MY today's mgt402
Subjective papers. 5 Questions
Q1: (3 Marks)
During the month of
August 2009, 25,675 units were completed and transferred to next department.
1,000 units were lost during the process and 5,000 units were still in process
(100% material, 60% labour & FOH).
Required:
Prepare Quantity
schedule with the help of given data for Department 1.
Ans of Q1:
BWIP + Unites Started =
EWIP + Completed + Losses
0 + 31675 = 5000 + 25675
+ 1000
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Material
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Conversion
Cost
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Unites
Completed
|
25675
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25675
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Ending
Work In Progress
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5000
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(5000*.6)
= 3000
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Loss
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1000
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1000
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Q5:(5 marks)
Sufyan & Sons’
Overhead Budget for the month together with data relating to cost centers is as
follow:
Overhead
Cost
Rs.
Electricity
Consumption
2,600.00
Rent Of
factory
142
Depreciation Of
machinery 6,500.00
Machine
Groups
Bases for Apportionment.
Q
R
S
T TOTAL
Kilowatt
Hours
2,505.00
2,203.00 44,500.00
5,500.00 54,708.00
Floor Space(Sq Ft)
998.00
890.00
560 650 3,098.00
Capital Cost Of
plant
2,350.00
1,550.00
6,500.00 12,000.00
22,400.00
Required: Apportion each
of the cost given to the four groups of machine on suitable bases.
Q2:(3 Marks)
Blanket rate is used as
a single rate throughout the production activity which is not always feasible
for evaluating the performance of each department separately. You are required
to suggest the rate that is used in this situation. Elaborate the concept.
Ans of Q2:
Blanket overhead
application is based on one type of activity for example, direct labor hours.
All type of overheads are allocated based on the same rate. This leads to an
unreasonable application of overheads on production unites. Specially when more
than one product is being used. Alternative approach is to accumulating
different cost in different cost pools and allocating them using appropriate
cost drivers as the basis.
Example:
Number of runs made by a
driver from store to production dep. Could be an appropriate base to allocate
material handling cost.
Q4:(5 Marks)
Patacake Ltd. produces a
certain food item in a manufacturing process. On 1st November, there was no
opening stock in process. During November, 500 units of material were put in to
process, with a cost of Rs. 9,000. Units completed and
transferred-out were 400 units. Direct labor cost in November was
Rs. 3,840. Production overhead is absorbed at 200% of direct
labor costs. Closing stock on 30th November consisted of 100
units which were 100% completed as to materials and 80% completed as
to labor and overhead.
Required:
Prepare the Quantity
Schedule.
Calculate the Equivalent
production units for material, labor and FOH for the month of November.
Ans of Q4:
Quantity Schedule:
BWIP + Unites Started =
EWIP + Unites completed
0 + 500 = 100 + 400
Cost Schedule:
Material
D.Labour
FOH
This
Period
9000
3840
7680
Equivalent Unites of
Production:
Material
D. Labor
FOH
Unites
completed
400
400
400
EWIP
100
80
80
Total
500
480
480
Q3: (Marks 3)
Cost of material
consumed under FIFO method is Rs. 4,200. Conversion cost is Rs.
15,000. 1,200 units of the product were manufactured out of which 900
units were sold at Rs. 25 each. There were no beginning and ending
inventories of work in process and finished goods.
Required: Calculate Net
profit under FIFO method. (Show necessary working)
(Ans of Q3)
Conversion Cost = 15000
Material = 4200
Total Factory cost =
19200
Unites manufactured =
1200
Per Unit Cost = 19200 /
1200
Per unit cost = 16
Contribution = 25 – 16 =
9 * 900
Net Profit = 8100
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