# MGT402‐ Cost & Management Accounting   ASSIGNMENT – SPRING 2009

TOTAL MARKS: 40
Due Date to Submit the Assignment is  Friday, June 12, 2009

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Following are the set of case studies of You are required to read and understand the information carefully and then attempt the Questions provided at the end.

Edited by Foxit Reader Copyright(C) by Foxit Software Company,2005-2006 For Evaluation Only. different manufacturing companies

Case # 1
Mark Philips Ltd Company that carried out jobbing work. One of the jobs carried out in February was Job # 13000, to which the following information relates. Items Direct material Y Direct material Z Department P Department Q Particulars 400 kilos issued from stores at a cost of Rs.5 per kilo 800 kilos issued from stores at a cost of Rs.6 per kilo and 60 kilos returned to store, A further 20 kilos were damaged and treated as abnormal loss 300 hours of labor@ Rs.4 per hour 200 hours of labor@ Rs.5 per hour Department P had to carry out Rectification works, which took 20 hours in normal time. These 20 hours are additional to the 300 hours above. This rectification work is normal for a job such as job # 13000, and since it was expected, is included in direct costs of the job. Overhead is absorbed at the rate of Rs.3 per direct labor hour in both departments.

Read the above case study carefully and write down the correct option number (e-g A, B, C, D) in the given Excel file.

1. What was the direct material cost of job # 13000? A. Rs.6,320 B. Rs.6,440 C. Rs.6,680 D. Rs.6,800

2. What was the direct labor cost of job # 13000? A. Rs.2,280 B. Rs.2,200 C. Rs.2,530 D. Rs.2,600

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3. What was the production overhead cost of job # 13000? A. Rs.1,560 B. Rs.900 C. Rs.600 D. Rs.1,500

4. What was the full production cost of job # 13000? A. Rs.10,160 B. Rs.10,100 C. Rs.10,280 D. Rs.10,335

5. What was the rectification work cost of job # 13000? A. Rs.80 B. Rs.100 C. Rs.90 D. Rs.70

Case #2

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Unilever Pakistan sells one product for which data is given below:
Particulars Selling price per unit variable cost per unit Fixed cost per unit Rs 10 6 2

The fixed costs are based on a budgeted level of activity of 5,000 units for the period.

Read the above case study carefully and write down the correct option number (e-g A, B, C, D) in the given Excel file

6. What is Unilever breakeven point in Rs of sales revenue? A. Rs.25, 00 B. Rs.25,000 C. Rs.5,000 D. Rs.50,000

7. What is Unilever breakeven point in units of sales revenue? A. 25,000 units B. 25,00 units C. 50,000 units D. 5,000 units

8. How many units must be sold if unilever wish to earn a profit of Rs.6,000 for the period? A. 2,000 units B. 4,000 units C. 6,000 units D. 8,000 units

9. What is unilever margin of safety for the budget period if fixed costs prove to be 20% higher than budgeted? A. 60% B. 40% C. 33x1/3% D. 20%

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10. If the selling price and variable cost increase by 20% and 12% respectively by how much must sales volume change compared with the original budgeted level in order to achieve the original budgeted profit for the period? A. B. C. D. 24.0% increase 24.2% decrease 37.9% decrease 37.9% increase

Case #3
A product is manufactured as a result of two processes, A and B.detail of process B for the month of august were as follow: Particulars Materials transferred from process A Labor Costs Overheads Output transferred to finished goods Closing work in progress Rs. 10,000 kg valued at Rs.40,500 1,000 hours @ Rs.5.616 per hour 50% of labor costs 8,000 kg 900 kg

Normal loss is 10% of input and losses do not have scrap value. Closing work in progress is 100% complete for material, and 75% complete for both labor and overheads.

Read the above case study carefully and write down the correct option number (e-g A, B, C, D) in the given Excel file

11. What is the value of the abnormal loss in Rs? A. Rs.Nil B. Rs.489 C. Rs.544 D. Rs.546

12. What is the value of the output (finished units) nearest to Rs? A. Rs.43,977 B. Rs.39,139 C. Rs.43,488 D. Rs.43,680

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13. What are the equivalent units of production as to material and labor & overheads in August? Material Labor& overheads A. 9,000 units 8,775 units B. 10,000 units 8,775 units C. 8,775 units 9,000 units D. 9,000 units 8,775 units

14. What is the value of total production cost in Rs? A. Rs.8,424 B. Rs.5,616 C. Rs.40,500 D. Rs.48,924

15. What is the value of the closing work in progress nearest to Rs? A. Rs.4,403 B. Rs.4,892 C. Rs.4,947 D. Rs.4,698

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Case #4
The following information is available for Panasonic company new product line: Particulars Sales price per unit Variable manufacturing cost per unit Total annual fixed manufacturing cost Variable administrative cost per unit Total annual fixed marketing and administrative expenses Rs. 15 8 25,000 3 15,000

There was no inventory at the beginning of the year. Normal capacity is 12,500 units. During the year, 12,500 units were produced and 10,000 units were sold.

Read the above case study carefully and write down the correct option number (e-g A, B, C, D) in the given Excel file

16. What is the value of ending inventory, assuming the use of direct costing? A. Rs.7,500 B. Rs.15,000 C. Rs.20,000 D. Rs.10,000

17. What is the value of ending inventory, assuming the use of absorption costing? A. Rs.7,500 B. Rs.15,000 C. Rs.25,000 D. Rs.10,000

18. Total variable cost charged to expense for the year, assuming the use of direct costing? A. Rs.115,500 B. Rs.137,500 C. Rs.117,500 D. Rs.110,500

Edited by Foxit Reader Copyright(C) by Foxit Software Company,2005-2006 For assuming Only. 19. Total fixed cost charged to expense for the year,Evaluationthe use of absorption costing?

A. B. C. D.

Rs.20,000 Rs.15,000 Rs.35,000 Rs.40,000

20. What is the value of Total fixed manufacturing cost per unit? A. Rs.1 B. Rs.8 C. Rs.2 D. Rs.3