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Balance b/d
100 units @ Rs. 12
Purchased
100 units @ Rs. 14
Purchased
100 units @ Rs. 13
Issued
I50 units
Issued
100 units
Purchased
100 units @ Rs. 15
Returned to supplier 30 units
purchased on Jan. 3
Required: Record the above transaction in perpetual inventory card of the material using
i. FIFO, ii. LIFO and iii. Weighted average method of costing.
4. Consumption forecast of two materials A and B is as follow:
Maximum daily consumption
600 units
Average daily consumption
500 units
Minimum daily consumption
400 units
Materials A
Materials B
Lead time
4-8 days
3-5 days
Lead time to get urgent supply
3 days
1 day
EOQ
5000 units
3000 units
Required: Calculate for each of the materials
i.
Order level ii. Minimum Level iii. Maximum Level iv. Danger Level
5. Irfan industries Limited has two production departments A and B, and two mutually
interdependent service departments X and Y. Cost of service departments are apportioned
on the bases of following percentages:
A
B
X
Y
Service Department X
50%
30%
---
20%
Service Department Y
40%
50%
10%
----
Following figures of departmental costs are available after the primary distribution:
Department A Rs. 15750
Required: Calculate total factory overhead of production departments by preparing a work sheet
showing the secondary distribution using: i. Repeated distribution method and Algebraic method.
6. Predetermined factory overhead absorption rate computed by Al-Nasir Industries is Rs. 6 per
machine hour. Budgeted factory overhead for activity level of 150000 machine hours is Rs.
800000 and for activity level of 100000 machine hours it is Rs. 700000. Actual factory overhead
incurred during the year is Rs. 710000 at an actual volume of 120000 machine hours.
Required:
ii.
Variable factory overhead absorption rate.
iii.
Budgeted fixed factory overhead
iv.
Budgeted activity level on which the absorption rate is based.
v.
Over or under applied factory overhead
vi.
Volume variance
vii.
Spending variance
7. Differentiate between Financial Accounting and Cost Accounting.