Professional Documents
Culture Documents
SECTION -A
There are FOUR questions in this section. Answer any THREE.
1. (a) 'In a manual production process, manufacturing overhead depends on direct labor cost'
Contd P/2
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HUM 279
Contd ... Q. No. l(b)
Required:
(i) Draw a statement of cost of goods sold and income statement for the year ended on
June 30, 2011.
(ii) Compute the quotation price under the following situations:
~ Cost of Direct Material is Tk. 30,000 and cost of Direct Labor is Tk. 20,000.
2. (a) Which principles are related with the adjusting entries? Explain. (5)
(b) 'Advanced Publications' was started on January 01, 2010. The Trial Balance at March
Contd P/3
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HUM 279
Contd eo, Q. No. 2(b)
Contd P/4
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HUM 279
Contd ... Q. No. 4(b)
Required:
(i) Journalize the transactions.
(ii) Post to the ledger accounts.
(iii) Prepare trial balance on April 30, 2010.
SECTION -B
There are FOUR questions in this section. Answer any THREE.
5. (a) What are the mam limitations of Direct Method of cost allocation? How can
Required:
(i) Do the allocation under simultaneous equation method.
(ii) Which of the two service departments get priority at the time of allocation under step
down method?
(c) As per Standard Cost Card, one unit of a product consumes 5 kg of material at a
standard price of $ 7. During a certain period, a total of 4500 kg of material was
purchased at $ 27000. However, 3,400 kg of material was used to produce 700 units.
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HUM 279
Required:
Should the project be selected if targeted payback period is 3 years or less?
(b) Consider the same project as stated in (a). If cost of capital is assumed to be 10%,
should the project be selected under Net Present Value method? (12)
(c) Compute the IRR of the same project. Cost of capital is 10%. PVIF A table is given
below for use: (15)
16% 17% 18% 19% 20%
5 years 3.274 3.199 3.127 3.058 2.991
7. (a) What are the different factors that determine the need for working capital of a
company? (5)
(b) Consider the information as given below: (30)
Particulars Amount ($)
Purchase (on account) 70,000
Direct Labor 25,000
Depreciation 8,000
Other factory related expanses 12,000
Selling and distribution expenses 15,000
Administrative expenses 10,000
Sales 180,000
Status of inventory level at the beginning and end of the period were as follows:
Types of Inventory Beginning Ending
Raw Material 8,000 12,000
Work-in-process 17,000 15,000
Finished Goods 22,000 14,000
In addition, balance of debtors were: beginning - 14000, ending - 26,000 and balance of
creditors were: beginning - 12,000, ending - 18,000.
Required:
(i) Compute Gross Operating Cycle and Net Operating Cycle.
(ii) If daily cash requirement is $ 1200; what will be total working capital need?
Contd P/6
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HUM 279
8. (a) What is a CVP Graph? Can you draw a dummy CVP graph and explain different
Required:
(i) Compute CM, CM Ratio, BEP in units and BEP in sales dollar.
(ii) Draw an income statement assuming 10,000 units sold. Compute DOL and show the
percentage changes in net operating income if sales increases by 10%.
(iii) If variable cost increases to 60%, what will be the new selling price per unit to earn
the same rate of profit?
(iv) Consider original data. An expert may be hired at a fixed cost of $ 5000 who may
save $ 1 in variable cost. Should the expert be hired?
(v) If the company targets to make $ 80,000 profit, how many units the company have to
sell?
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L-3ff ..l/EEE ). Date: 23/09/2013
BANGLADESH UNIVERSITY OF ENGINEERING AND TECHNOLOGY, DHAKA
L-3/T-l B. Sc. Engineering Examinations 2011-2012
SECTION-A
There are FOUR questions in this section. Answer any THREE.
(c) Mr. Mihir started "Mihir Enterprise" by contributing Tk. 800,000 as capital on 1st
July, 2012. The following transactions occured during the first month of operation: (30)
July 1 : Borrowed Tk. 80,000 from HSBC bank by issuing a note payable in two
years.
July 5 : Hired an office space for business for rent Tk. 10;000 per month.
July 7 : Purchased office equipment from an outside supplier for Tk. 20,000 to be
paid in next 60 days.
July 9 : Earned revenue ofTk. 20,000 cash for service provided.
Required:
(i) Journalize each transaction
(ii) Prepare ledger of only "Cash Account".
2. (a) "An adjusting entry may affect more than one balance sheet or income statement
Contd P/2
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HUM 279 :,1
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(b) (30)
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River Resort Company
Trial Balance
June 30, 2012
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Accounts Name Debit Credit
Cash 6,500
Accounts receivable 4,000
Prepaid insurance 2,400
,
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...."',' Supplies 1,500
f:: ,', Office furniture 15,000
Accounts payable 3,500
Unearned service revenue 6,000
Capital 20,000
.'.To '
Service revenue 3,900
Salaries expense 2,000
Rent expense 1,000
Drawings 1,000
Total 33.400 33.400
Contd P/3,
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HUM 279
3. (a) Why is it possible to prepare financial statements directly from. an adjusted trial
balance?
(5) .
(b)
(30)
Polar Icecream
Trial Balance
31st December 2012
Cash 20,500
Accounts Receivable 15,000
Accounts payable 12,000
.' .
~'!.:' Mortgage payable 3,700
,',.':0,;
Purchase 20,100
Sales 40,500
Sales returns 1,200
Purchase discount 500
Polar capital 36,200
.,":-;, 2,300
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Drawings
Salaries 3,400
Prepaid insurance 3,600
Machinery 16,000
Rent expense 5,000
Copyright 20,000
Bond payable 20,000
Total 112,900 112,900
"': .... -.
Adjustments:
* Merchandise inventory on December 31st2012 is Tk. 6,700.
* Rent is 40% administrative and 60% selling ..
4. (a) State what are the standard for comparison in Ratio Analysis? (5)
Contd P/4
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HUM 279
Contd ... Q. No.4
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Land 20,000 26,000
.~i::
Solars 2010 income statement included net sales of Tk. 100,000, cost of goods sold
Tk. 60,000 and net income Tk. 15,000.
Required:
Compute the following ratios for 2010.
(i) Current ratio.
(ii) Acid-test or quick ratio.
(iii) Receivable turnover.
(iv) Inventory turnover.
(v) Profit margin.
(vi) Return on stockholders equity.
(c) A firm is considering the following two mutually exclusive investments: (18)
Cash Flows (Tk.)
Projects Co CI C2 C3
A -25,000 +5,000 +5,000 +25,640
B (~8,000 +12,672 +12,672 +12,672
,/
The cost of capital is 12%.
Required:
(i) Compute NPV for each project.
(ii) Compute IRR for each project.
The Table Value may be used as given below:
Factors Value
Year 14% 15% 16% 17% 18% 19% 20%
3 2.322 2.283 2.246 2.210 2.174 2.140 2.106
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, SECTION-B
There are FOUR questions in this section. Answer any THREE.
5. (a) X Company manufacturers home furnishing. It has the following operational data for
(25)
'1' " the year 2012 (figures are in Taka):
Materials, January 1,2012 12,000
Work-in-process, January 1,2012 5,000
Finished goods, January 1,2012 6,000
Materials, December 31, 2012 10,000
Work-in-process, December 31,2012 3,000
Finished goods, December 31, 2012 3,000
Materials purchased on account 15,000
Direct Labor 12,000
) .....
FaCtory Supplies 7,000
Factory Utilities 5,000
Selling expense 6,000
Administrative expense 8,000
...
Requirements:
(i) Prepare a Cost Statement for the year 2012.
(ii) Calculate the net income for the year 2012.
(b) Robin Partners provides management consulting service. It has two support
departments-Finance (Fin) and Information Technology (IT) and two operating
departments-Government Consulting (GOVT) and Corporate Consulting (CORP). For
the year 2012, its cost records indicate the following:
(10)
Support Operating
Total
Fin IT GOVT CORP
Budgeted Overhead Costs 6,00,000 24,00,000 80,00,000 12,00,000 1,22,00,000
before allocation (Tk.)
Support work supplied by - 25% 40% 35% 100%
Fin
Support work supplied by 10% - 30% 60% 100%
IT
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'D~sign a mixed cost function using High-low method and calculate what will
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'bethe estimated cost in 2013 if the estimated machine hour is 1700 hourS.
I?esign a mixed cost function using Regression method and calculate what will
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be the estimated cost in 2013 if the estimated machine hour is 1700 hours .
.nl;lnagement ofXYZ Company estimates it would need 3 units of raw material
. ~ .'
::e'each unit of finished goods. Its standard price for raw material purchase is Tk
.f. However, it actually purchased and used 4000 units of raw material at Tk 3.6.
ild Qf the period its finished goods were 1500 units. Calculate the Material Price
does Margin-of safety mean? Distinguish between Fixed Cost and Variable
, "
~{examples. (5)
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Requirements:
(i) Compute the Net Operating Income.
(ii) Calculate Variable expense ratio and Contribution Margin ratio.
(iii) What are the BEP in units and BEP in sales? Use the equation method. If now
it sells 600 units, what will be its Net Operating Income? Use CM method to
,.~.'. answer.
(iv) Refer to the original data, the company wants to earn Net Operating Income of
Tk 50,000. How many units shall it sell?
(v) Refer to the original data, if the company manager de~ides to use a higher
quality component, it estimates an increase of Tk 100 variable expense
;;;;;..
8. (a) What are the differences between Variable Costing Method and Absorption Costing
Method? Explain.
(5)
. j ,
Units in beginning inventory 2000
UnitS produced 20000 . 22000
Units sold 18000 21000
Units in ending inventory 2000 3000
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L-31T-l/EEE Date: 31/05/2014
BANGLADESH UNIVERSITY OF ENGINEERING AND TECHNOLOGY, DHAKA
L-3/T-1 B. Sc. Engineering Examinations 2012-2013
Sub: HUM 279 (Financial and Managerial Accounting)
Full Marks: 210 Time ..: 3 Hours
The figures in the margin indicate full marks.
USE SEP ARA IE SCRIPTS FOR EACH SECTION
SECTION-A
There are FOUR questions in this section. Answer any THREE.
Requ.ired:
(i) Prepare a tabular summary from the above transaction.
(ii) Prepare an income statement for the month.
2. (a) What is a Trial Balance and what are its purpose? (5)
(b) Following are the account balances of Butterfly Computer Services Limited for the
year ended on 30th June, 2012: (14)
Purchasing cost of computer Tk. 20,00,000; Sale of computer 34,00,000; Service fees
received Tk. 300,000; Salaries to hardware engineers Tk. 200,000; Advetisement
expense Tk. 50,000; Office rent Tk. 60,000; Maintainance expense Tk. 130,000;
Accounts payable Tk. 80,000; Tax payable Tk. 5;000; Bad debtsTk. 50,000; Prepaid
insurance Tk. 50,000; Office equipment Tk. 60,000; Discount allowed Tk. 85,000;
Bank balance Tk.455,000; Unpaid salaries Tk. 5,000; Accounts receivable
Tk. 600,000; Opening stock of computer Tk. 400,000; Furniture Tk. 250,000; Capital
Tk.600,000.
Required: Prepare a Trial Balance.
Contd P/2
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HUM 279
Contd ••. Q. NO.2
Nikon Company
Balance Sheet
December 31,2011
Assets Liabilities and Equity
Cash 21,000 Accounts payable . 122,000
Investment (Short term) 18,000 Income tax payable 23,000
Accounts Receivable 86,000 Bond payable 120,000
Inven~ory 90,000 Common stock 150,000
(Tk. 5 par) ..
Plant asset , 423,000 Retained earnings 233,000
Total asset 638,000 638,000
Other Data: Common stock recently sold at Tk. 19.50 per share.
Required: Compute the following ratio -
(i) Acid Test (ii) Receivable turnover (iii) Return on equity (iv) Debt to total asset
(v) Earning per share "(vi) Price-earning ratio (vii) Asset turnover or Return on asset
(viii) Inventory turnover.
4. (a) Why maya trial balance not contain up-to-date and complete financial information? (5)
(b) Following balances are extracted from the ledger balances of Philips Company at 31 st .
December, 2010. (30)
Accounts Title Debit (Tk.) Credit (Tk.)
Accounts Receivable 12,000
Accounts Payable 6,000
Cash 30,500
Patent 20,000
Capital 50,900
Supplies 900
Salaries 7,000
Sales salaries 3,000
maintainance expense 4,000
Rent 13,000
Notes payable 5,000
Bond payable I
20,000
Tax payable 20,000
Store equipment 25,000
,
Machinery 2,500
Unearned commission 3,000
Sales 47,000
Cost of goods sold 30,000
Prepaid insurance 4,000
151.900 151.900
Adjustments
• Two-thirds of supplies were used during the period.
• 60% of unearned commission was earned during the period.
• Depreciation 10% of store equipment.
• 60% of rent relates to office and the remaining to sales.
Required:
(i) Prepare a multiple step (classified) income statement at 31 st December, 2010.
I
(li) Prepare a statement of owners equity and aiclassified balance sheet at 31st December, 2010.
Contd P/4
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HUM 279
SECTION-B
There are FOUR questions in this section. Answer any THREE. ,
Symbols indicate their usual meaning.'
5. (a) What is the difference between manufacturing cost and non-manufacturing cost? Give
example of each. (6)
(b) Differentiate among variable, fixed and mixed cost. (3)
(c) Givenbelowis the Cost Data of ZY companyfor the year 2013.All the figuresare in Taka. (26)
Beginning Raw Material 80,000
Ending Raw Material 60,000
Beginning WIP 22,000
Ending WIP 18,000
Beginning Finished Good 44,000
EJ.ldingFinished Good 33,000
Material Purchase 60,000
Freight charge 3,000 ,
Direct Labor Cost 20,000
Indirect Labor 10,000
Factory machine insurance J 15,000
Depreciation Expense:
Factory Machine 22,000
Office furniture 33,000
Factory electricity bill 15,000
Sales Salary 24,000
Television'promotion 30,000
Office repair 8,000
Production manager's salary 70,000
Requirements:
(i) Prepare a Cost Statement for the year 2013.
(ii) Calculate the net income for the company.
6. (a) Tyler Tooling Company uses a job order costing system with overhead applied to
products on the basis of machine hours. For the upcoming year, the company estimated
its total manufacturing overhead cost at BDT 250,000 and total machine hours at 62,500.
During the first month of operations, the company worked on three jobs and recorded the
following actual direct materials cost, direct labor cost and machine hours for each job: (15)
Job 101 Job 102 Job 103 Total
Direct material \, 12,000 9,000 6,000 27,000
Direct labor cost 18,000 7,000 6,000 31,000
Machine hours 2,000 hours 3,000 hours 1,000 hours 6,000 hours
Contd P/5
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HUM 279
Contd eo. Q. No. 6(a)
Required:
(i) Calculate the predetermined overhead rate.
(ii) Calculate the overhead cost for each job.
(b) A car company has the two operating departments namely- Machine department and
Car department. It has the following information - (20)
Budgeted fixed cost Tk.3000,000
Practical capacity 18,000 machine hours
budgeted usages by:
Machine department 9,000 machine hours
Car department 3,000 machine hours
Actual usages by:
Machine department 9,500 machine hours
C.ar department 3,500 machine hours
Variable cost Tk. 200 per hour
Required
Allocate the cost to the operating departments using
(i) Single rate method
(ii) Dual rate method
(iii) Practical capacity method
(iv) Which one is the best method? Explain.
7. (a) What is meant by the tern "Operating Cycle"? Define current asset. What basis is
used for arranging individual item within the current assets section? (7)
(b) Explain the statement, "Financial statements are designed for analysis". (4)
(c) A company is considering an investment proposal to install a new machine at a cost of
Tk. 50,000. The estimated cash flows froni the investment proposal are as follows - (24)
Year CFAT (Cash Flow Adjusted Time)
1 10,000
2 10,450
3 11,800
4 12,250
5 16,750
Required: Determine
(i) Pay Back Period
(ii) Internal rate of return (IRR).
(iii) Net Present Value (NPV) at 10% cost of capital.
(iii) Profitability Index (PI) at 10% discount rate.
Contd P/6
..,::J
=6=
HUM 279
8. (a) What is inventory costing? Differentiate between variable and absorption. costing
Required:
(i) Calculate the product cost per unit under Absorption costing system and Variable
costing system.
(ii) Prepare income statements using Absorption costing system and Variable costing
system.
(iii) Explain the Reason for difference in net operating income due to change in two
different costing methods.
"
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L-3/T-lIEEE Date: 0410812015
BANGLADESH UNIVERSITY OF ENGINEERING AND TECHNOLOGY, DHAKA
L-31T-l B. Sc. Engineering ExammatlOns 2013-2014
SRCTION-A
There arc FOUR questions in lhi~ section, Answer UllY THREE,
I. (a) What are the different lypes of financial statements that arc usually published 1\1 the
annual report? (5)
(h) \\Trite down (he lwo ~ec()ndary '1ua1itie~ of accounting information accordmg to
conceptual frame work Oracc()unting~ (3)
(c) "Aristocrat Enterprise" w~s opened on May 1, 2013, The following transactions
occllITed in the month of May - (27)
May 1 : Started business investing Tk 900,000 cash in the business,
May 2 : Hired a employee at a monthly sulury ofTk. 10,000
May 5: Paid advertising expense for the momh in cash Tk 5,000
May 6 : Borrowed Tk. 100,000 in cash from a bank by signing notes payable.
:May9 : Earned revenue Tk. 60,000 by providing services, 50% 01' which received
in ea~h and the remaining balance was on account.
May!1 Pun:hased office equipment for Tk. 50,000; Paid Tk 15,000 in ea~h and the
remaining amount will be paid in a later dale
May [4: Received Tk. 20,000 cash from the customers related to tran~aetion May 9.
Mayl5: Paid to accounts payable Tk 20,000 in cash,
May 20: Paid office rent for the month Tk. 20,000 in cash.
May 22 : Withdraw Tk. 5,000 <:u8hfrom the business for personal usc,
Required:
(I) Prepare Ulubular ""mmmy from the above transaetioll5 for the month ofMuy.
(Ii) Prepare an inlXlme statement for the month of May.
2. (a) "Every debit mu~t have it~ corresponding credit", Explain. (5)
(b) "Jamuna Electronics" started a business during January 1 2013, The following
transactions occurred in the mouth- (16)
JanliUTY1; Service provided to a customer but not yet re~eived Tk. 90,000
Junliury 3: Purchase supplies on account Tk. 30,000
January 7: Earned revenue Tk. 95,000 of which Tk. 60,000 1Scollected in cash and the
balance was due ill January,
Jalluary9: Incurred mility expense, ti,r the month in cash Tk 2,000
Jalluary 11: Received an e1cctricity h1l1for Tk. 8,000
January 13: Received Tk 10,000 In cash from the customer,
January 15: Paid office rent in advance f"r next two months Tk. 20,000 in msh,
January 17: Paid Tk. 15,000 to account payable for supplies.
HUM 279/EEE
Contd ... O. No. 2
Walton Compan)"
Balance Sheet
December 31, 2012
-""3et AmOlmt (Tk) Liabilities nnd Equity Amount (Tk)
Cash 25,000 Account payable 50,000
Account, receivable 50,000 Other current liability 25,000
Inventory 90.000 Long term debt SO,OOO
Investment (ohorllmn) 75,000 Common ,lock (Tk 10 par) 340,000
Plan asset (net) 400,000 Retained earnings 145,000
Total asset 640000 Total LiabHitie, aud Equity 640,000
Othcr information: Common stock reecntly sold at Tk. g,OOper share, at market.
Rcquircd:
(i) Profit margin.
(ii) Asset turnover or Return on asset.
(ili) Return on ~quity (ROE)
(iy) Quick or acid tcst ratio.
(v) Earnings per share (EPS).
(vi) Price earnings ratio.
(vli) D~bt to total asset.
3. (a) "AdJl1stmg ~n[ries are reql1ired by the cost principles of aecol1nlmg", Do you agree'!
Explain. (5)
(b) The Trial Blllllllce of "Popular Company" as on May 31, 2014 i, given belaw- (30)
HUM 279/EEE
Contd ... Q. No. 31b)
"Popular Company"
Trial Balance
May 31, 2014
Accounts Title Debit (Tk.) Credit (Tk.)
Cash 30,000
Accounts re~eivubl~ 5,000
Prepaid insurance 2,400
Supplies 1,500
Office furniture 15,000
A~~ounts payable 9,500
Unearned serVlC~revenue 6,000
Capllal 42,500
Service revenue 5,900
Salary expense 2,000
I
Rent expense 1,000
mamtenanee expense 2,000
lnterest expense 4,000
Drawings 1,000
Total 63,000 63,000
Other Information;
).> A~~ruedr~ntis Tk. 600.
).> Ma1l1(enan~e ~xpense incurred but not paid on May 31, Tk. ROOO.
>- TI<.3,000 ofsm-1ce performed during the month but has notbeen rocordcd ~ on May 31.
).> Unearned service revenue ofTk. 1,500 has been earned.
).> Tk. 1000 of supplies has been used during the period,
).> Office equipment is being depreciated at Tk. 250 per month.
>- Accrued interest is Tk. 1,500.
Required:
(il Prepare necessary adjusting entries.
(il) Prepare an adjusted trial balance as at May 31, 2014
HUM 279/IJ:IJ:E
Contd ... O. No. 4(b)
"]\1 ]\1 Fabrics" Cornpan~' T,td.
Trial Balance
31st December, 2012
Aceonnts Title Debit (Tk.) Credit (Tk.)
Cash 43,800
Accounts receivable 20,500
Accounts payable 31,000
Capital 51,000
Land 84,800
Sales revenue 95,000
Salary expense 12,000
Prepaid insurance 4,000
Cost of good sold 5,000
Utility expense 1,000
Commission expense 3,000
Supplies 1,000
Notes payable 13,100
Drawings 2.000
I Rent expense I 13,000
Goodwill 20,000
Machinery 100,000
Long tenn in\'estment 50,000
Bond payable 155,000
Wagepayahle 15,000
Total 360,100 360,1\10
Adjustments data:
(i) Accrued salary is Tk. 500.
(il) Commission exoense is related to sales,
(iIi) 60% rent relate, to office and remaining to sales,
(Iv) One half of the suppl1es "ere used during the period.
Required:
(i) Prepare a multiple step (classified) income ~lakment for the year ended on 31st
December, 2012.
(ii) Prepare an owners' equity statement and a da>sified balance sheet on 31st
De<:ember,2012,
Contd , Pl5
=5=
HUM 279IEEE
SECTION-8
There arc FOUR questions in this section. Answ~r any THREE.
5. (a) What are th~ differences between product cost and period cost'? (5)
(h) The tol1owing mfonnatlon has been taken {rom th~ accounting records of Klear-Seal
Corporation for last year. (15)
Sales Tk 14000
Raw material Inventory, January 1 90000
Raw milt~rial Inv~ntory, December 3 1 60000
Utihties, factory 36000
Dired lahor cost 150000
Depreciation, factory 162000
Purchase ofmw material 750000
]nsurance, factory 40000
I Supplies, factory 15000
Indirect lahor 300000
Maintenance, factory S7000
\Vork-in-process, January I 180000
Wllrk-ill-proc~Ss. Decemb~r 31 100000
Required:
(i) Usc the high-low method to establish the fixed and variable eompon~nts of
admitting eo,ts.
(ii) Express the tixed and variable components of admitting costs as "-cost fonnu!a in
the fonn y = a + bx.
Contd P/6
=6=
HUM 279/EEE
6. (al Larned Company recorded the following tran~ac!ion~ for the just completed month. (9)
(i) Tk. 80000 in raw material were purchased on account,
(ii) Tk. 71000 in raw material were requisitioned for usc in production of this amount,
'[k. 62000 was for direct materials and the remainder was indirect material
•
(iii) '[otal labor wages of Tk. 112000 were incurred, of this amolmt Tk. 101000 was
for direct labor and the remainder was for indirect labor.
(iv) Additional manufacturing overhead cost ofTk. 175000 were incurred
Required: Record the above transactions in Journal entries.
(b) Luthan company uses direct-labor hour for the allocation of overhead cost H is
estimated that direct labor hour is 11000 and Tk. 257400 of estimated total manufac!unng
overhead, (6)
11\e company incurred actual manufactClring overhead costs of Tk. 249000 and 10SOO
total actual direct labor hour:s during the penod.
Required:
(i) Calculate the pre-determined overhead rate,
(ii) Determine applied manufaehlfing overhead cost.
(iii) Find out underapplied or overapplied manufacturing overhead.
(c) Merlo Company manufactures and sells a single product. The company's :.ale and
expenses for last quarter follow: (20)
Total Per unit
Salcs Tk.450000 Tk.30
Less: Vanable expenses 180000 11
Contribution Margin 270000 lli
Le~s: Fixed expenses 216000
Ket Income 5<WOO
Required:
(i) 'What is the quarterly break-even-point in units sold and in saks amount?
(ii) \I/ithout restoring the eompl.llation~, what is the total CM at the Break-even point?
(iii) How many units would have to be sold each quarter to earn a target profit ofTk.
90000? Use the CM method,
(h) Compute the company's margin of safety both in taka and percentage terms.
(v) Whatl~ the CM ratio? If sales increase by Tk. 50000 per quarter and there is no
change 1\1 the fixed expenses, by how much would you expect net income to increase'!
7. (a) What arc the differences between Financial aeeonnting and Managerial accounting? (5)
(h) The Alpine House Inc. is a large retailer of winter sports equipment. An Income
Statement for the company's Ski Department fix a recent quarter is presented helow: (14)
HUM 279/EEE
Coutd ,., 0, No. 7(b)
The Alpine House Inc,
Income Statement - Sh Department
For the Quarter Ended Mar~h 31
Amount (Tk.)
Sales 150000
Less: Cost of Good sold 90000
Gross margin 60()00
Ski's seJI, on the average, for Tk, 750 per pair. Variable selling e~penses are Tk. 50 per
pair Ski's sold, The remaining seIling expenses are fixed. The administratlve expen>es are
20% variable and 80% fixed, The company docs not manufacture it's Own Ski'8, II
purchases them from a supplier for Tk. 450 per pair.
Required:
(i) Prepare an Income Statement for the quarter using the contribution approach.
(ii) for every pair of Ski's sold during the quarter, what was the eontribLltion toward
covering fixed expenses and toward earning profits?
(cl A company is going to purchase a new machine. The related inj'lITnatiull of the
Required:
(1) Pay Back Periou,
Contd Pig
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8. (a) In what situation will absorption costing result in higher net income than vuJiable
C()slmg? VI'hy? (5)
(h) A<lvan~e products company munufactures and sells a single product. You have been
SECTION -A
There are FOUR questions in this section. Answer any THREE.
1. (a) According to revenue recognition principle when should the revenue record? (5)
(b) What is the basic behind economic entity assumption? (3)
(c) Mr. Khan started his manufacturing business on June 1, 2014. The following
transactions took place during the month of operation: (27)
June 1: Invested Tk. 800,000 cash in the business.
June 6: Purchased office equipment in cash Tk. 120,000
June 10: Hired a managing director to manage the business efficiency. He will be paid
Tk. 30,000 per month
June 12: Incurred advertising expenses on account Tk. 10,000
June 16: Incurred office rent in advance Tk. 15,000
June 17: Earned Tk. 80,000 for selling the product; Tk. 45,000 is received in cash and
remaining on account.
June 19: Withdrawn by Mr. Khan for his personal use Tk. 10,000 in cash from the business
June 20: Paid the amount due related to advertising expense
June 23: Received cash from previous customer related to transaction June 17
June 26: Employees salaries expense was due for Tk. 8,000
Required:
(i) Prepare a tabular summary from the above transactions.
(ii) Prepare an owner's equity statement.
Required:
(i) Give journal entry from the above transactions.
(ii) Prepare necessary ledger accounts.
Contd P12
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Contd ... Q. NO.2
Marcel 2014 income statement including net sales of Tk. 100,000, cost of goods sold
Tk. 60,000 and net income Tk. 15,000.
Required: Calculate the following ratios for 2014-
(i) Current ratio
(ii) Quick ratio
(iii) Receivable turnover
(iv) Inventory turnover
(v) Profit margin
(vi) Return on stock holder's equity
3. (a) Why do accrual basis financial statements provides more useful infonnation than cash
basis statements? (5)
(b) The following information is available for "Advance Construction" Company for the
month of December - (30)
"Advance Construction"
Balance Sheet
December 31,2014
Accounts N arne Debit (Tk.) Credit (Tk.)
Cash 5,700
Accounts receivable 6,000
Supplies 1,900
Prepaid insurance 3,600
Office furniture 10,200
Accounts payable 4,500
Unearned service revenue 2,000
Contd P/3
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Contd ... Q. No. 3(b)
Additional information:
• Tk. 900 of supplies has been used during the period.
• Tk. 500 balances in the unearned revenue remained unearned at the end of the period.
• Insurance policy is for two years.
• Travel expense incurred but not paid on December 31, 2014 Tk. 1,200.
• Utility bill was not paid for the month Tk. 3,000.
• Annual depreciation on office furniture was 10%.
• Invoices showed that Tk. 2,000 of service performed during the month have not been
recorded as of December 31, 2014.
Required:
(i) Prepare necessary adjusting entries.
(ii) Prepare an adjusted trial balance as at December 31, 2014.
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Contd ... Q. No. 4(b)
Adjustments data:
• 40% of utility expense is related to office and 60% related to sales.
• Charge @1 0% depreciation on store equipment.
• Accrued sales salary is Tk. 2,000.
Required:
(i) Prepare a multiple step (classified) income statement for the year ended December,
2014.
(ii) Prepare an owner's equity statement and a classified balance sheet at 31 st
December, 2014.
SECTION -B
There are FOUR questions in this section. Answer any THREE.
5. (a) Define variable and fixed cost. Do you think fixed cost is always fixed? (4)
(b) What is prime cost and conversion cost? (4)
(c) What is manufacturing overhead cost? (4)
(d) Brentline Hospital is interested in predicting future monthly maintenance costs for
budgeting Purposes. The senior management team believes that maintenance cost is a
mixed cost and that the variable portion of this cost is driven by the number of patient-
days. Each day a patient is in the hospital counts as one patient-day. The hospital's chief
financial officer gathered the following data for the most recent seven-month period (23)
Month Activity Level Maintenance cost
(Patient) Incurred (Tk)
January 5600 7900
February 7100 8500
March 5000 7400
April 6500 8200
May 7300 9100
June 8000 9800
July 6200 7800
Contd P/5
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6. (a) The following data from the just completed year are taken from the accounting
records of Eccles Company. (20) .
Sales $750,000
Direct labor cost $90,000
Sells Commission $10,000
Raw material purchases $132,000
Selling expenses $100,000
Advertising expense $5,000
Administrative expense $43,000
Depreciation expense $11,000
Insurance expense $8,000
Actual manufacturing overhead costs $220,000
Manufacturing overhead budgeted $221,000
Sales Commissions $5,000
Required:
(i) Prepare a schedule of cost of goods manufactured. Assume all raw materials used
in production were direct materials.
(ii) Prepare a schedule of cost of goods sold.
(iii) Prepare an income statement.
(b) Siemens Company manufactures and sells a specialized cordless telephone for high
the most electromagnetic radiation environments. The company's contribution fonnat
income statement for recent year is given below (15)
Total (Tk) Per Unit (Tk) Percentage
Sales (20000 Unit) 1000000 50 100
Variable Expense (800000) 40 1
Contribution Margin 200000 10 1
Fixed Cost (50000)
Net Operating Income 50000
Management is anxious to increase the company's profit and has asked for an analysis of
a number of items.
Contd P/6
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Contd ... Q. No. 6(b)
Required:
(i) Compute the company's CM ratio and variable expense ratio.
(ii) Compute the company's break-even point in both units and Tk.
(iii) Assume that sales increase by Tk. 400,000 next year. If cost behavior patterns
remain unchanged, by how much will the company's net operating income increase?
Use the CM ratio to compute your answer.
(iv) Refer to the original data. Assume that next year management wants the company
to earn a profit of at least Tk. 90,000. How many units will have to be sold to meet
this target profit?
(v) Refer to the original data. Compute the company's margin of safety and comment.
7. (a) Dexter Corporation produces and sells a single product, a single color marker pen.
Selected cost and operating data relating to the product for two years are given below: (25)
Selling price per unit $60
Manufacturing costs:
Variable per unit produced:
Direct materials $11
Direct labor $6
Variable manufacturing overhead $3
Fixed manufacturing overhead per year $120,000
Selling and administrative expenses:
Variable per unit sold $4
Fixed per year $70,000
Year 1 Year 2
Units in beginning inventory 0 2000
Units produced during the year 10000 6000
Units sold during the year 8000 8000
Units in ending inventory 2000 0
Required:
Assume the company uses absorption costing
I. Compute the unit product cost in each year.
II. Prepare an income statement for each year.
Assume the company uses variable costing
I. Compute the unit product cost in each year.
II. Prepare n income statement for each year.
(b) Y Ltd. has three production department (P, Q and R) and two service department
(X and Y). The overhead for the departments before reallocation are given below (l0)
Contd P/7
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Contd ... Q. No. 7(b)
Department Overheads
P $30,000
Q $60,000
R $19,000
X $22,000
Y $38,000
The reallocation percentages of the service departments' costs are given below:
Department P Q R X Y
X 40% 25% 25% --- 10%
y 25% 30% 30% 15% ---
Requirement:
I. Use the direct allocation method to reallocate the overheads of service departments
to production departments.
8. (a) What are the differences between discounted and non-discounted techniques of capital
budgeting? (5)
(b) Consider the projects below with respective cash flows: (18)
Years
Project
0 1 2 3 4 5
A (200,000) 35,000 80,000 90,000 75,000 20,000
B (200,000) 28,000 40,000 50,000 90,000 10,000
Required: Calculate:
(i) Pay Back Period for both projects.
(ii) Intemal rat~ of retum (IRR). (For only project B)
(iii) Net Present value (NPV) for both projects at 10% cost of capital.
(c) Foley Company uses job order costing system. The following data relate to the month
of October, 2014 - (12)
(i) Raw material purchased on account Tk. 210,000.
(ii) Raw material issued to production Tk. 190,000 (80% direct and 20% indirect).
(iii) Direct labor cost incurred Tk. 49,000 and indirect labor cost incurred Tk. 21,000.
(iv) The company applies manufacturing cost to production on the basis of Tk. 4 per
machine hour. There were 75,000 machine hours recorded for October.
(v) Production ordered costing Tk. 500,000 according to their job cost sheet were
completed during October and transferred to finished goods.
(vi) Production ordered that had cost Tk. 450,000 to complete according to their job
cost sheet were shipped to customers during the month. These goods were sold at
50% above cost. The goods were sold in account.
Required: Prepare journal entries to record the information given above.
.. .
SECTION -A
There are FOUR questions in this section. Answer any THREE.
Required:
(i) Show the effects of the above transactions on the accounting for the month of
January, 2015.
(ii) Also prepare an income statement for the month.
2. (a) Maria Helen, a business graduate, had started her own consulting firm "Helen M
Consulting" in the year 2010. On January, 2011, her ledger accounts include the
Contd PI2
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Contd ... Q. No. 2(a)
During the month, she had the following events and transactions:
January 5: Performed consultancy services and billed for Tk. 14,000.
January 15: Received Tk. 8,000 cash advance from a client for consultancy
service to be provided.
January 18: Ordered for special supplies required for providing services.
January 20: Paid for a one year insurance policy purchased in cash Tk. 12,000.
January 22: Salary due but unpaid Tk. 8,000.
January 26: Amount received from a client which was on account Tk. 12.000.
January 30: Due salary paid in cash Tk. 8,000.
Required:
(i) Journalize the above transactions.
(ii) Post the journals to the respective ledger accounts.
(b) Following information is available for "Walton Company" - (14)
Walton Company
Income Statement
For the year ended December 31,2012
Amount (Tk.)
Net sales 600,000
Expenses:
Cost of goods sold 415,000
Selling and administrati ve 120,800
expense
Interest expense 7,800
Income tax expense 18,000
Total expense 561,000
Net income 38.400
Walton Company
Income Statement
For the year ended December 31,2012
Asset Amount (Tk.) Liabilities and Equity Amount (Tk.)
Cash 21,000 Accounts payable 122,000
Investment (Short term) 18,000 Income tax payable 23,000
Accounts receivable 86,000 Bond payable 120,000
Inventory 90,000 Common stock (Tk. 5 par) 150,000
Plant asset 423,000 Retained earnings 223,000
Prepaid expenses 2,000 Notes payable (1 year) 2,000
Total asset 640,000 Total Liabilities and Equity 640,000
Other information: Common stock recently sold at Tk. 19.50 per share.
Contd P/3
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Contd ... Q. No. 2(b)
Required: Calculate
(i) Quick or acid test ratio.
(ii) Current ratio .
.(iii) Return on equity (ROE).
(iv) Debt to total asset.
(v) Earnings per share (EPS).
(vi) Price earnings ratio.
(vii) Inventory turnover.
3. (a) Write down the types of prepayment under adjusting entries and identify the types of
adjustments applicable to each category. (5)
(b) The Trial Balance of "AI-Amin State Company" at May 31, 2014 is given below - (30)
Al-Amin State Company
Trial Balance
May 31, 2014
Accounts Title Debit (Tk.) Credit (Tk.)
Cash 10,000
Accounts receivable 5,000
Prepaid insurance 2,400
Supplies 1,500
Office furniture 15,000
Accounts payable 5,500
Unearned service revenue 6,000
Capital 22,500
Service revenue 5,900
Salary expense 2,000
Rent expense 1,000
Maintenance expense 2,000
Drawings 1,000
Total 39,900 39,900
Other information:
~ Accrued rent is Tk. 600.
~ Maintenance expense incurred but not paid on May 31, Tk. 8000.
~ Tk. 3,000 of service performed during the month but has not been recorded as of
May 31.
~ Unearned service revenue ofTk. 1,500 has been earned.
~ Tk. 1,000 of supplies has been used during the period.
~ Office equipment is being depreciated at Tk. 250 per month.
~ Accrued salary in Tk. 1,000.
Required:
(i) Prepare necessary adjusting entries.
(ii) Prepare an adjusted trial balance as a May 31, 2014.
Contd P/4
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4. (a) What are the classifications of liability under a classified balance sheet? (5)
(b) The adjusted trial balance of "XYZ Company Ltd." on December 31, 2015 is given
below: (30)
"XYZ Company Ltd."
Trial Balance
31 st December, 2015
Accounts Title Debit (Tk.) Credit (Tk.)
Cash 19,600
Accounts receivable 23,600
Prepaid Insurance 1,400
Land 56,000
Building 106,000
Equipment 49,000
Accounts payable 10,400
Unearned rent revenue 2,800
Notes payable 200,000
Capital 120,000
Drawings 18,000
Service revenue 75,600
Rent revenue 26,200
Advertising expense 17,000
Salary expense 35,000
Utility expense 15,800
Patents 100,000
Insurance expense 1,700
Depreciation expense - Building 2,500
Depreciation expense - Equipment 3,900
Interest expense 900
Salary payable 9,000
Accumulated depreciation - Building 2,500
Accumulated depreciation - Equipment 3,900
Total 450,400 450,400
Note that Tk. 20,000 of the notes payable will be paid within the current year.
Required:
(i) Prepare a single step income statement for the year ended December, 2015.
(ii) Prepare an owners' equity statement and a classified balance sheet at 31 st
December, 2015.
Contd PIS
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SECTION -B
There are FOUR questions in this section. Answer any THREE.
5. (a) Define the term 'Opportunity Cost" and "Sunk Cost" with examples. (5)
(b) The following information has been taken from the accounting records of Alif
Corporation for last year, 2015. (30)
Selling expense Tk. 1,40,000
Raw material inventory, January 1 90,000
Raw material inventory,- December 31 60,000
Utilities, factory 36,000
Direct labor cost 1,50,000
Depreciation, factory 1,62,000
Purchase of raw materials 7,50,000
Sales 25,00,000
Insurance, factory 40,000
Supplies, factory 15,000
Administrative expense 2,70,000
Indirect labor 3,00,000
Maintenance, factory 87,000
Work-in-process Inventory January 1 1,80,000
Work-in-process Inventory December 31 1,00,000
Finished goods Inventory, Beginning 2,60,000
Finished goods Inventory, Ending 2,10,000
Required:
(i) Prepare a schedule of cost of goods manufactured.
(ii) Compute the cost of goods sold statement.
(iii) Prepare an Income Statement.
6. (a) What are the differences between process costing and job order costing? (5)
(b) Hexim Corporation is a manufacturer that uses job-order costing. The company
applies overhead cost to jobs on the basis of machine-hours worked. For the current year,
the company estimated that it would work 75,000 machine-hours and incur Tk. 450,000
in manufacturing overhead cost. The following transactions were recorded for the year. (30)
(i) Raw materials were purchased on account Tk. 4,10,000.
(ii) Raw materials were requisitioned for use in production Tk. 3,80,000 (Tk.
3,60,000 direct material and Tk. 20,000 indirect materials)
(iii) The following costs were accrued for employee services: direct labor Tk. 75,000;
indirect labor Tk. 1,10,000; sales commissions Tk. 90,000 and administrative salaries
Tk. 2,00,000.
(iv) Sales travel cost were Tk. 17,000.
(v) Utility cost in the factory were Tk. 43,000.
Contd P/6
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Contd ... Q. No. 6(b)
(vi) Depreciation was recorded for the year Tk. 3,50,000 (80% in factory and 20% in
administration).
(vii) Insurance expires during the year Tk. 10,000 (70% in factory and 30% to
administration).
(viii) Manufacturing overhead was applied to production. The company worked
80,000 machine-hours during the year.
(ix) Goods costing Tk. 9,00,000 to manufacturing according to the job cost sheets
were completed.
Required:
(i) Prepare Journal entries to record the preceeding transactions.
(ii) Prepare the T-account of manufacturing overhead.
(iii) Is manufacturing overhead underapplied or overapplied for the year? Prepare a
journal entry to close any balance in manufacturing overhead account to cost of goods
sold.
7. (a) The admitting department's costs and the number of patients admitted for Hilton Hill
Hospital during the immediately preceeding eight months are given in the following table: (8)
Month Number of Patients Admitting Department
Admitted Cost
May 1800 Tk. 14700
June 1900 15200
July 1700 13700
August 1600 14000
September 1500 14300
October 13'00 13100
November 1100 12800
December 1500 14600
Required:
(i) Use the high-low method to establish the fixed and variable components of
admitting costs.
(ii) Express the fixed and variable components of admitting cost as a cost formula in
the form y = a + bx.
(b) Tribution Company manufactures and sells a single product. The company's sale and
expense for last quarter are as follow: (20)
Total Per Unit
Sales Tk. 4,50,000 Tk. 30
Less: Variable expense 1,80,000 12
Contribution Margin 2,70,000 18
Less: Fixed expense 2,16,000
Net Income 54,000
Contd P/7
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Contd ... Q. No. 7(b)
Required:
(i) What is the quarterly break-even-point in units sold and in sales amount?
(ii) Without resorting the computations, what is the total CM at the break-even point?
(iii) How many units would have to be sold each quarter to earn a ~arget profit of Tk.
90,000? Use the CM method.
(iv) Compute the company's margin of safety both in taka and percentage terms.
(v) What is the CM ratio? If sales increase by Tk. 50,000 per quarter and there is no
change in the fixed expenses, by how much would you expect net income increase?
(c) Cape Air flies medium sized passenger jet on a route between Washington, DC; and
Cape Cod. The manager of the airline would like to estimate the relationship between the
plane's payload (i.e., total weight of passengers and cargo) and total fuel costs. On five
recent flights, the payload varied between 22 tons and 35 tons. (7)
Payload (tons) Fuel (Cost)
Flight 1 35 $ 780
Flight 2 26 720
Flight 3 33 765
Flight 4 28 735
Flight 5 22 700
Using the least-squares regression method estimate the variable cost per ton and the fixed
cost per flight.
8. (a) Xavier Computer Company has two support departments and two operating
Budgeted 11,00,000
manufacturing
overhead cost Tk.
By Legal Department 1200 3200 4000 8400
Bud eted Ie al hours
By Personnel 400 1200 300 1900
Department Budgeted
ersonnel hours
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Contd ... Q. No.8
(b) Write down the limitations of CVP (Cost-Volume-Profit) analysis and Net Present