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    Cost Accounting and Control AC210 Paper

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    angelbert mazenda
    Catholic University Zimbabwe

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    Cost Accounting and Control AC210 Paper

    Uploaded by

    angelbert mazenda
    0 views5 pages
    Catholic University Zimbabwe

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    Cost Accounting and Control AC210 paper

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    Catholic University Zimbabwe

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    0 views5 pages

    Cost Accounting and Control AC210 Paper

    Uploaded by

    angelbert mazenda
    Catholic University Zimbabwe

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 5

    CATHOLIC UNIVERSITY OF ZIMBABWE

    FACULTY OF COMMERCE, INNOVATION AND TECHNOLOGY


    BACHELOR OF ACCOUNTING (HONORS) DEGREE
    COST ACCOUNTING AND CONTROL 1

    DATE: DECEMBER 2023 TIME: 3 HOURS

    INSTRUCTIONS TO CANDIDATES
    1. Answer ALL 4 (four) questions
    2. Each question carries 25 Marks
    3. The marks for each question are indicated in square [] brackets.
    QUESTION ONE (25 MARKS)

    a. Explain whether you agree with each of the following statements:


    (i) ‘All direct costs are variable’.
    (ii) ‘Variable costs are controllable and fixed costs are not’.
    (iii) ‘Sunk costs are irrelevant when providing decision making information’. [9
    marks]
    b. Describe the role of the cost accountant in a manufacturing organization. [10
    marks]
    c. Distinguish between, and provide an illustration of:
    (i) ‘avoidable’ and ‘unavoidable’ costs;
    (ii) ‘cost reduction and cost control. [6 marks]

    QUESTION TWO (25 MARKS)

    The annual overhead costs for the Enterprise Company which has three production centres (two
    machine centres and one assembly centre) and two service centres (materials procurement and general
    factory support) are as follows:
    ($) ($)
    Indirect wages and supervision
    Machine centres: X 1 000 000
    Y 1 000 000
    Assembly 1 500 000
    Materials procurement 1 100 000
    General factory support 1 480 000 6 080 000
    Indirect materials
    Machine centres: X 500 000
    Y 805 000
    Assembly 105 000
    Materials procurement 0
    General factory support 10 000 1 420 000
    Lighting and heating 500 000
    Property taxes 1 000 000
    Insurance of machinery 150 000
    Depreciation of machinery 1 500 000
    Insurance of buildings 250 000
    Salaries of works management 800 000 4 200 000
    11 700 000

    The following information is also available:


    Book Value Area occupied Number of Direct Labour Machine
    of machinery (sq. meters) employees hours hours
    ($)
    Machine 10 000 300 1 000 000 2 000 000
    shop: X 8 000 000

    Machine 5 000 000 5 000 200 1 000 000 1 000 000


    shop: Y
    Assembly 1 000 000 15 000 300 2 000 000
    Stores 500 000 15 000 100
    Maintenance 500 000 5 000 100
    Total 15 000 000 50 000 1 000

    Details of total materials issues (i.e. direct and indirect materials) to the production centres
    are as follows:

    Machine shop X 4 000 000

    Machine shop Y 3 000 000

    Assembly 1 000 000

    8 000 000

    Required:

    a. Prepare an overhead analysis sheet [20]


    b. Comment on whether reapportioning service cost centre costs is generally worthwhile
    and suggest an alternative treatment for such costs. [5]

    QUESTION THREE (25 MARKS)

    a. Describe the first in, first out and average cost methods of stores pricing as well as
    their advantages and disadvantages [8]
    b. Zee World Ltd had the following transactions in one of its raw materials during April.
    Opening stock 40 units @$10 each
    April 4 Bought 140 units @$11 each
    10 Used 90 units
    12 Bought 60 units @£12 each
    13 Used 100 units
    16 Bought 200 units @£10 each
    21 Used 70 units
    23 Used 80 units
    26 Bought 50 units @£12 each
    29 Used 60 units

    Required:
    i. (a) write up the stores ledger card using
    (i) FIFO and [8 marks]
    ii. state the cost of material used for each system during April [2 marks]
    c. Describe briefly three major differences between:
    (i) financial accounting, and
    (ii) cost and management accounting. [7 marks]
    QUESTION FOUR (25 MARKS)
    MC Ltd manufactures and sells a single product. Cost and revenue details of the product are
    as follows:
    $
    Per unit:
    Sales price 20
    Variable cost of production 6
    Per month:
    Fixed production overhead 5,000
    Fixed selling and administration overhead 3,000
    It is MC's policy to maintain a constant production output at the normal capacity of 1,000
    units per month, despite fluctuations in monthly sales levels. Sales achieved for the months
    of January to April were as follows:
    Units
    January 400
    February 500
    March 1,400
    April 1,700

    You are asked to prepare profit statements for January to April, using:
    (a) marginal costing; [10]
    (b) absorption costing. [15]

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