637.5

Purchase

108

5

540

Purchase

200

5.5

1100

Issued

Qty.

100 150 108 10

CLOSING INVENTORY

P.U

4 4.25 5 5.5

Balance Rs.

400 637.5 540 55

Qty.

P.U

Rs.

100 100 150 100 150 108 100 150 108 200 0 0 0 190

4 4 4.25 4 4.25 5 4 4.25 5 5.5 4 4.25 5 5.5

400 400 637.5 400 637.5 540 400 637.5 540 1100 0 0 0 1045

190

5.5

1045

 

(2) LIFO Method

Received / Purchase Qty. Opening Inventory

P.U

Issued / Sale

Rs.

Purchase

150

4.25

637.5

Purchase

108

5

540

Purchase

200

5.5

1100

Qty.

P.U

Balance Rs.

Issued 60 108 200

CLOSING INVENTORY

4.25 5 5.5

255 540 1100

Qty.

P.U

100 100 150 100 150 108 100 150 108 200 100 90 0 0 100 90

190

4 4 4.25 4 4.25 5 4 4.25 5 5.5 4 4.25 5 5.5 4 4.25

-

Rs. 400 400 637.5 400 637.5 540 400 637.5 540 1100 400 382.5 0 0 400 382.5

782.5

 

(3) WEIGHTED AVERAGE Method

Received / Purchase Qty. Opening Inventory Purchase Purchase Purchase Issued

P.U

150 108 200

4.25 5 5.5

Rs.

Issued / Sale Qty.

P.U

Balance Rs.

637.5 540 1100 368

4.8

1766.4

CLOSING INVENTORY

Qty.

P.U

100 250 358 558 190

190

4 4.15 4.41 4.80 4.80

-

Rs. 400 1037.5 1577.5 2677.5 911.1

911

( B ) Cost of goods sold Opening Inventory Add: Purchases Less: Closing Inventory

Cost of Goods Sold

(1) FIFO

(2) LIFO

(3) Avg.

400 2277.5 2677.5 1045

400 2277.5 2677.5 782.5

400 2277.5 2677.5 911

1632.5

1895

1766.5

Paper: Spring 2006 Question: 07 Cost of Mateial Direct Labour FOH Applied Molding Deptt.

18000 29000 3204

Decorating Deptt.

15950

Req:1 Total Manufacturing Cost

19154

66154

Add: Mark up

44323

Req: 2 Bid Price

110477

Paper: Spring 2005 Question: 04

____ Assembly Department Cost of Production Report For the month of February

QUANTITY SCHEDULE: Units Received In Units Completed & Transferred out Units Still in Process Units Lost in Process (Abnormal Loss)

COST CHARGED TO DEPTT.:Cost from Pre. Deptt. Cost added by this Deptt. Direct Material Direct Labour Factory Overheads Total Cost added by this deptt. Total Cost to be accounted for

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

60000 50000 9000 1000

60000

T.C

U.C

Rs. 212400

Rs. 3.54

41650 101700 56500 199850 412250

0.70 1.80 1.00 3.50 7.04

Rs. 352000

Cost from Pre. Deptt. Direct Material Direct Labour Factory Overheads

31860 6300 10800 6000

54960

Treatment for Lost Units:Cost from Pre. Deptt. Direct Material Direct Labour Factory Overheads

3540 350 900 500

5290

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 Units Material = Rs. 41650 / 59500 Units = Rs. 0.7 per unit Labour = Rs. 101700 / 56500 Units = Rs. 1.8 per unit FOH = Rs. 56500 / 56500 Units = Rs. 1.0 per unit

Paper: Spring 2005 Question: 05

( A ) Cost of the Inventory (1) FIFO Method

Received / Purchase Qty. Opening Inventory

P.U

Issued / Sale

Rs.

Purchase

150

4.25

637.5

Purchase

108

5

540

Purchase

200

5.5

1100

Issued

Qty.

100 150 108 10

CLOSING INVENTORY

P.U

4 4.25 5 5.5

Balance Rs.

400 637.5 540 55

Qty.

P.U

Rs.

100 100 150 100 150 108 100 150 108 200 0 0 0 190

4 4 4.25 4 4.25 5 4 4.25 5 5.5 4 4.25 5 5.5

400 400 637.5 400 637.5 540 400 637.5 540 1100 0 0 0 1045

190

5.5

1045

 

(2) LIFO Method

Received / Purchase Qty. Opening Inventory

P.U

Issued / Sale

Rs.

Purchase

150

4.25

637.5

Purchase

108

5

540

Purchase

200

5.5

1100

Qty.

P.U

Balance Rs.

Issued 60 108 200

CLOSING INVENTORY

4.25 5 5.5

255 540 1100

Qty.

P.U

100 100 150 100 150 108 100 150 108 200 100 90 0 0 100 90

190

4 4 4.25 4 4.25 5 4 4.25 5 5.5 4 4.25 5 5.5 4 4.25

-

Rs. 400 400 637.5 400 637.5 540 400 637.5 540 1100 400 382.5 0 0 400 382.5

782.5

 

(3) WEIGHTED AVERAGE Method

Received / Purchase Qty. Opening Inventory Purchase Purchase Purchase Issued

P.U

150 108 200

4.25 5 5.5

Rs.

Issued / Sale Qty.

P.U

Balance Rs.

637.5 540 1100 368

4.8

1766.4

CLOSING INVENTORY

Qty.

P.U

100 250 358 558 190

190

4 4.15 4.41 4.80 4.80

-

Rs. 400 1037.5 1577.5 2677.5 911.1

911

( B ) Cost of goods sold Opening Inventory Add: Purchases Less: Closing Inventory

Cost of Goods Sold

(1) FIFO

(2) LIFO

(3) Avg.

400 2277.5 2677.5 1045

400 2277.5 2677.5 782.5

400 2277.5 2677.5 911

1632.5

1895

1766.5

Paper: Spring 2005 Question: 07 Cost of Mateial Direct Labour FOH Applied Molding Deptt.

18000 29000 3204

Decorating Deptt.

15950

19154

Req:1 Total Manufacturing Cost

66154

Add: Mark up

44323

Req: 2 Bid Price

110477

Paper: Spring 2008 Question: 7 5000 Units Fixed Variable Cost Cost Rs. Rs. 25000 15000 500 750

Particulars Material Cost Labour Cost Power Repairs & Maintenance Stores Inspection Depreciation Admin. Overhead Selling Overhead

500 300 3000 1800

Total

6100

1500 1000 200 10000 2000 1200 56650

Total Cost Rs. 25000 15000 1250 2000 1000 500 10000 5000 3000

4000 Units Fixed Variable Total Cost Cost Cost Rs. Rs. Rs. 0 20000 20000 0 12000 12000 500 600 1100 500 0 300 0 3000 1800

62750

6100

=

51420 4000

1200 800 160 8000 1600 960 45320

1700 800 460 8000 4600 2760 51420

Fixed Cost Rs. 0 0 500

6000 Units Variable Cost Rs. 30000 18000 900

Total Cost Rs. 30000 18000 1400

500 0 300 0 3000 1800

1800 1200 240 12000 2400 1440

2300 1200 540 12000 5400 3240

6100

* Per Unit Cost for 4000 Units =

Total Cost Total Units

= Rs. 12.855 per Unit

67980

74080

 

* Per Unit Cost for 6000 Units =

Total Cost Total Units

=

74080 6000

= Rs. 12.35 per Unit

Paper: Autumn 2007 Question: 4 _____ Department 2 Cost of Production Report For the month of July, _ _ _

QUANTITY SCHEDULE: Units Received from Pre. Deptt. Units Completed and Transferred out Units Completed and In Hand Units Still in Process Units Lost in Process

COST CHARGED TO DEPTT.: Cost from Pre. Deptt. (50000*9) Cost added by this Deptt.: Direct Material Direct Labour Factory Overhead Total Cost added by this deptt. Adjusted cost for lost units Total Cost to be Accounted for

50,000 30,000 5,000 10,000 5,000

50,000

T.C Rs. 450,000

U.C Rs. 9.00000

39,600 237,600 158,400 435,600 435,600 885,600

0.98753 5.92519 3.95012 10.86284 1.00000 11.86284 20.86284

COST ACCOUNTED FOR AS FOLLOWS: Cost Transferred out (30000*20.862838) Finished Goods-Closing Inventory (5000*20.862838) Work in Process-Closing Inventory:Adjustment from Pre. Deptt. (10000*10) Direct Material Direct Labour Factory Overhead Total Cost Accounted For

Rs.

100000.00 5036.41 30218.45 20145.64

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 Unit Direct Labour = Rs. 237600 / 40100 Units = Rs. 5.92519 per Unit Factory 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

Rs. 625,885.29 104,314.21

155,400.50 Rs. 885,600.00

Direct Material = Direct Labour = Factory Overheads =

(10000*5100/10000) * 0.98753 = Rs. 5036.4081 (10000*5100/10000) * 5.92519 = Rs. 30218.4537 (10000*5100/10000) * 3.95012 = Rs. 20145.612

Paper: Autumn 2007 Question: 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 Monthly Fixed Estimated Overheads Monthly Variable Estimated Overheads Monthly Total Estimated Overheads Monthly Actual Production

= = = = =

Monthly Actual Overheads

=

180000 / 12 = 15000 Units 36000 / 12 = Rs. 3000 108000 / 12 = Rs. 9000 3000+9000 = Rs. 12000 10000 Units Rs. 7700

So, Req. 1

Overhead applied rate per unit = = = =

Req. 1

Estimated Overheads / Estimated Production (3000+9000) / 15000 12000 / 15000 Rs, 0.8 Per Pound

Budgeted Variance

Estimated Overheads (At. Actual) Actual Ovrheads W-2 Favourable Variance

W-1

Rs. Rs.

9000 7700 1300

Req. 1

Idle Capacity / Volume Variance

Applied Overheads Estimated Overheads (At. Actual) Unfavourable Variance

Rs. W-1 Rs.

8000 9000 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 actual basis that why we multiply with actual and divide by est.

W-2 Applied Overheads = = =

 

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