Paper: Spring 2007

Question: 02

Req: 01:- Total Manufacturing Costs

= Direct Material + Direct Labour + Factory Overheads
= {Open. Inv. Mat. + Purchased Mat. - Cl. Inv. Mat.} + Direct Labour + FOH
= {15000 + 46500 - 19200} + {(6125*7.80)+(9875*8.40)} + {(6125*5.00)+(9875*4.20)}
= 42300 + (47775+82950) + (30625+41475)
= 42300 + 130725 + 72100
= 245125

Req: 02:- Cost of Goods Manufactured

= Total Manufacturing Cost + Work in Process.Open. Inv. - Work in Process. Cl. Inv.
= 245125 + 17300 - 19425
= 243000

Req: 03:- Cost of Goods Sold

= Cost of Goods Manufactured + Finished Goods.Open. Inv. - Finished Goods.Cl. Inv.
= 243000+11300 - 9400
= 244900

Paper: Spring 2007

Question: 03

Req:1 :- The Amount of Total Material Available for sale

= Opening Inv. + Purchases
= (200 * 2) + (220 * 2.4)
= 400 + 528
= 928
Note: For Calculating this req, you should calculate purchases first.

Purchased Units = Sale + Closing Inv. - Opening Inv.

= 180 + 240 - 200
= 220 units

Req:2:- Income Statement showing after Tax earning

LIFO FIFO
Sale 648 648
Less: Cost of Goods Sold
Opening Inv. 400 400
Add: Purchases 528 528
928 928
Less: Closing Inv. 488 440 568 360
Net Income before Tax 208 288
Less: Income Tax @ 50% 104 144
Net Income after Tax 104 144

Req:3:- Cost assigned to ending inventory

LIFO FIFO

Closing Inventory: 488 568

Req:4:- Comparison of the result of both the companies

Among these two companies, the company which uses the LIFO Method its
incurred cost is higher than the
other company and its Gross proit or Net Profit is less then other company
and this company also get the
benefit of Tax bracket, because it will pay tax less than other company.
Paper: Spring 2007
Question: 04

Jabir Company
Income Statement
For the yead ending 31st December, 19A

Sale Rs. 810000

Less: Cost of Goods Sold: (W-1) 405000
Gross Profit 405000
Less: Operating Expenses 124000
Net Operating Income Rs. 281000

W-1
Jabir Company
Cost of Goods Sold
For the yead ending 31st December, 19A

Direct Material 175000

Direct Labour 125000
Factory Overheads 150000
Cost of Goods available for sal 450000
Less: Finished Goods-Closing Stock 45000
Cost of Goods Sold 405000

Paper: Spring 2007

Question: 05
 Nadeem Furniture
Cash Budget
for the month of Sep & Oct

Particulars Sep Oct

Rs. 13000 Rs. -8750
Opening Balance
Receitps:
Cash Sales 40000 60000
Received from Debtors W-1 96750 136750 90500 150500
149750 141750
Payments:
Cash Purchases 20000 20000
Payment to Creditors W-2 92000 80000
Cash Operating Expenses 46500 158500 10000 110000
Closing Balance Rs. -8750 Rs. 31750

W-1 Account Receivables Receipts

Sep Oct
Receipts for the month of Sep 38750 31000
Oct 47500
July 10000
Aug 48000 12000

Total Received from Debtors 96750 90500

W-2 Accounts Paybles

Sep Oct Sep Oct
Cash Payments 92000 80000 Opening Bal. 10000 12000
Discount 6000 3000 Purchases 100000 80000
Closing Bal. 12000 9000

110000 92000 110000 92000

Paper: Spring 2007
Question: 06
Rs. 3 per machine
Applied Rate hour
Rs.
Estimated Variable Overheads 200000
210000 machine
Actual Production hours
Actual Overheads Rs. 6310000
Rs.
Estimated Fixed Overheads 400000
Rs.
Total Estimated Overheads 600000

Spending Variance/Budgeted Variance / Expenditure Variance

Estimated Overheads (At Actual) W-1 Rs. 6100000
Actual Overheads 6310000
Unfavourable Variance Rs. 210000

W-1 Estimated Overheads (At Actual)

= Fixed Overheads + Variable Overheads at actual
= 400000 + (200000 * 210000/200000)
= 400000 + 210000
= 610000

Idle Capacity / Capacity / Volume Variance

 Applied Overheads W-2 Rs. 630000
Estimated Overheads (At Actual) W-1 610000
Favourable Variance Rs. 20000

W-2 Applied Overheads

= Actual Production * Applied Rate
= 210000 * 3
= 630000

Paper: Spring 2007

Question: 07

Req: 1 :- Journal Entries for Specific Order

1- To record the initial production
Debit Credit
Work in Process 8375
Material 4000
Payroll 1750
Factory Overheads Applied 2625

2- To record reworking cost

Work in Process 71.25

Material 15
Payroll 22.5
Factory Overheads Applied 33.75

3-To record completion

Finished Goods 8446.25
Work in Process 8446.25

Req: 2:- Journal Entries for Customer

1- To record the initial production
Debit Credit
Work in Process 8550
Material 4000
Payroll 1750
Factory Overheads Applied 2800

2- To record reworking cost

Factory Overhead 73.5

Material 15
Payroll 22.5
Factory Overheads Applied 36

3-To record completion

Finished Goods 8623.5

Work in Process 8623.5

Paper: Spring 2006

Question: 04
 ____
Assembly Department
Cost of Production Report
For the month of February

QUANTITY SCHEDULE:
Units Received In 60000
Units Completed & Transferred out 50000
Units Still in Process 9000
Units Lost in Process (Abnormal Loss) 1000 60000

COST CHARGED TO DEPTT.:- T.C U.C

Rs. Rs.
Cost from Pre. Deptt. 212400 3.54
Cost added by this Deptt.
Direct Material 41650 0.70
Direct Labour 101700 1.80
Factory Overheads 56500 1.00
Total Cost added by this deptt. 199850 3.50
Total Cost to be accounted for 412250 7.04

COST ACCOUNTED FOR AS FOLLOWS:- Rs.

Cost Transferred out 352000
Work in Process- Closing Inventory:-
Cost from Pre. Deptt. 31860
Direct Material 6300
Direct Labour 10800
Factory Overheads 6000 54960

Treatment for Lost Units:-

Cost from Pre. Deptt. 3540
Direct Material 350
Direct Labour 900
Factory Overheads 500 5290
Total Cost Accounted for Rs. 412250
ADDITIONAL CALCULATIONS:

EPU 'S
Material = Units Completed + (Units Still in Process * Completion Stage) + (Units Lost in Process * Completion Stage)
= 50000 + (9000*100%) + (1000*50%)
= 50000 + 9000 + 500
= 59500 Units

Labour & FOH = Units Completed + (Units Still in Process * Completion Stage) + (Units Lost in Process * Completion Stage)
= 50000 + (9000*2/3) + (1000*50%)
= 50000 + 6000 + 500
= 56500 Units

Per Unit Cost

Per Unit Cost = Cost / EPU's Units
Material = Rs. 41650 / 59500 Units = Rs. 0.7 per unit
Labour = Rs. 101700 / 56500 Units = Rs. 1.8 per unit
FOH = Rs. 56500 / 56500 Units = Rs. 1.0 per unit
 

Paper: Spring 2006

Question: 05

( A ) Cost of the Inventory

(1) FIFO Method

Received / Purchase Issued / Sale Balance

Qty. P.U Rs. Qty. P.U Rs. Qty. P.U Rs.
Opening
Inventory 100 4 400
Purchase 150 4.25 637.5 100 4 400
150 4.25 637.5
Purchase 108 5 540 100 4 400
150 4.25 637.5
108 5 540
Purchase 200 5.5 1100 100 4 400
150 4.25 637.5
108 5 540
200 5.5 1100
Issued 100 4 400 0 4 0
150 4.25 637.5 0 4.25 0
108 5 540 0 5 0
10 5.5 55 190 5.5 1045
CLOSING INVENTORY 190 5.5 1045
 

(2) LIFO Method

Received / Purchase Issued / Sale Balance

Qty. P.U Rs. Qty. P.U Rs. Qty. P.U Rs.
Opening
Inventory 100 4 400
Purchase 150 4.25 637.5 100 4 400
150 4.25 637.5
Purchase 108 5 540 100 4 400
150 4.25 637.5
108 5 540
Purchase 200 5.5 1100 100 4 400
150 4.25 637.5
108 5 540
200 5.5 1100
Issued 100 4 400
60 4.25 255 90 4.25 382.5
108 5 540 0 5 0
200 5.5 1100 0 5.5 0
100 4 400
90 4.25 382.5
CLOSING INVENTORY 190 - 782.5
 

(3) WEIGHTED AVERAGE Method

Received / Purchase Issued / Sale Balance

Qty. P.U Rs. Qty. P.U Rs. Qty. P.U Rs.
Opening
Inventory 100 4 400
Purchase 150 4.25 637.5 250 4.15 1037.5
Purchase 108 5 540 358 4.41 1577.5
Purchase 200 5.5 1100 558 4.80 2677.5
Issued 368 4.8 1766.4 190 4.80 911.1
CLOSING INVENTORY 190 - 911

( B ) Cost of goods sold

(1) (2) (3)
FIFO LIFO Avg.
Opening Inventory 400 400 400
Add: Purchases 2277.5 2277.5 2277.5
2677.5 2677.5 2677.5
Less: Closing Inventory 1045 782.5 911
Cost of Goods Sold 1632.5 1895 1766.5

Paper: Spring 2006

Question: 07
Cost of Mateial 18000
Direct Labour 29000
FOH Applied
Molding Deptt. 3204
 Decorating Deptt. 15950 19154
Req:1 Total Manufacturing Cost 66154
Add: Mark up 44323
Req: 2 Bid Price 110477

Paper: Spring 2005

Question: 04

____
Assembly Department
Cost of Production Report
For the month of February

QUANTITY SCHEDULE:
Units Received In 60000
Units Completed & Transferred out 50000
Units Still in Process 9000
Units Lost in Process (Abnormal Loss) 1000 60000

COST CHARGED TO DEPTT.:- T.C U.C

Rs. Rs.
Cost from Pre. Deptt. 212400 3.54
Cost added by this Deptt.
Direct Material 41650 0.70
Direct Labour 101700 1.80
Factory Overheads 56500 1.00
Total Cost added by this deptt. 199850 3.50
Total Cost to be accounted for 412250 7.04

COST ACCOUNTED FOR AS FOLLOWS:- Rs.

Cost Transferred out 352000
Work in Process- Closing Inventory:-
 Cost from Pre. Deptt. 31860
Direct Material 6300
Direct Labour 10800
Factory Overheads 6000 54960

Treatment for Lost Units:-

Cost from Pre. Deptt. 3540
Direct Material 350
Direct Labour 900
Factory Overheads 500 5290
Total Cost Accounted for Rs. 412250

ADDITIONAL CALCULATIONS:

EPU 'S
Material = Units Completed + (Units Still in Process * Completion Stage) + (Units Lost in Process * Completion Stage)
= 50000 + (9000*100%) + (1000*50%)
= 50000 + 9000 + 500
= 59500 Units

Labour & FOH = Units Completed + (Units Still in Process * Completion Stage) + (Units Lost in Process * Completion Stage)
= 50000 + (9000*2/3) + (1000*50%)
= 50000 + 6000 + 500
= 56500 Units

Per Unit Cost

Per Unit Cost = Cost / EPU's Units
Material = Rs. 41650 / 59500 Units = Rs. 0.7 per unit
Labour = Rs. 101700 / 56500 Units = Rs. 1.8 per unit
FOH = Rs. 56500 / 56500 Units = Rs. 1.0 per unit
Paper: Spring 2005
Question: 05

( A ) Cost of the Inventory

(1) FIFO Method

Received / Purchase Issued / Sale Balance

Qty. P.U Rs. Qty. P.U Rs. Qty. P.U Rs.
Opening
Inventory 100 4 400
Purchase 150 4.25 637.5 100 4 400
150 4.25 637.5
Purchase 108 5 540 100 4 400
150 4.25 637.5
108 5 540
Purchase 200 5.5 1100 100 4 400
150 4.25 637.5
108 5 540
200 5.5 1100
Issued 100 4 400 0 4 0
150 4.25 637.5 0 4.25 0
108 5 540 0 5 0
10 5.5 55 190 5.5 1045
CLOSING INVENTORY 190 5.5 1045
 

(2) LIFO Method

Received / Purchase Issued / Sale Balance

Qty. P.U Rs. Qty. P.U Rs. Qty. P.U Rs.
Opening
Inventory 100 4 400
Purchase 150 4.25 637.5 100 4 400
150 4.25 637.5
Purchase 108 5 540 100 4 400
150 4.25 637.5
108 5 540
Purchase 200 5.5 1100 100 4 400
150 4.25 637.5
108 5 540
200 5.5 1100
Issued 100 4 400
60 4.25 255 90 4.25 382.5
108 5 540 0 5 0
200 5.5 1100 0 5.5 0
100 4 400
90 4.25 382.5
CLOSING INVENTORY 190 - 782.5
 

(3) WEIGHTED AVERAGE Method

Received / Purchase Issued / Sale Balance

Qty. P.U Rs. Qty. P.U Rs. Qty. P.U Rs.
Opening
Inventory 100 4 400
Purchase 150 4.25 637.5 250 4.15 1037.5
Purchase 108 5 540 358 4.41 1577.5
Purchase 200 5.5 1100 558 4.80 2677.5
Issued 368 4.8 1766.4 190 4.80 911.1
CLOSING INVENTORY 190 - 911

( B ) Cost of goods sold

(1) (2) (3)
FIFO LIFO Avg.
Opening Inventory 400 400 400
Add: Purchases 2277.5 2277.5 2277.5
2677.5 2677.5 2677.5
Less: Closing Inventory 1045 782.5 911
Cost of Goods Sold 1632.5 1895 1766.5

Paper: Spring 2005

Question: 07
Cost of Mateial 18000
Direct Labour 29000
FOH Applied
Molding Deptt. 3204
 Decorating Deptt. 15950 19154
Req:1 Total Manufacturing Cost 66154
Add: Mark up 44323
Req: 2 Bid Price 110477

Paper: Spring 2008

Question: 7
5000 Units 4000 Units 6000 Units
Fixed Variable Total Fixed Variable Total Fixed Variable Total
Cost Cost Cost Cost Cost Cost Cost Cost Cost
Particulars Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.
Material Cost 25000 25000 0 20000 20000 0 30000 30000
Labour Cost 15000 15000 0 12000 12000 0 18000 18000
Power 500 750 1250 500 600 1100 500 900 1400
Repairs &
Maintenance 500 1500 2000 500 1200 1700 500 1800 2300
Stores 1000 1000 0 800 800 0 1200 1200
Inspection 300 200 500 300 160 460 300 240 540
Depreciation 10000 10000 0 8000 8000 0 12000 12000
Admin. Overhead 3000 2000 5000 3000 1600 4600 3000 2400 5400
Selling Overhead 1800 1200 3000 1800 960 2760 1800 1440 3240

Total 6100 56650 62750 6100 45320 51420 6100 67980 74080

* Per Unit Cost for 4000 Units

Total Cost 51420

= = = Rs. 12.855 per Unit
Total Units 4000
 

* Per Unit Cost for 6000 Units

Total Cost 74080

= = = Rs. 12.35 per Unit
Total Units 6000

Paper: Autumn 2007

Question: 4
_____
Department 2
Cost of Production Report
For the month of July, _ _ _
QUANTITY SCHEDULE:
Units Received from Pre. Deptt. 50,000
Units Completed and Transferred out 30,000
Units Completed and In Hand 5,000
Units Still in Process 10,000
Units Lost in Process 5,000 50,000

COST CHARGED TO DEPTT.: T.C U.C

Rs. Rs.
Cost from Pre. Deptt. (50000*9) 450,000 9.00000
Cost added by this Deptt.:
Direct Material 39,600 0.98753
Direct Labour 237,600 5.92519
Factory Overhead 158,400 3.95012
Total Cost added by this deptt. 435,600 10.86284
Adjusted cost for lost units - 1.00000
435,600 11.86284
Total Cost to be Accounted for 885,600 20.86284
COST ACCOUNTED FOR AS FOLLOWS: Rs. Rs.
Cost Transferred out (30000*20.862838) 625,885.29
Finished Goods-Closing Inventory (5000*20.862838) 104,314.21
Work in Process-Closing Inventory:-
Adjustment from Pre. Deptt. (10000*10) 100000.00
Direct Material 5036.41
Direct Labour 30218.45
Factory Overhead 20145.64 155,400.50
Total Cost Accounted For Rs. 885,600.00

Additional Calculation:
Equivalent Production Units (EPU):
Direct Material, Direct Labour and FOH:
= Units Completed+(Units in Process*Completion Stage)
= 35000 units+{(10000*50%*50%)+(10000*30%*60%)+(10000*20%*40%)}
= 35000+(2500+1800+800)
= 35000+5100
= 40100 Units

Per Unit Cost:

Direct Material = Rs.39600 / 40100 Units = Rs. 0.98753 per Unit

Direct Labour = Rs. 237600 / 40100 Units = Rs. 5.92519 per Unit
Factory Overheads = Rs. 158400 / 40100 Units = Rs. 3.95012 per Unit

Adjusted Cost for Lost Units:

= (Total Cost from Pre. Deptt. / Good Units) - Per Unit Cost from Pre. Deptt.

= (450000 / 45000) - 9.00

= 10 - 9
= Rs .1

Work in Process-Closing Inventory:

= (Units in Process*Completion Stage) * Per Unit Cost
 Direct Material = (10000*5100/10000) * 0.98753 = Rs. 5036.4081
Direct Labour = (10000*5100/10000) * 5.92519 = Rs. 30218.4537
Factory Overheads
= (10000*5100/10000) * 3.95012 = Rs. 20145.612

Paper: Autumn 2007

Question: 7
Note : In this question, the data given is in Annual Basis and some data on Monthly,
but the Actual data based on Month.
So, we calculate all requirements on Monthly basis.

Monthly Estimated Production = 180000 / 12 = 15000 Units

Monthly Fixed Estimated Overheads = 36000 / 12 = Rs. 3000
Monthly Variable Estimated Overheads = 108000 / 12 = Rs. 9000
Monthly Total Estimated Overheads = 3000+9000 = Rs. 12000
Monthly Actual Production = 10000 Units
Rs.
Monthly Actual Overheads = 7700

So,

Req. 1 Overhead applied rate per unit

= Estimated Overheads / Estimated Production

= (3000+9000) / 15000
= 12000 / 15000
= Rs, 0.8 Per Pound

Req. 1 Budgeted Variance

Estimated Overheads (At. Actual) W-1 Rs. 9000

Actual Ovrheads W-2 7700
Favourable Variance Rs. 1300
 Req. 1 Idle Capacity / Volume Variance

Applied Overheads Rs. 8000

Estimated Overheads (At. Actual) W-1 9000
Unfavourable Variance Rs. 1000

Working

W-1 Estimated Overheads (At Actual)

= Est. Fixed Overheads+ Est. Variable Overheads*
= 3000 + (9000 * 10000/15000)
= 3000 + 6000
= Rs. 9000

*Note: Est. Variable Overheads are given on Est. basis but we calculate it on actual
basis that why we multiply with actual and divide by est.

W-2 Applied Overheads

= Actual Production * Applied Overhead Rate

= 10000 * 0.8
= Rs. 8000