2011 Merged PDF

Cost Accounting Past Papers B.
Com Part 2 2011

Punjab University
QUESTION PAPER 2011
Cost Accounting Paper: BC-406

Time Allowed: 3 Hrs. Marks: 100
Attempt any FIVE questions and all questions carry equal marks.
Q.1 Define cost accounting. How does it differ from financial accounting?
Q.2 Cost accountant of THAL Manufacturing Company has prepared following summary:
Inventories at 1st July, 2010:
Rs.
Raw materials 30,000
Work in process 18,000
Fuel 2,000
Factory repair parts 1,000
Finished goods 13,000
During the month following transaction took place
Raw material purchased 130,000
Fuel purchased 18,000
Direct labour 120,000
Miscellaneous factory overhead 4,000
Repairs of factory (including purchase of parts) 5,000
Depreciation of plant 3,000
Superintendence 2,000
Transportation out 2,000
Purchase discount lost 1,000
Indirect factory labour 3,000
Inventories at 31st July, 2010:
Raw materials 32,000
Fuel 3,000
Factory repair parts 2,000
Required: Prepare a statement of Cost of Goods Sold.
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Cost Accounting Past Papers B.Com Part 2 2011
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Q.3 Annual estimated Factory Overhead of a company for an expected volume of 180,000 pounds of a
product was as follows:
Fixed Overhead Rs. 36,000

Variable Overhead Rs. 108,000
Output was 10,000 pounds in June and actual overhead expenses were Rs. 7,700.
REQUIRED:
(i) The overhead rate per unit.
(ii) Spending variance
(iii) Idle capacity variance.
Q.4 A company received an order for 1,000 instruments at a sales price of Rs. 75 per instrument. Costs
incurred to manufacture these instruments were:
Direct materials Rs. 20 per instrument

Direct labour Rs. 10 per instrument
Manufacturing overhead was applied @ 200% of direct labour cost.
On final inspection it was found that 200 instruments were defective which were returned to
concerned department of factory for rework. The additional costs for this rework were:
Direct labour Rs. 1,000

Manufacturing overhead at applied rate.
Required: Entries that would appear in the books under each of the following conditions:
(i) When reworking costs are charged directly to the job on which they occurred.
(ii) When additional costs incurred in reworking are charged to factory overhead account.
Setup entries in two parallel columns for the following:
(a) To record initial cost of manufacturing the order.

(b) To record the additional costs for correcting the defective work.
(c) To record the completion of the order.
(d) To record the shipment of the order to the customer.
Q.5 Ramdan company had its factory in Karachi but its head office is in Lahore. On October 1st 2010, the
Factory trial balance appeared as follows:
Rs. Rs.
Materials 30,000
Finished Goods 40,000
Factory Overhead Control 580,000

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Factory machinery 240,000

Accumulated depreciation on factory machinery 72,000
Applied factory overhead 569,000
General Ledger 329,000
Total 970,000970,000
The following transactions were complete during October:

(a) Direct materials Rs. 100,000 were purchased on terms 2/10, n/30.
(b) The factory payroll for Rs. 75,000 direct labour and Rs. 15,000 indirect labor was mailed to
the home office. The home office payroll was Rs. 20,000 foe sales salaries and Rs. 30,000
for general office salaries. Employees’ payroll deductions were recorded at the home office
at the following rates:
15% of Gross earnings for Income Tax;

10% of Gross earnings as provident fund contribution by the employees.
(c) Materials requisitions were as follows:
Rs.
Direct materials 70,000
Indirect material 8,500
Shipping supplies 1,500
(d) Indirect factory materials and supplies amounting to Rs. 25,000 were purchased.
(e) Defective indirect materials returned to the supplier amounted to Rs. 1,000.
(f) Sundry factory expensed of Rs. 8,300 were recorded.
(g) Depreciation of an annual rate of 10% of the original cost was recorded on the factory
Machinery.
(h) Accounts payable totaling Rs. 210,000 including the accrued payroll, were paid.
(i) Factory overhead was applied to production at the rate of Rs. 6 per direct labour hour; the
Factory worked 7,000 hours.
(j) Goods completed with a total cost of Rs. 215,000.
(k) Goods costing Rs. 200,000 were sold for Rs. 274,000.
Required: Journal entries to record the above transactions on the general office and on the factory
office books.
Q.6 Calculate the normal and overtime wages payable to a worker for the following data:
Days Hours worked
Monday 10
Tuesday 11
Wednesday 9
Thursday 12
Saturday 40
Sunday 4

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Normal working hours were 8 hours per day. Normal rate was Rs. 10.00 per hour. Overtime rate was
as follows:
Up to 9 hours in a day at single rate and over 9 hours in a day at double rate or up to 48 hours at
single rate and above it at double rate, which is more beneficial to the worker.
Q.7 During January 2010, Department 2 received 20,000 units @ Rs. 19.50 from Department 1. Direct
Labour of Rs. 36,284 and factory overhead of Rs. 72,568 were spend to process these units. During
Processing 500 units were lost as unavoidable spoilage. 3,500 units estimated to be 80% completed,
Were in process at the end of month. Remaining units were passed on to Department 3.
Required: Cost of production report of December 2 and 31st January, 2010.
Q.8 Define the following term:

1. Conversion cost.
2. Job Order Costing
3. Semi-variable cost.
4. E.O.Q (Economic Order Quantity).
5. Breakeven point.

Cost Accounting B.Com Part 2 Solved Past Papers 2011
Punjab University
QUESTION NO. 2
THAL Manufacturing Company
Cost of Goods Manufactured & Sold Statement
For the period ended 31st July 2010
Rs. Rs.
Direct Material Cost:
Opening Inventory 30,000
Add: Raw material purchased 130,000
Cost of Raw material available for use 160,000
Less: Closing Inventory (32,000)
Raw Material Used / Consumed / Put into Process 128,000
Add: Direct Labour Cost 120,000
Prime Cost 248,000
Add: Factory Overhead cost 33,000
Total factory cost 281,000
Add: Work in process – Opening Inventory 18,000
Cost of Goods to be manufactured 299,000
Less: Work in process – closing inventory (22,000)
Cost of goods manufactured 277,000
Add: Finished Goods – opening inventory 13,000
Cost of goods available for sale 290,000
Less: Finished Goods – closing inventory (18,000)
Cost of Goods Sold 272,000
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WORKING:
Factory Overhead Cost: Rs. Rs.
Fuel used:
Opening Inventory of fuel 2,000
Add: Fuel purchased 18,000
20,000
Less: Closing inventory of fuel (3,000) 17,000
Factory Repair Parts Used:
Opening Inventory of parts 1,000
Add: Parts purchased 5,000
6,000
Less: Closing Inventory of parts (2,000) 4,000
Miscellaneous Factory Overhead 4,000
Depreciation of plant 3,000
Superintendence 2,000
Indirect Factory Labour 3,000
33,000
QUESTION NO 3
(i) The Overhead Rate Per Pound:
. .
Overhead Rate per Pound =
. ,
=
,
Overhead Rate Per Pound = Rs. 0.80 Per Pound
(ii)Spending Variance: Rs. Rs.

Actual F.O.H Cost 7,700
Estimated F.O.H Cost for 10,000 Pounds:
Fixed F.O.HCost (36,000 ÷ 12) 3,000
Variable F.O.H Cost:

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= 10,000 Pounds × Rs. 0.60 = 6,000 9,000
Favorable 1,300
(ii) Idle Capacity Variance: Rs.
Estimated F.O.H Cost for 10,000 Pounds 9,000
Applied F.O.H Cost:
= 10,000 Pounds × Rs. 0.80 = 8,000

Unfavorable (1,000)
WORKINGS:
Variable F.O.H Rate:
. .
=
. ,
=
,
= Variable F.O.H Rate = Rs. 0.60 Per Pound
QUESTION NO 4
(i) When reworking costs are charged directly to the job on which they occurred:
JOURNAL
Date Particulars Debit (Rs) Credit (Rs)
(a) W.I.P – Material A/c (1,000 × 20) 20,000
W.I.P – Labor A/c (1,000 × 10) 10,000
W.I.P – F.O.H A/c (10,000 × 200%) 20,000
Material A/c 20,000
Factory Payroll A/c 10,000
F.O.H Applied A/c 20,000
(Initial manufacturing cost of 1000 instruments recorded)
(b) W.I.P – Labor A/c 1,000
W.I.P – F.O.H A/c (1,000 × 200%) 2,000
(Additional cost for correcting the defective instruments
recorded)
(c) Finished Goods A/c 53,000
W.I.P – Material A/c 20,000
W.I.P – Labor A/c 11,000
W.I.P – F.O.H A/c 22,000

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(Cost of finished goods recorded)
(d) (i) Cost of goods sold 53,000
Finished Goods A/c 53,000
(Cost of goods sold recorded)
(d) (ii) Accounts receivable A/c (1,000 × 75) 75,000
Sales 75,000
(Goods sold to customer)
TOTAL 234,000 234,000
(ii) When additional cost incurred in reworking are charged to factory overhead account:
(a) W.I.P – Material A/c (1,000 × 20) 20,000
W.I.P – Labor A/c (1,000 × 10) 10,000
W.I.P – F.O.H A/c (10,000 × 200%) 20,000
Material A/c 20,000
(Initial manufacturing cost of 1000 instruments recorded)
(b) Factory Overhead Control A/c 3,000
F.O.H Applied A/c (1,000 × 200%) 2,000
(Additional cost for correcting the 200 defective instruments
recorded)
Finished Goods A/c 50,000
(c) W.I.P – Material A/c 20,000
W.I.P – Labor A/c 10,000
W.I.P – F.O.H A/c 22,000
Cost of goods sold A/c 50,000
(d) (i) Finished Goods A/c 50,000
Accounts receivable A/c (1,000 × 75) 75,000
(d) (ii) Sales 75,000
TOTAL 228,000 228,000
QUESTION NO 5
General Ledger’s Journal

(a) Factory Ledger 100,000
Vender Payable 100,000
(Material purchased and sent to factory)
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(b) (i) Payroll 140,000
Income Tax 21,000
Provident Fund 14,000
Accrued Payroll 105,000
(Payrolls and deduction recorded)
(ii) Accrued Payroll 105,000
Voucher Payable 105,000
(Accrued payroll vouchered)
(iii) Factory Payroll
Selling Expense 90,000
Administrative Expense 20,000
Payroll 30,000
(Distribution of total payroll) 140,000
(c) Selling Expense 1,500
Factory Ledger 1,500
(Shipping supplies issued from store)
(d) Factory Ledger 25,000
(Indirect material and supplies purchased and sent to factory)
(e) Voucher Payable 1,000
(Defective indirect material return to supplier)
(f) Factory Ledger 8,300
Voucher Payable
(Sundry factory overhead were recorded)
(g) No entry
Accounts Payable
(h) 210,000
Cash
210,000
(Accounts payable including accrued payroll were paid)
No entry
(i)
(j) No entry
Cost of Goods Sold 200,000
Accounts Receivable 274,000
Sales 274,000
(Goods sold to customers)
TOTAL 1,204,800 1,204,800
Factory Office Book

(a) Material 100,000
(Materials received from head office)
(b) W.I.P 75,000

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F.O.H Control 15,000
(Factory payrolls recorded)
(c) W.I.P 70,000
F.O.H Control 8,500
Materials 80,000
(Materials issued from store)
(d) Materials 25,000
(Indirect materials received from the head office)
(e) General Ledger 1,000
Materials 1,000
(f) F.O.H Control 8,300
(Sundry factory expenses recorded)
(g) F.O.H Control 24,000
Factory Machinery 24,000
(Depreciation on factory machinery recorded)
(h) No Entry
(i) W.I.P 42,000
F.O.H Applied (7,000 × 6) 42,000
(FOH applied to production @ Rs. 6 per direct labour hours)
(j) Finished Goods 215,000
W.I.P 215,000
(k) General Ledger 200,000
Finished Goods 200,000
TOTAL 785,300 785,300
QUESTION NO 6
Normal Wages
Normal
Hours Overtime (Normal Overtime Total
Days Working
Worked Calculations working Hours × Wages Wages
Hours
Rs. 10)
(Hrs) (Hrs) Single Double (Rs.) (Rs.) (Rs.)
Monday 10 8 1 1 80 30 110
Tuesday 11 8 1 2 80 50 130
Wednesday 9 8 1 - 80 10 90
Thursday 12 8 1 3 80 70 150
Saturday 10 8 1 1 80 30 110
Sunday 4 4 - - 40 - 40
56 440 190 630

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QUESTION NO 7
……Manufacturing Co.
Department No 2
Cost production report
For the period ended 31st January 2010
1. Quantity Schedule: Units Units
Units received from Department 1 20,000
Units completed and transferred to department 3 16,000
Units still in process 3,500
Units cost in process (Abnormal) 500 20,000
2. Cost charged to the department Cost Per unit cost
a. Cost received from Department 1 390,000 19.50
b. Cost added by the department:
i. Direct labour cost 36,284 1.88
ii. F.O.H Cost 72,568 3.76
108,852 5.64
498,852 25.14
3. Cost accounted for as follows: Rs. Rs.

a. Cost of units completed & transferred to dept 3
= 16,000 units × Rs. 25.14 402,240
b. Cost of units still in process:

i. Cost received from department 1:
= 3,500 units × Rs. 19.50 = 68.250
ii. Cost added by the department:
Direct labour cost = 3,500 × 80% × Rs. 1.88 = 5,264
F.O.H Cost = 3,500 × 80% × Rs. 3.76 = 10,528 84,042
c. Cost of abnormal loss (Unavoidable):
= 500 units × Rs. 25.14 = 12,570
Total Cost accounted for 498,852

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4. Computations explanation:
a. Equivalent production: Units
Direct labour = 16,000 + (3,500 × 80%) + 500 19,300
F.O.H = 16,000 + (3,500 × 80%) + 500 19,300
b. Per Unit cost:
Rs.
Direct labour cost = 36,284 ÷ 19,300 1.88
F.O.H Cost = 72,568 ÷ 19,300 3.76
5.64

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QUESTION PAPER 2012
Subject: Cost Accounting Time Allowed: 3 hrs

Paper: BC-406 Max Marks: 100
Attempt any five questions. All questions carry equal marks.
Q.1 The following data is presented by the Akram Manufacturing Company:

Changes in inventories: Rs.
Raw material increased by 15,500
Work in process decreased by 18,900
Finished goods increased by 8,700
Purchases of raw material 150,000
Direct labor cost 125,000
Manufacturing overhead 75,000
Required:
From the above information, compute the cost of Goods Sold.
Q.2 A manufacturing company estimates its carrying cost at 15% and ordering cost at RS. 9 per order.
The estimated annual requirement is 48,000 Units at a price of Rs. 4 per unit.
Required:
(i) What is the most economical order quantity?
(ii) How many orders need to be placed
Q.3 Annual estimated Factory Overhead of a company foe an expected volume of 180,000 pounds of a
product was as follows:
Fixed overhead Rs. 36,000
Variable overhead Rs. 108,000
Required:
(i) The overhead rate per unit.
(ii) Spending variance.
(iii) Idle capacity variance.
Q.4 Zakir electrical industry produces U.P.S. Assembling the last producing department during April
received 1,700 units from preceding department at unit cost of Rs. 2,544. During the month a total
of 1,626 units were assembled. At the end of month 10 of the assembled units were in the
department awaiting transfer. 70 in process units were estimated to be 4/5 complete as to materials
and 3/5 complete as to labor and factory overhead. Remaining units were lost during processing.
Direct materials Rs. 3,767,680, direct labor Rs. 420,336 and factory overhead RS. 380,304 were
charged to the department during April. There was no work in process beginning inventory.
Required:
a. Schedule of equivalent production
b. Cost of production report

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Q.5 The standard time foe the completion of a certain job is fixed at 200 hours. Normal wages are paid to
the workers according to time rate which is Rs. 25 per hour. If the job is completed in lesser time a
bonus is paid to the worker calculated on the following lines:
 Up to first 20% saving in time 25% of the corresponding saving in time.
 For and within next 30% saving in time 50% of the corresponding saving in time.
 For and within next 30% saving in time 30% of the corresponding saving in time.
Required: Compute the total earning and earning per hour of the following workers:
Workers Time Taken (Hours)
Arshad 210
Amjad 160
Nazar 120
Naheed 50
Q.6 Following are the transactions in summarized form of Abpara Paper Mill for the month of June,
2011.
(a) Direct materials of Rs. 140,000 and indirect materials of Rs. 20,000 were purchased during
the
month, out of which direct materials of Rs. 5,000 were returned to suppliers.
(b) Materials Requisition Summary for the month showed following issues:
Direct materials Rs. 120,000
Indirect materials Rs. 15,000
Shipping supplies Rs. 5,000
However, direct materials of Rs. 5,000 and indirect materials of Rs. 2,000 were returned back to
storeroom as shown by Materials Returned Notes.
(c) A further purchase of direct materials of Rs. 10,000 was made and on receipt of the
consignment
it was directly delivered to factory for use in production.
(d) Gross salaries and wages for the month as shown by Payroll Register were Rs.
125,000.
Deduction of Income Tax at source totaled Rs. 5,000 and of provident fund Rs. 12,500. The
company contributes an equal amount towards provident fund.
Payroll Analysis Sheet showed following distribution:

Direct labourRs. 70,000
Indirect labour Rs. 20,000
Salaries of marketing department Rs. 20,000
Salaries of administration department Rs. 15,000
(e) Factory overhead costs of Rs. 50,000 including depreciation of Rs. 10,000 and expired
insuranceof Rs. 5,000 for factory machinery and building were recorded.
(f) Depreciation of Rs. 10,000 on office building and furniture was recorded, out of which
Rs. 4,000 is chargeable to marketing department.

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(g) Vouchers totalling Rs. 110,000 excluding payroll voucher were paid at a discount of
2%.
(h) Factory overhead is applied to production at the rate of 100% of direct labor cost.
(h) Cost of finished output for the month totalled Rs. 200,000.
(i) Finished goods costing Rs. 180,000 were sold for Rs. 255,000. Sales of Rs. 135,000 were on
credit.
(j) One of the credit customers retuned goods costing Rs. 7,500 for which he was billed at
Rs. 12,000.
Required:Pass journal entries for the above transactions in head office books and factory
office books using two parallel columns.
Q7. "The Departmentalization of Manufacturing concern is an important aid to cost and
managerial control". Why?
Q8. Briefly explain the following.

1. Danger level
2. Volume variance
3. Conversion cost
4. Perpetual inventory system
5 . Job costing

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QUESTION NO 1
Akram Manufacturing Company

Cost of goods sold statement
For the period ended ……….
Rs. Rs.
Direct Material:
Raw material Purchases 150,000
Less: Purchases Return 2,000
148,000
Less: Raw material inventory increase by 15,500
Raw material used / Consumed / Put into process 132,500
Add: Direct Labour Cost 125,000
Prime Cost 257,500
Add: Manufacturing Overhead 75,000
Total Factory Cost 332,500
Add: Work in process Inventory Decrease by 18,900
Cost of goods manufactured 351,400
Less: Finished Goods Inventory Increase by (8,700)
Cost of goods sold 342,700
QUESTION NO 2
(a) Schedule of Equivalent Production:

Material = 1,616 ÷ 10 + (70 × 4/5) = 1,682 units
Labour = 1,616 ÷ 10 + (70 × 3/5) = 1,668 units
F.O.H = 1,616 ÷ 10 + (70 × 3/5) = 1,668 units

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(a) Cost of Production Report:

Zakir electric Industry
Department No 2
Cost of Production report
For the period ended April …………
1. Quantity Schedule: Units Units
Units received from preceding department 1,700
Units completed and transferred 1,616

Units completed but not transferred 10
Units still in process 70
Units lost in process (Normal) 4
1,700
2. Cost charged to the department:
Cost P.U. Cost
Rs. Rs.
i. Cost received from preceding dept. 4,324,800 2,544
ii. Cost added by the dept.
Material cost 3,767,680 2,240
Labour cost 420,336 252
F.O.H Cost 380,304 228
Revised per unit cost (Due to lost units) - 2,550
8,893.120 5,270
3. Cost accounted for as follows: Rs. Rs.

a. Cost of units completed & transferred
= 1,616 units × Rs. 5,270 = 8,516,320
b. Cost of units completed but not transferred:
= 10 units × Rs. 5,270 = 52,700
c. Cost of units still in process
i. Cost received from preceding dept.
= 70 units × Rs. 2,550 = 178,500
ii. Cost added by the dept.
Material Cost = 70 × 4/5 × Rs. 2,240 = 125,440
Labour cost = 70 × 3/5 × Rs. 252 = 10,584
F.O.H Cost = 70 × 3/5 × Rs. 228 = 9,576
324,100
Total cost accounted for 8,893,120

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4. Computation explanation:
i. Equivalent production:
Material = 1,682 units
Labour = 1,668 units
F.O.H = 1,668 units
ii. Per unit cost Rs.
Material cost = 3,767,680 ÷ 1,682 = 2,240
Labour cost = 420,336 ÷ 1,668 = 252
F.O.H cost = 380,304 ÷ 1,668 = 228
iii. Revised per unit cost of preceding dept.

(Due to lost units)
= 4,324,800
1,696
QUESTION NO 3
i. Economic Order Quantity:

Annual Maximum requirement = R = 48,000 units
Per Unit Cost = Rs. 4 per unit
Ordering Cost = P = Rs. 9 per order
Carrying Cost = C = 15% = 4 × = . 0.60
√ × ×
E.O.Q =
×
√ × , ×
=
.
E.O.Q = 1,200 units
ii. Number of order needs to be placed:

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No of orders =
. .
,
=
,
No of orders = 40 orders
QUESTION NO 4
i. The overhead rate per pound:
. .
Overhead rate per pound =
. ,
=
,
Overhead Rate = Rs. 0.80 per pound
ii. Spending Variance for June: Rs. Rs.

Actual F.O.H Cost 7,700
Estimated F.O.H Cost for 10,000 pounds:
Fixed F.O.H Cost = 36,000 / 12 = 3,000
+ Variable F.O.H Cost:
= 10,000 Pounds × Rs. 0.60 (w-1) = 6,000 9,000
Favorable 1,300
iii. Idle Capacity Variance for June: Rs.

Estimated F.O.H Cost for 10,000 pounds = 9,000
Applied F.O.H Cost:
= 10,000 pounds × Rs. 0.80 = 8,000
Unfavorable (1,000)

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WORKINGS:
(w-1) Variable F.O.H Rate:
. .
=
. ,
=
,
Variable F.O.H Rate = Rs. 0.60 Per Pound
QUESTION NO 5
a. Arshad:
Standard Time = 200 hours
Time Taken = 210 hours
Time saved = Nil
Basic Wage Rate = Rs. 25 per hour
Total Earnings:
Basic wages:
= Time taken × Rate per hour Rs.
= 210 hours × Rs. 25 = 5,250
+ Bonus -
Total earnings 5,250
Earning Per Hour:
. ,
=
= Rs. 25 per hours

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b. Amjad
Standard Time = 200 hours
Time taken = 160 hours
Time saved = 40 hours
Time saved in %age = × 100
= × 100
= 20%
Basic wage rate per hour = Rs. 25
Time saved in % age Time Saved in Hours Bonus rate
20% (200 × 20%) =40 hrs 10%
Total earnings: Rs.

Basic wage
= Time taken × Rate per hour
= 160 hours × Rs. 25 = 4,000
+ Bonus
= 40 hours × 25 × = 100

Earning per hour:
. ,
=
Earnings Per hour = Rs. 25.625

c. Nazar:
Standard time = 200 hours
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Time saved in % age = × 100
= × 100
= 40%
Basic wage rate = Rs. 25 per hour
20% (200 × 20%) =40 hrs 10%
20% (200 × 20%) =40 hrs 25%
40% 80 hours
Total earnings: Rs. Rs.
Basic wage
= Time taken × Basic wage rate per hour
= 120 hours × Rs. 25 = 3,000
+ Bonus
= Time saved × rate per hour × bonus rate
= 40 hours × Rs. 25 × 10% = 100
= 40 hours × Rs. 25 × 25% = 250 350
Earning per hour:
=
. ,
=
Earning per hour = Rs. 27.9167

d. Naheed:
Standard time = 200 hours
Time saved in % age = × 100
= × 100

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= 75%
Basic wage rate = Rs. 25 per hour
20% (200 × 20%) =40 hrs 10%
30% (200 × 20%) =40 hrs 25%
30% (200 × 30%) =60 hrs 50%
5% (200 × 5%) =10 hrs 30%
75% 150 hours
Total earnings: Rs. Rs.
Basic wage
= Time taken × Basic wage rate per hour
= 50 hours × Rs. 25 = 1,250
+ Bonus
= Time saved × rate per hour × bonus rate
= 40 hours × Rs. 25 × 10% = 100
= 40 hours × Rs. 25 × 25% = 250
= 60 hours × Rs. 25 × 50% = 750
= 10 hours × Rs. 25 × 30% = 75 1,175
Earning per hour:
=
. ,
=
Earning per hour = Rs. 48.50
QUESTION NO 6
General Ledger’s Journal
Head office books (General Ledger) Factory office books (Factory Ledger)
(a)(i) Factory Ledger 160,000 Store 160,000
Voucher payable 160,000 General Ledger 160,000
(Direct material and indirect material purchased and (Direct material and indirect material received
sent to factory) from head office)
(ii) Voucher payable 5,000 General Ledger 5,000
Factory Ledger 5,000 Store 5,000

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(Direct material return to supplier) (Direct material return to supplier)

(b)(i) Selling expense 5,000 WIP 120,000
Factory Ledger 5,000 FOH Control A/c 15,000
(Material supplies issues from store) General ledger 5,000
Store 140,000
(Material issued from store)
(ii) No entry Store 7,000
WIP 5,000
FOH Control 2,000
(Material returned to store)
(c) Factory Ledger 10,000 WIP 10,000
Voucher payable 10,000 General Ledger 10,000
(Direct material purchased and sent to factory) (Direct material received from head office and
sent for production)
(d)(i) Payroll 125,000
Income tax payable 5,000
Provident fund payable 12,500 No entry
Accrued payroll 107,500
(Total payroll and deduction recorded)
(ii) Accrued payroll 107,500
Voucher payable 107,500 No entry
(Accrued payroll vouched)
(iii) Voucher payable107,500
Cash A/c 107,500 No entry
(Amount of voucher paid)
(iv) Selling expense 20,000 WIP 120,000
Administrative expense 15,000 FOH Control A/c 15,000
Factory ledger 90,000 General ledger 5,000
Payroll 125,000 (Distribution of factory payroll)
(Distribution of total payroll)
(v) Selling expense 2,000 FOH Control A/c 9,000
Administrative expense 1,500 General ledger 9,000
Factory ledger 9,000 (Employer’s contribution in employee’s
Provident fund 12,500 provident fund)
(Employer’s contribution in employee’s provident
fund)
(e) Factory ledger 50,000 FOH Control A/c 50,000
Prepaid insurance 5,000 General ledger 50,000
Accumulated Dep 10,000 (Factory overhead recorded)
(Factory overhead recorded)
(f) Administrative Expenses 6,000

Selling expenses 4,000
No entry
Accumulated Dep 10,000
(Depreciation expenses recorded)
(g) Voucher payable 110,000 No entry
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Cash A/c 107,800

Discount A/c 2,200
(Voucher paid @ 2%discount)
(h) No entry WIP 70,000
FOH Applied 70,000
(FOH applied to production @ 100% of direct
labour cost)
(i) No entry Finished Goods 200,000
WIP 200,000
(Finished goods completed)
(j)(i) Cost of goods sold 180,000 General Ledger 180,000
Factory ledger 180,000 Finished goods 180,000
(Cost of goods sold recorded) (Cost of goods sold recorded)
(ii) Cash A/c 120,000
Accounts receivable 135,000
No entry
Sales 255,000
(Cash and credit sales recorded)
(k)(i) Sales return 12,000
Accounts receivable 12,000 No entry
(Credit sales return)
Factory Ledger 7,500 Finished goods 7,500
Cost of goods sold 7,500 General Ledger 7,500
(Cost of sales return recorded) (Cost of sales return recorded)

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QUESTION PAPER 2013
ALLOWED: 3 hours Max. Marks: 100

Attempt any FIVE questions from the following. All questions carry equals
Q.1 Whatare the Principles and bases for the distribution of one head expenses among
departments.
Q.2 Asad&company Limited presents to you the following facts concerning the company’s
operations for the year 2011.
Beginning inventory (at sales price) Rs. 37,500
Purchases (at cost price) Rs. 52,500
Sales (at sales price) Rs. 75,000
Ending inventory (at sales price) Rs. 50,000
Marketing expenses Rs. 16,000
Administrative expenses Rs. 6,000
REQUIRED:
An income statement for the year 2011.
Q.3 Al- Raheem Fabrics, during the month of January 2011, completed the following transaction:
(a) Materials purchased during January, 2011
Total Rs. 100,000
(b) Materials issued for use in production:
Total Rs. 85,000
(c) Defective materials returned to supplier:

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Total Rs. 6,000
(d) Unused material returned by factory to store room
Total Rs. 3,000
(e) Payroll data for the month as follows:
Salaries of marketing staff Rs. 30,000

Salaries of administration staff Rs. 20,000
Total Rs. 120,000
Deduction of provident fund @ 10% of gross earning Rs. 12,000

Net amount paid Rs.108,000
Employer also contributes an equal amount towards provident fund.

(f) Factory overhead cost incurred during the month:
Bills for utilities Rs. 12,000
Factory rent Rs.16,000
Depreciation of plant Rs. 4,000
Insurance of plant expired Rs. 2,000
Total Rs. 34,000
(g) Factory overhead is applied to production @ 50% of direct labour cost.

(h) Cost of finished output during the month Rs. 150,000.
(i) Finished goods costing Rs. 130, 000 were sold for Rs. 170,000. Sales of Rs. 70,000 were
for cash and Rs. 100,000 were on credit.
REQUIRED:
Pass entries in general journal form to record the above transaction.

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Q.4 Production of an order consisting 800 units requires direct materials of Rs. 350,000
and direct labour of Rs. 250,000. Factory overhead is applied at the rate of 80% of direct
labour cost. After completion of the order, 16 units are classified as spoiledwhich can be sold for
Rs. 4,000. Customer takes delivery of remaining 784 good unit and paid in cash the contracted
prices at the rate of Rs. 1.250 per unit. Spoiled unitsare sold and Rs. 4,000 received in cash.
REQUIRED:
(1) Journal entries, if the loss is charged to the order.
(2) Journal entries, if the loss is charged to factory overhead.

Q.5 A worker takes 9 hours to complete a job in daily wages and 6 hours on a scheme of
payment by results. His day rate is Rs. 7.50 per hour. Materials cost of the product is
Rs. 400 and overheads are recovered at 150% of total direct wages.
REQUIRED:
Calculate factory cost of the product under:
(1) Piece work plan

(2) Hasley plan
Q.6 Annual estimate factory overhead of a company for an expected volume of 180,000 pounds of a
product was as follows.
Fixed overhead Rs. 36,000
Variable overhead Rs. 108,000
REQUIRED:
(1) The overhead rate per pound.

(2) Spending variance
(3) Idle capacity variance
Q.7 Following costs were charged to 2nd Department of Muddassar Corporation during the month of
September. Cost of units received from 1st Department Rs. 364,000; materials Rs. 327,500; labour
Rs. 221,970; overhead Rs. 80,360.

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During the month 2nd department completed operations on 4,700 units and transferred these units to
3rd department, 200 units were lost during processing; the loss in considered unavoidable. At the
end of month 300 units were in process; these units were 2/3 converted. All materials are added in
2nd department at the beginning of manufacturing operations.
REQUIRED:
Cost of production report.
Q.8 Explain the followings:
(1) Conversion cost (2) Job order costing system

(3) Fixed cost (4) stock turnover
(5) Historical cost

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QUESTION NO 2
Asad & Co Limited
Income statement
For the year ended 2011
Items Rs. Rs.
Sales 75,000
Less: Cost of goods sold:
Opening inventory at cost 22,500
+ Purchases at cost 52,500

- Closing inventory at cost 30,000
45,000
Gross profit
Less: Operating expenses
Administrative expenses 6,000
22,000
Net Income 8,000

Calculation of Purchases at Sales Price:
Items Rs.
Opening inventory (at sales price) 37,500
+ Purchases (at sales price) 87,500
125,000
- Closing inventory (at sales price) 50,000
Sales (at sales price) 75,000
Calculation of % age of cost to sales price:

,
× 100 = ,
× 100 = 60% of sales
price
Rs. 22,500
Opening inventory at cost = 37,500 × 60% =
Closing inventory at cost = 50,000 × 60% = Rs. 30,000
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QUESTION NO 3

(a) Material 100,000
(Direct and indirect material purchased)
(b) Work in process 80,000
Factory overheads 5,000
Material 85,000
(Direct and indirect material issued)
(c) Voucher Payable 6,000
Material 6,000
(Material returned to supplier)
(d) Material 3,000
WIP 2,000
FOH 1,000
(Material return from factory)
(e) Payroll 120,000
Provident fund payable 12,000
Accrued payroll 108,000
(Payroll recorded)
(f) Accrued payroll 108,000
(Preparation of voucher)
(g) Voucher Payable 108,000
Bank 108,000
(Payment or voucher)
(h) WIP 60,000
FOH 10,000
Marketing expenses 30,000
Payroll 120,000
(i) FOH 7,000

Marketing expenses 3,000
(Contribution in provident fund by employer)
(j) FOH 34,000
Voucher payable 28,000
Allowances for depreciation (Plant) 4,000
Prepaid insurance 2,000
(Actual FOH recorded)
(k) WIP 30,000
FOH Applied 30,000
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(Applied FOH recorded)
(l) Finished goods 150,000
WIP 150,000
(On completion of goods)
(m) Cost of goods sold 130,000
(Goods sold recorded on cost price)
(n) Cash 70,000
Accounts Receivables 100,000
Sales 170,000
(Goods sold recorded on sales price)
(l) If the loss is charged to the order:
QUESTION NO 4

(a) WIP – Material 350,000
WIP – Labor 250,000
WIP - FOH 200,000
Material 350,000
Payroll 250,000
FOH Applied 200,000
(Initial cost recorded)
(b) Spoiled goods 4,000
(7/16 × 4,000) WIP - Material 1,750
(5/16 × 4,000) WIP - Labour 1,250
(4/16 × 4,000) WIP - FOH 1,000
(Spoiled inventory recorded)
(c) Finished goods 796,000
WIP – Material (350,000 – 1,750) 348,250
WIP – Labour (250,000 – 1,250) 248,750
WIP – FOH (200,000 – 1,000) 199,000
(On completion of goods)
(d) Cost of goods sold 796,000
(Goods sold recorded on cost price)
(e) Cash 980,000
Sales 980,000
(Goods sold recorded on sale price)
(f) Cash 4,000
Spoiled goods 4,000
(Spoiled goods sold)

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(2) If the loss is charged to the order:

(a) WIP – Material 350,000
WIP – Labor 250,000
WIP - FOH 200,000
Material 350,000
Payroll 250,000
FOH Applied 200,000
(Initial cost recorded)
(b) Spoiled goods 4,000
FOH 12,000
(7/16 × 16,000) WIP - Material 7,000
(5/16 × 16,000) WIP - Labour 5,000
(4/16 × 16,000) WIP - FOH 4,000
(c) (Spoiled inventory recorded)
WIP – Material (350,000 – 7,000) 343,000
WIP – Labour (250,000 – 5,000) 245,000
WIP – FOH (200,000 – 4,000) 196,000
(d) (On completion of goods)
(e) (Goods sold recorded on cost price)
Cash 980,000
Sales 980,000
(f) (Goods sold recorded on sale price)
Cash 4,000
Spoiled goods 4,000
(Spoiled goods sold)
QUESTION NO 5
Calculation of factory cost of the product.
1 2
Piece Work Halsey
Plan Plan
Rs. Rs.
Direct Materials 400.00 400.00
Direct labour 67.50 56.25
Overheads (150% of direct labour) 101.25 84.37
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Total factory cost 568.75 540.62
WORKING NOTES:
Calculation of direct labour cost under:
(w-1) Piece Work Plan:
The worker will get wages for 9 hours (i.e. the time allowed) irrespective of the time worked.
Direct labour cost. = Rs. 7.50 × 9 hours = Rs. 67.50
(w-2)Halsey plan:
Regular 6 hours × Rs. 7.50 Rs. 45.00
Premium (3 hours × Rs. 7.50) × 50% 11.25
Total wages Rs. 56.25
QUESTION NO 6
,
Normal capacity = = 15,000 ℎ
,
Fixed FOH cost = = . 3,000 ℎ
,
Variable FOH rate = = . 0.60
,
Applied FOH rate = Rs. 0.80 per pound

Actual FOH = Rs. 7,700
Actual capacity = 10,000 pounds
Required (1):
Applied FOH rate =
, ,
= ,
= . 0.80
Required (2):

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Spending variance:
Items Rs.
 Budgeted FOH at actual capacity
3,000 + (10,000 × 0.60) 9,000
 Actual FOH 7,700
Spending variance (Favorable) 1,300
Required (3):
Idle capacity variance:
Items Rs.
 Applied FOH at actual capacity
10,000 × 0.80 8,000
 Budgeted FOH at actual capacity 9,700
Idle capacity variance (Unfavorable) 1,000
QUESTION NO 7
Mudasser Corporation
Department 2
Cost of production report
For the month of September
Quantity Schedule:
Items Rs. Rs.
Units received 5,200
Units completed and transferred 4,700
Units in process (100% materials and 2/3 converted) 300
Units lost (Unavoidable lost) 200
5,200
Cost charged to department:
Items Rs. Rs.
Cost from previous department 364,000 70
Cost added:
Direct material 327,500 65.50
Direct labour 221,970 45.30
FOH 80,360 16.40
Adjusted cost from previous department - 72.80
Total cost to be accounted for 993,830 200

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Cost accounted for as follows:
Items Rs. Rs.
Units completed:
4,700 × 200 940,000
Units in process:
Cost from previous dept (300 × 72.60) 21,840
Cost added:
(Units in process × Completion stage × Unit cost)
Material = 300 × 100% × 65.50 19,650
Labour = 300 × 2/3 × 45.30 9,060
FOH = 300 ×2/3 × 16.40 3,280
53,800
Total cost accounted for 993,830
ADDITIONAL WORKING:
i. Equivalent production schedule (E.P.S)
= Units completed + (Units in process × Completion stage)
Material = 4,700 + (300 × 100%) = 5,000 units
Labour = 4,700 + (300 × 2/3) = 4,900 units
FOH = 4,700 + (300 × 2/3) = 4,900 units
ii. Unit cost:

= (Total cost + EPS)
= 327,500 + 5,000 = Rs. 65.50 per unit
= 221,970 + 4,900 = Rs. 45.30 per unit
= 80,360 + 4,900 = Rs. 16.40 per unit
iii. Adjusted cost per unit from previous department:
=
. , ,
=
,
,
=
,
= Rs. 72.80 per unit

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QUESTION PAPER 2014

Time allowed: 3 hours Max Marks: 100
Attempt any five questions from the following. All questions carry equal marks.
Q.1 From the following information prepare an income statement for the year ended December 31st,
2013.
Beginning inventory (at sales price) Rs. 65,000
Purchases (at cost price) Rs. 450,000
Closing inventory (at sales price) Rs. 75,000
Sales (Sale 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.
Q.2 Khubaib manufacturing company uses process cost system. Cost of department 2 for the
month of June were as under:
Cost from preceding department Rs. 20,000
Cost added:
Materials Rs. 21,816
Labour Rs. 7,776
Factory overhead Rs. 4,104 Rs. 33,696

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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, and
Balance of the units were 20% complete.
REQUIRED:
Prepare cost of production report of department 2 for June.
Q.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 material cost Rs. 25,000
Direct labour cost Rs. 50,000
Factory overhead applied was 50% of direct labour cost.
Additional cost incurred for rework on 50 units found defective were as follows:
Direct material cost Rs. 2,000
Direct labour cost Rs. 2,000
Factory overhead at applied rate.
REQUIRED:
Prepare journal entries to record completion of the order when:

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(1) Job is charged with the cost of defective work.

(2) Cost is not so charged.
Also calculate cost per unit in both of the cases.
Q.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 department 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.
Q.5 Following figures are taken from annual budget of ABC manufacturers for the year 2013:
Fixed factory overhead Rs. 400,000
Factory overhead absorption rate Rs. 70 per direct labour hour
Variable factory overhead rate Rs. 30 per direct labour hour

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Following are a few figures of actual results of the year 2013:
Capacity attained 110,000 hours
Factory overhead Rs. 8,000,000
REQUIRED:
(a) Budgeted capacity that was used to compute factory overhead absorption rate.
(b) Analysis of under or over absorbed factory overhead into volume and budget variances.
Q.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:
Hours Worked
Days
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:
(a) Normal working hours are 8.

(b) Normal rate is Rs. 80 per hour.
(c) Workers are paid at double the normal rate for overtime.
Q.7 Following transactions are related to Marium manufacturing company, Lahore. Factory is
situated at Gujrat. Total payroll cost for the month Rs. 800,000, employees’ income tax
with held Rs. 40,000 deduction for the provident fund at the rate of 10% of gross payroll,
voucher for net earnings employees was prepared and paid. Payroll analysis sheet revealed the

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following information:
Sales salaries Rs. 100,000
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 security fund contribution by the employer is 5% of gross pay.
REQUIRED:
Q.8 Prepare journal entries to record the above transactions in general office books and factory
office books.
Explain the following:
(a) Process cost method (b) Perpetual inventory system

(c) First in first out method (d) expenditure variance

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QUESTION NO 1
Income statement
For the year ended 31stDecember 2013
Rs. Rs.
Sales (at sale price) 590,000
Less: Cost of goods sold
Opening inventory 48,750
(+) Purchases 450,000
Cost of goods available for sale 498,750
(-) Ending Inventory 56,250 442,500
Gross profit 147,500
Less: Operating expenses:
Administrative expenses 17,700 29,500
Net profit 118,000
WORKINGS: Rs.
Sales at sale price 590,000
(+) Closing inventory at sale price 75,000
665,000
(-) Opening inventory at sale price 65,000
Purchases at sale price 600,000
Purchases at cost (600,000 × 75/100) 450,000
Rate of cost on sale = × 100

. ,
= × 100
. ,
= 75%

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QUESTION NO 2
Khubaib Manufacturing Co.

Department No 2
Cost of Production Report
For the month of June
Quantity Schedule:
Units received from Dept No 1. 5,000
Units still in process 1,000 5,000
Cost charged to the Dept: Total cost Unit cost
Rs. Rs.
Cost from preceding Dept. 20,000 4.00
Cost added by the Dept.
Material 21,816 5.05
Labour 7,776 1.80
FOH 4,104 0.95
Total cost to be accounted for 53,696 11.50
Cost accounted for as follows: Rs. Rs.
Units transferred out (4,000 × 11.80) 47,280
WIP Inventory from preceding dept. (1.00 × 4) 4,000
Material (320 × 5.05) 1,616
Labour (320 × 1.80) 576
FOH (320 × 0.95) 304 6,496
Total cost accounted for 53,696
Computation explain:
Equitant production:
Add: Units in process:

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= 50% × 100 × 40% = 200
= 20% × 100 × 30% = 60
= 30% × 100× 20% = 60 320
4,320
Unit cost:
21,816
Material = 4,320 = . 5.05
7,776
Labour = 320 = . 1.80
4,104
FOH = 430 = . 0.95
QUESTION NO 3
Sr # Cost of reworked charged to job Cost of rework not charged to job

(i) WIP material Rs. 25,000 WIP material Rs. 25,000
WIP labour 50,000 WIP labour 50,000
WIP FOH 25,000 WIP FOH 25,000
Material Rs.25,000 Material Rs.25,000
Labour 50,000 Labour 50,000
FOH applied 25,000 FOH applied 25,000
(ii) WIP material Rs. 2,000 FOH Control Rs. 5,000
WIP labour 2,000 Material Rs. 2,000
WIP FOH 1,000 Payroll 2,000
Material Rs. 2,000 FOH Applied 1,000
Labour 2,000
FOH applied 1,000
(iii) Finished goods Rs.105,000 Finished goods Rs.100,000
WIP material Rs. 27,000 WIP material Rs. 25,000
WIP labour 52,000 WIP labour 50,000
WIP FOH 26,000 WIP FOH 25,000
105,000 100,000
Per unit cost = = . 210 Per unit cost = 500
= . 200
500
QUESTION NO 4
A = 23,400 and B = 20,000 So

A = 23,400 + 20% B = 23,400 + 0.2B B = 30,000 + 10% A = 30,000 + 0.1A
A = 23,400 + 0.2 (30,000 + 0.1 A) B = 30,000 + 0.1(30,000) = 30,000 + 3,000
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A = 23,400 + 6,000 + 0.2A B = Rs. 33,000
A = 29,400 + 0.2A
0.98A = Rs. 29,400
A = 30,000
Distribution Summary
Production Depts. Received Depts.
X Y Z A B
Rs Rs. Rs. Rs. Rs.
Original Costs 80,000 70,000 50,000 23,400 30,000
Distribution A 6,000 12,000 9,000 (30,000) 3,000
Distribution B 13,200 6,600 6,600 6,600 (33,000)
99,200 55,600 65,600 Nil Nil
FOH absorption rate Rs. 70

Variable FOH absorption rate 30
Fixed FOH absorption rate 40
(a) Budgeted capacity =
. 4,000,000
= . 40
= 100,000 hrs
(b) Under Over Applied F.O.H

Applied FOH Rs. 8,000,000
Applied FOH (110,000 × 70) 7,700,000
Under applied FOH 300,000
Budget variance:
Actual FOH Rs. 8,000,000
Budget FOH for capacity attained fixed:
Fixed Rs. 4,000,000
Variable (110,000 × 300) 3,300,000 7,300,000
(Unfavorable) 700,000
Volume Variance:
Budgeted FOH Rs. 7,300,000
Applied FOH 7,700,000

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Volume variance (Favorable) 400,000
QUESTION NO 6
Calculation of Normal and Overtime wages
Days Abdullah Ahmad

Normal Overtime Normal Overtime
Hrs Normal Overtime Hrs Normal Overtime
wages wages wages wages
worked hrs hrs worked hrs hrs
Rs. Rs. Rs. Rs.
Mon 10 8 2 640 320 9 8 1 640 160
Tues 11 8 3 640 480 10 8 2 640 320
Wed 9 8 1 640 160 9 8 1 640 160
Thurs 8 8 - 640 - 10 8 2 640 320
Fri 9 8 1 640 160 8 8 - 640 -
Sat 8 8 - 640 - 4 4 - 320 -
3,840 1,120 3,520 900
OR
Calculation of Regular Wages & Overtime Premium
Days Abdullah Ahmad
Regular Overtime Regular Overtime
Hrs Hrs
Overtime hrs wages premium Overtime hrs wages wages
worked worked
Rs. Rs. Rs. Rs.
Mon 10 2 800 100 9 1 720 80
Tues 11 3 880 240 10 2 800 160
Wed 9 1 720 80 9 1 720 80
Thurs 8 - 640 - 10 2 800 160
Fri 9 1 720 80 8 - 640 -
Sat 8 - 640 - 4 - 320 -
4,400 560 4,000 480
Total = 4,400 + 560 = Rs. 4,960 Total = 4,000 + 480 = Rs. 4,480

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QUESTION NO 7
Journal
Sr # General office Factory office
i Payroll Rs. 800,000
Accrued payroll Rs. 680,000
Income tax payable 40,000
ii Accrued payroll Rs. 680,000
Voucher payable Rs. 680,000
Iii Voucher payable Rs. 680,000
Bank / Cash Rs. 680,000
iv Factory ledger Rs. 550,000 WIP 450,000
Selling exp control 150,000 FOH 106,000
Admexp control 100,000 General ledger 550,000
Payroll Rs. 800,000
v Factory ledger Rs. 82,500 FOH control 82,500
Selling exp control 22,500 General ledger 82,500
Admexp control 15,000
Provident fund payable Rs. 800,000
Social security fund payable 40,000

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Cost Accounting Past Papers B.

Com Part 2 2011

QUESTION PAPER 2011

Cost Accounting Paper: BC-406

Inventories at 1st July, 2010:

Required: Prepare a statement of Cost of Goods Sold.

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Fixed Overhead Rs. 36,000

Direct materials Rs. 20 per instrument

Direct labour Rs. 1,000

Setup entries in two parallel columns for the following:

(a) To record initial cost of manufacturing the order.

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Factory machinery 240,000

The following transactions were complete during October:

15% of Gross earnings for Income Tax;

Days Hours worked

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Required: Cost of production report of December 2 and 31st January, 2010.

Q.8 Define the following term:

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(ii)Spending Variance: Rs. Rs.

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Estimated F.O.H Cost for 10,000 Pounds 9,000

Applied F.O.H Cost:

= 10,000 Pounds × Rs. 0.80 = 8,000

= Variable F.O.H Rate = Rs. 0.60 Per Pound

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General Ledger’s Journal

Factory Office Book

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3. Cost accounted for as follows: Rs. Rs.

b. Cost of units still in process:

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QUESTION PAPER 2012

Subject: Cost Accounting Time Allowed: 3 hrs

Q.1 The following data is presented by the Akram Manufacturing Company:

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Payroll Analysis Sheet showed following distribution:

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Q8. Briefly explain the following.

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Akram Manufacturing Company

(a) Schedule of Equivalent Production:

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(a) Cost of Production Report:

Units completed and transferred 1,616

3. Cost accounted for as follows: Rs. Rs.

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iii. Revised per unit cost of preceding dept.

i. Economic Order Quantity:

Carrying Cost = C = 15% = 4 × = . 0.60

E.O.Q = 1,200 units

ii. Number of order needs to be placed:

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i. The overhead rate per pound:

Overhead Rate = Rs. 0.80 per pound

ii. Spending Variance for June: Rs. Rs.

iii. Idle Capacity Variance for June: Rs.

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