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14 views3 pages

Mid-FA23-Cost

Uploaded by

fa23-baf-063
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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COMSATS University Islamabad, Lahore Campus

Mid Term Exam– Semester Fall 2022


Course Credit
Course Title: Cost & Management Accounting ACC 201 3(3,
Code: Hours:
0)
Programme
Course Instructor/s: Dr. Amad Rashid, Sadia Umar BBA, BAF
Name:
3r Batc
Semester: FA22 Section: A,B,C Date: Nov. 2, 2023
d h:
Time Allowed: 90 Min Maximum Marks: 25
Reg.
Student’s Name:
No.
Important Instructions / Guidelines:
Solve all questions on the answer booklet provided. Read the questions carefully before answering and show
complete working for the numerical questions.

Question 1:

The United Auto Ltd. is an Auto-Parts trading company. Following is the information regarding its activities
during the month of December 2021 for a certain unit:
Dec. 01: Beginning inventory; 700 units @ $10 each.
Dec. 02: Sold 560 units @ $16 each.
Dec. 12: Purchased 200 units @ $10 each.
Dec. 18: Sold 140 units @ $18.5 each.
Dec. 22: Purchased 320 units @ $10 each.
Dec. 29: Sold 200 units @ $18.5 each.
At the end of December, there were 280 units on hand according to a physical count of inventory.

Required:
Prepare journal entries and compute gross profit assuming the company uses a perpetual inventory system.
(Marks=3+2)

OR

Question 1:

Allied Manufacturers Pvt. Ltd. purchases material for the month of April costing Rs. 110,000. Labor cost
for the month was Rs. 230,000 whereas FOH for the month are estimated to be 60% of Direct labor cost.
Other information pertaining to the inventory balances of the company are as follows:

Inventories Beginning (Rs.) Ending (Rs.)

Finished Goods 420,000 305,000

Work In Process 230,000 302,000

Raw Material 120,000 96,000

Page 1
Required
1. Prepare a schedule of cost of Goods Manufactured (Marks = 3)
2. Compute the prime Cost (Marks = 01)
3. Compute the Conversion Cost (Marks = 01)

Question 2:

Agritech Parts Incorporation manufactures a component used in farm machinery. The firm's fixed costs are
3,500,000 Rs per year. The variable cost of each component is Rs. 1,700 and the components are sold for Rs.
3,000 each. The company sold 5,000 components during the prior year.
Required
a) Compute the break-even point in units. (Marks = 2)
b) What will the new break-even point be if fixed costs increase by 10 percent? (Marks = 2)
3) What was the company net income for the prior year? (Marks = 2)
4) The sales manager believes a reduction in the sales price to Rs. 2,500 will result in orders for 1,200
more components. What will the break-even point be if the price is changed? (Marks = 2)
5) Should the price change discussed in requirement 4 be made? Explain Why. (Marks = 2)

Page 2
Question 3:

Metal Works Innovations Corp., a manufacturing company, specializes in creating and producing
precision metal components for various industries. As of May 1, the company had three ongoing jobs:
job #103, #104, and #105. During May, two new projects were initiated, job #106 and #107. By the end
of May, job #104, #106, and #107 were completed, and job #104 was handed over to the client. The
following data were collected:

Job #103 Job #104 Job #105 Job #106 Job #107
Cost of Beginning Rs 680 1,450 Rs 1,200 Rs 0 Rs 0
Inventory
Direct Material Cost 850 720 110 4,200 3,100
Direct labour Cost 600 720 100 3,000 2,400

Overhead is applied at the rate of 45 percent of direct labor cost.

Required:

1. Calculate the Manufacturing cost for job #107 as of the end of May 31. (Marks = 2)
2. Determine the ending balance in Work in Process on May 31. (Marks = 2)
3. Calculate the cost of goods sold for the month of May. (Marks = 2)
4. Prepare necessary Journal Entries for job #104 for the following: (Marks = 4)
Cost of Material charged to jobs
Cost of Labor Charged to jobs
Cost of Factory Overheads charged to jobs
Cost of Work-In-Process posted to Finished Goods.

Page 3

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