B.

com Part-2 (Paper 1)

Cost ACCOUNTING 4 HOURS
Qasim Khokhar Max Marks: 200
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Qno.1 Luqman Auto Part company has Provides you the following data for the month of June____

Inventories June 1 June 30

Material RS. 55000 RS. 50000
Work-in-Process--- Material RS. 75000 RS. 70000
Work-in-Process--- Labour RS. 45000 RS. 37600
Work-in-Process--- Factory overhead RS. 33600 RS. 29500
Finish Goods Rs. 120000 Rs. 135000
Manufacturing Cost for the Month are as follow:
Direct Material Used Rs. 595000
Direct Labour:
Assembling Department @ Rs. 60 per hour Rs. 249600
Finishing Department @ Rs. 80 per hour Rs. 168000
Factory Overhead is applied according to following rated:
Assembling Department @ Rs. 30 per hour
Finishing Department @ Rs. 50 per hour
Required: (a) Prepare Cost of goods manufacture and sold statement for the month.
(b) Calculate unit cost of material, labour and Factory overhead for the production of the

June assuming that 12000 units were produced during the month.
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Qno.2 Saqib Manufacture Company produced a single product and uses process costing. The cost
incurred by the Blending Department during the month of May 2010 was as follow:
Direct Material Cost Rs. 70000
Direct Labour Cost Rs. 48000
Factory Overhead Rs. 33000
Unit Received from previous Department Rs. 15000@ 10.5 each
Unit Completed and Transferred Rs. 19000
Increase number of unit @80%
Units still in process Rs. 6000
Unit loss Rs. 2000
Unit in Process were 50% Complete as to Labour and 25% as to FOH. All Material were put in process
at the beginning of the process.
Prepare Cost of production Report.

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Qno.3 Up to first 20% saving in time
10% of the corresponding saving in time.
For and within next 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

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Qno.4 On May 31, 200F A fire broken out in Factory Premises of al Basheer Industry.
After the fire Physical inventory were taken. Raw material were valued at Rs. 33000, Finish Goods at
50000 and supplies at Rs 5000.
Inventory on January 1, 200F consisted of:
Raw Material Rs. 20000
Work in process 40000
Finish goods 60000
Supplies 2000
The financial statement reveals following figures of Sales and Gross Profit for the last five years:
Sales Gross Profit
200A Rs. 650000 Rs. 220000
200B 700000 230000
200C 750000 250000
200D 800000 270000
200E 850000 280000
Sales for the five months of 200F were Rs. 450000. Raw Material purchases were Rs 175000. Freight
on purchases was Rs. 7000. Direct labout for the five months was Rs. 80000. Factory overhead for
the five months was 60% of Direct labour.
Required: Calculate the word in process inventory lose by fire.
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Qno.5 During the year 2012 Ali & Co. produced 750000 units. At this activity level, Factory overhead
cost were Rs. 1100000.
Before the year 2012 accountant of the company estimated annual activity level as 850000 units
and factory overhead as Rs. 1275000. Thus Factory overhead applied rate was 1.50 Rs per unit. 60%
of the applied rate was taken as variable rate.
Required:
1- Budgeted Fixed Factory overhead. 2- Under or over applied Factory overhead.
3- Volume Variance 4- Budgeted Variance
 Qno.6 Luqman and company has fire on March 31, 20B. Following Data for the month were as
follow:
Prime Cost 60% of Cost of good manufacture
Gross Profit 40% of net sales
Factory Overhead 2/3 of Conversion Cost
Cost of Good available for sale Rs. 672000
Direct Material Purchased Rs. 224400
Work in process inventory on 31 Dec 20A Rs. 24000
Material inventory on 31 Dec 20A Rs. 42000
Finish goods inventory on 31 Dec 20A Rs. 48000
Sales Rs. 1020000
Direct labour Rs. 158400
Required: Calculate
(A) Finish good inventory lose by fire.
(B) Work in Process inventory lose by fire.
(C) Raw Material inventory lose by fire.
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Qno7: Consumption forecast of a particular material is given hereunder.
Maximum Daily Consumption 600 units
Average Daily Consumption 500 units
Minumum Daily Consumption 400 units
Lead Time 4 to 8 Days
Time to get emergency supplies 3 Days
Economic order Quantity 5000 units
Required: (a) Order Level (b) Minumum level (c) Maximum level (d) Danger Level
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Qno8: The Assistant Controller Provides you the following data:
Net Income before tax for the year Rs. 1200000.
Rate of return(income) 10% of sales.
Gross Profit are 40% of sales.
Rate of Marketing Expenses 15% of sales.
5% Bonds payable represent 37.5% of total liabilities Rs. Two Million.
Required: An income statement for the year based on the above information.
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Qno9: Abdullah and Ahmed are two workers in a department of a manufacturing concern. During
each day of the previous week they worked as follow:
Days Hours Worked
Abdullah Ahmed
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 Ahmed 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.
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Qno10: following figures are taken from annual budget of Meena Manufacture for the year 2012:
Factory Overhead absorption rate Rs. 70 per direct labour hour
Fixed factory overhead Rs. 4000000
Variable Factory overhead rate Rs. 30 per direct labour hour
Following are the few figures of actual result of year 2012:
Capacity attained 110000 hours
Factory overhead Rs. 8000000
Required: (a) Budgeted capacity that was used to compute factory overhead absorption rate.
(b) Analysis of under of overabsorbed factory overhead into volume and budgeted variance.
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Qno11: A job order calling for 50 motors is sent through the factory. Cost element per motor are:
Material Rs. 110
Labour Rs. 175
Predetermined Factory overhead Rs. 125
After the motors had been manufactured, final inspection discovered that 2 motors were spoiled and
would have to be sold as second at a price of Rs. 100 each, whereas, one motor was defective which
would require Rs. 50 of additional materials and Rs. 50 and Rs. 25 additional labour and factory overhead.
Required: Prepare Journal entries
(1) When the loss is charged to specific job.
(2) When the loss is not charged.
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Qno12: Ahmad Electrical Industry Produces U.P.S assembling the last producing department during April
received 30000 units from proceeding department at a cost of 92229. During the month a total of
25000 units were Completed and transferred. At the end of the month 1000 units were on hand. 3000 in
process units were in process 2/3 as to labour and factory overhed. Direct labour Rs 7504 and Factory
overhead Rs. 3500 were charged to the department during April. Their was no work in process beginning
inventory.
Prepare Cost of production Report.
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