LOVELY PROFESSIONAL UNIVERSITY

HOME WORK: III

School: LSM Department: Management

Name of the faculty member: Upma Sonik Course No: COM203
Course Title: Cost Accounting- I
Class: B. COM (Professional) MBA Term: I Section: S3901 Batch: 2009-12
Max. Marks: 15 Date of Allotment: 15-10-2010 Date of Submission: 25-10-2010

Part-A
Q1. Calculate the earnings of workers A and B under Straight Piece Rate System and Taylor’s Differential Piece
Rate System from the following particulars:
Normal rate per hour: Rs. 1.80
Standard time per unit: 20 seconds.
Differentials to be applied:
80% of piece rate below standard.
120% of piece rate at or above standard.
Worker A produces 1,300 units per day and worker B produces 1,500 units per day.

Q2. Calculate the earnings of worker A, B and C under Straight piece rate system and Merrick’s multiple piece
rate system from the following particulars:
Normal rate per hour: Rs. 1.80
Standard time per unit: 1 minute
Output per day is as follows:
Worker A – 384 units
Worker B – 450 units
Worker C – 552 units.
Working hours per day are 8.

Q3. (a) The firm employs five workers at an hourly rate of Rs. 2. During the week, they
worked for 4days for a total period of 40 hours each and completed a job for which the
standard time was 48 hours for each worker. Calculate the labour cost under the Halsey
method and Rowan method of incentive plan payments.

(b) The standard time allowed for the job is 30 hrs. The hourly rate of guaranteed wages is
Rs. 1.50. Because of the saving in time, a worker X gets an hourly wage of Rs. 1.80 under
Rowan Premium Bonus Plan. For the same saving in time, calculate the hourly rate of
wages a worker Y will get under Halsey Premium Bonus Plan.

Part-B

Q. 4: Kumresh Ltd. has three production departments P1, P2 and P3 and two service departments S1 and S2. The
following figures are extracted from the records of the company:
Rs.
Rent and rates 5,000
Indirect wages 1,500
Depreciation of machinery 10,000
General lighting 600
Power 1,500
Sundries 10,000
Following details are available:
Total P1 P2 P3 S1 S2
Floor space (sq. meters) 10,000 2,000 2,500 3,000 2,000 500
Light points 60 10 15 20 10 5
Direct wages (Rs.) 10,000 3,000 2,000 3,000 1,500 500
H.P. of machines 150 60 30 50 10 ----
Value of Machinery (Rs.) 2,50,000 60,000 80,000 1,00,000 5,000 5,000
Apportion the costs to various departments on the most equitable basis by preparing a primary departmental
distribution summary.

Q. 5: The following particulars relate to a manufacturing company which has three production departments P1,
P2 and P3 and two service departments S1 and S2.
Departments
P1 P2 P3 S1 S2
Total departmental overheads as per 6,300 7,400 2,800 4,500 2,000
primary distribution (Rs.)
The company decided to charge the service departments cost on the basis of following percentage:
Service departments Production departments Service departments
P1 P2 P3 S1 S2
S1 40% 30% 20% -- 10%
S2 30% 30% 20% 20% --
Find the total overheads of production departments charging Service departments’ costs to production
departments on
(a) Repeated distribution.
(b) By Simultaneous equation method.

Q. 6: Calculate Machine Hour Rate from the following:

(i) Cost of machine Rs. 19,200.
(ii) Estimated scrape value Rs. 1,200.
(iii) Average repairs and maintenance charges per month Rs. 150.
(iv) Standing charges allocated to machine per month R. 50.
(v) Effective working life of machine 10,000 hours.
(vi) Running time per month 166 hours.
(vii) Power used by machine: 5 units per hour @ 19 paise per unit.

Upma Sonik
Date: Sig. of Faculty member
Remarks by HOD (Mandatory)

Sig. of HOD with date

Remarks by HOS (Mandatory)

Sig. of HOS with date