TY BCOM (A.Y. 2022-23) Sem.

V
Cost Accounting Assignment

Material Cost
Q.1 Prepare a Stores Ledger Account from the following information adopting FIFO and
weighted average method of pricing of issues of materials. 2016 March
1. Opening Balance 500 tonnes @ Rs200
3. Issue 70 tonnes
4. Issue 100 tonnes
5. Issue 80 tonnes
13. Received from suppliers 200 tonnes @ Rs190
14. Returned from Department A 15 tonnes.
16. Issued 180 tonnes
20. Received from supplier 240 tonnes @ Rs195
24. Issue 300 tonnes
25. Received from supplier 320 tonnes @ Rs. 200
26. Issue 115 tonnes
27. Returned from Department B 35 tonnes
28. Received from supplier 100 tonnes @ Rs.200

Q.2 The stock of material held on 1-4-2022 was 400 units @ 50 per unit. The following
receipts and issues were recorded. You are required to prepare the Stores Ledger Account,
showing how the values of issues would be calculated through FIFO and weighted average
method.
2-4-2022 Purchased 100 units @`55 per unit
6-4-2022Issued 400 units 10-4-2015 Purchased 600 units @ `55 per unit
13-4-2022 Issued 400 units
20-4-2022 Purchased 500 units @ `65 per unit.
25-4-2022 Issued 600 units
10-5-2022 Purchased 800 units @ `70 per unit
12-5-2022Issued 500 units
13-5-2022 Issued 200 units
15-5-2022 Purchased 500 units @ `75 per unit
12-6-2022 Issued 400 units
15-6-2022 Purchased 300 units @ ` 80 per unit

Q. 3 From the following information prepare store ledger & find out the value of closing
stock as per FIFO and Weighted Average Cost Method. The stock in hand of a material as on
1st March, 2022 was 5000 units at Rs. 20 per unit.
Date Transaction Units Rate per unit (Rs.)
2 March Sales 3,000 30
7 March Purchases 8,000 22
8 March Purchases 4,000 23
12 March Sales 3,000 40
14 March Purchases 4,000 25
26 March Sales 6,000 45

Shortage of 15 units was found on 31st March 2022.Ou of Purchases of 7th March 100 units
were returned to the supplier on March 10th.

Q.4 Compute the Inventory turnover ratio from the following:

Opening Stock – Rs.10,000 Closing Stock – Rs.16,000 Material Consumed – Rs.78,000
Q.5 From the following data for the year ended 31st Dec, 2016, calculate the inventory
turnover ratio of the two items, and put forward your comments on them
Material A Material B
Amount (Rs.) Amount (Rs)
Opening stock on 1-1-2016 10,000 9,000
Purchase during the year 2016 52,000 27,000
Closing on 31-12-2016 6,000 11,000

Q.6 The components A and B are used as follows:

Normal usage .... 300 units per week each
Maximum usage .... 450 units per week each
Minimum usage .... 150 units per week each
Reorder Quantity .... 2,400 units; B 3,600 units.
Reorder period .... A 4 to 6 weeks, B 2 to 4 weeks.
 Calculate for each component: (a) Re-order Level (b) Minimum Level (c) Maximum Level
(d) Average Stock Level.
Q.7 Calculate the Economic Order Quantity from the following information. Also state the
number of orders to be placed in a year.
Consumption of materials per annum: 10,000 kg
Order placing cost per order: Rs. 50 Cost per kg. of raw materials: Rs.2
Storage costs: 8% on average inventory
Ans. EOQ = 2,500kg.
No. of orders to be placed in a year= 4 Orders per year
Q.8 The average annual consumption of a material is 18,250 units at a price of ` 36.50 per
unit. The storage cost is 20% on an average inventory and the cost of placing an order is ` 50.
How much quantity is to be purchased at a time?
Q.9 Two components A and B are used as follows:
Normal usage = 50 per week each
Re-order quantity = A- 300; B-500
Maximum usage = 75 per week each
Minimum usage = 25 per week each
Re-order period: A - 4 to 6 weeks; B - 2 to 4 weeks
Calculate for each component (a) Re-order level; (b) Minimum level; (c) Maximum level; (d)
Average stock level

Labour Cost
Q.1. From the following particulars, calculate the earnings of workers X and Y and also
comment on the labour cost.
Standard time allowed: 20 units per hour
Normal time rate: Rs.30 per hour
Differential Rate to be applied: 80% of piece rate when below standard
120% of piece rate at or above standard. In a particular day of 8 hours, X produces 140 units
while Y produces 165 units.

Q.2 X, Y and Z are three workers working in a manufacturing company and their output
during a particular 40 hours week was 96, 111 and 126 units respectively. The guaranteed
rate per hour is Rs.10 per hour, low piece rate is `4 per unit, and high piece rate is Rs.6 per
unit. High task is 100 units per week. Compute the total earnings and labour cost per unit
under Taylor,& Merrick plan system.
Q.3 Calculate the total earnings and effective rate of earnings per hour of three operators
under Rowan System and Halsey System from the following particulars.
The standard time fixed for producing 1 dozen articles is 50 hours. The rate of wages is
Rs.1/- per hour. The actual time taken by three are as follows:- A 45 hours B 40 hours C 30
hours.
Q.4 A Worker worked in a factory and he is getting his wages where company is following
Halsey method (50%) of Remuneration. A worker’s weekly wages is Rs 1,440 for 48 hours
plus cost of living bonus is Rs 10 per hour. He is given task which he is expected to
complete in 8 hours. He could complete that task in 7 hours. What would be his total hourly
rate of earnings? Also calculate his total earnings if company would have opted Rowan Plan.
Q.5 Calculate earnings of a worker under Halsey premium Plan and Rowan Premium Plan
from the following:
Time taken 60 hours
Time allowed 75 hours
Hourly rate Rs 25 per hour
Dearness allowance Rs 50 per day of 8 hours work

Q.6 A worker produced 200 units in a week’s time, the guaranteed weekly wages payment
for 45 hours is Rs 405. The expected time to produce one unit is 15 minutes which is raised
further by 20% under incentive scheme. What will be the earnings per hour of that worker
under Halsey (50% sharing) and Rowan Bonus Scheme?

Q.7 From the following information, calculate the earnings of a worker under the Halsey
Premium Plan (50% of time saved) and Rowan Premium Plan separately.
Time taken to complete job 72 hours
Time allowed to complete job 90 hours
Per hour rate of wages Rs 25
Dearness Allowance Rs10 per day of hours work.

Q.8 Mr. Ashish, an employee of the company gets the following emoluments, and benefits:
Basic wages Rs 40,000 per month
Dearness allowance 90% of basic
Employee’s contribution to provident Fund 12% of basic
Cost of amenities Rs 600 per month
Bonus 10% of basic
Other allowances Rs 45,000 p.a.
He works for 2,800 hours per annum, out of which 800 hours are nominal idle time.
Employer’s contribution to P.F. is at equal rate with employees contribution. Amar worked
40 effective hours on a job – ‘A’ where the cost of direct material is Rs 60,000 and overheads
are 50% of combined cost of material and labour. The sale value of job is quoted to earn
profits 20% on sales.
You are required to find out Mr. Ashish’s total earnings, Effective hourly cost of Mr. Ashish
and the Expected sales value of job – ‘A’.

Q.9 Mr. Vasudeo, an employee of XYZ Ltd. Gets the following emoluments and benefits:
Basic wages Rs 42,000 per month
Dearness allowance 50% of Basic
Employees Contribution to Provident Fund 10% of Basic
Employees Contribution to E.S.I. 4% of Basic
Bonus 20% of Basic
Other Allowances Rs 36,000p.a.
Mr. Vasudeo works for 2,000 hours per annum, out of which 200 hours are normal idle time.
Employer’s contribution to State Insurance (E.S.I) and P.F. are at equal rate with employees
contribution. Mr. Vasudeo worked 25 effective hours on a Job NO. 5 where the cost of direct
material is Rs 60,000 and overheads are 80% of combined cost of material and labour. The
sale value of job is quoted to earn profits 20% on sales.
You are required to find out effective hourly cost of Mr. Vasudeo and expected sales value of
Job NO. 5.

Overheads
Q.1 A factory has 3 production departments (P1, P2, P3) and 2 service departments (S1 &
S2). The following overheads & other information are extracted from the books for the month
of January 2016.
Expense Amount (Rs)
Rent 6,000
Repair 3,600
Depreciation 2,700
Lighting 600
Supervision 9,000
Fire Insurance for stock 3,000
ESI contribution 900
Power 5,400
 Particulars P1 P2 P3 S1 S2
Area sq ft 400 300 270 150 80
No. of 54 48 36 24 18
workers
Wages 18,000 15,000 12,000 9000 6000
Value of 72,000 54,000 48,000 6,000 -
plant
Stock Value 45,000 27,000 18,000 - -
Horse Power 600 400 300 150 50
of Plant
Allocate or apportion the overheads among the various departments on suitable basis.

Q.2 In an Engineering Factory, the following particulars have been extracted for the quarter
ended 31st December 2015. Compute the departmental overhead rate for each of the
production departments, assuming that overheads are recovered as a percentage of direct
wages.

Production Depts. Service Depts.

A B C X Y
Direct Wages (Rs) 30,000 45,000 60,000 15,000 30,000
Direct Material 15,000 30,000 30,000 22,500 22,500
No. of workers 1,500 2,250 2,250 750 750
Electricity KWH 6,000 4,500 3,000 1,500 1,500
Assets Value 60,000 40,000 30,000 10,000 10,000
No. of Light points 10 16 4 6 4
Area Sq. Yards 150 250 50 50 50
The expenses for the period were:
Rs.
Power 1,100
Lighting 200
Stores Overhead 800
Welfare of Staff 3,000
Depreciation 30,000
Repairs 6,000
General Overheads 12,000
Rent and Taxes 550
Apportion the expenses of Service Dept. Y according to direct wages and those of Service
Department X in the ratio of 5: 3: 2 to the production departments
Q.3 The ‘Prabhat Ltd.’ is divided into two production cost centers A and B, and two service
cost centers X and Y. The following is the summary of overhead costs for a particular period.
Works Manager’s Salary Rs.4,000; Power Rs.21,000; Contribution to PF Rs.9,000; Rent
Rs.6,000; Plant Maintenance Rs.4,000. Canteen expenditure Rs. 12,000; Depreciation of
Plant and Machinery `Rs. 20,000.
The following information is made available from the various departments.
DEPT.A DEPT. B DEPT. X DEPT. Y
No. of Employees 16 8 4 4
Area Sq. Ft. 2,000 3,000 500 500
Value of Plant (Rs) 75,000 1,00,000 25,000 —
Wages (Rs.) 40,000 20,000 10,000 5,000
Horse Power 3 3 1 —
Apportion the costs to the various departments on the most equitable basis.
Q.4 From the following particulars given below compute Machine hour rate for a machine.
a. Cost Rs. 24,000
b. Scrap value Rs. 4,000
c. Estimated Working life 40,000 hours
d. Estimated cost of repairs and maintenance during the whole life Rs.2,000
e. Standard charges of the shop for 4 weekly period `Rs.3,000
f. Working hours in 4 weekly period 100 hours
g. No.of machines in the shop each of which is liable for equal charge are 30 machines.
h. Power used per hour 4 units @ 10p. per unit
Q.5 From the following information calculate Machine Hour rate for the Machine
Particulars Rs.
Purchase price of the machine 4,50,000
Installation charges 50,000
Rent per quarter 30,000
General lighting for total area- Per Month 2,000
Insurance Premium for the machine per year 6,000
Foreman salary per annum 60,000
Estimated repairs for machine per annum 18,000

Power: 2 units per hour @ Rs. 500 per 1,000 units.

Estimated life pf Machine 10 years
Estimated scrap value at the end of 10th Year Rs. 1,00,000
Machine is expected to run for 20,000 hours during its life time.
Machine occupies 25% of the total area and foreman devoted 1/6 of his time for machine.

Answer the following questions.

1. Distinguish between Financial Accounting and Cost Accounting.
2. State and explain objectives and advantages of Material Control.
3. What is Labour Turnover? what are its cause?
4. What are the main features of Halsey Premium Bonus Plan and Rowan Premium
Bonus Plan?
5. Explain classification of cost on different basis with the help of chart.
6. What are the advantages & limitations of Cost Accounting?

Write short note on:

1. Limitations of Financial Accounting
2. Economic Order Quantity
3. Features of Cost Sheet and Statement of Cost
4. Functional Classification of Overheads
5. Functions of Cost Accounting
6. Labour Idle Time
7. Reasons for differences between financial profit and costing profit.
8. Allocation of overheads
9. Bin Card
10. Time keeping & Time Booking
11. Time rate System and piece Rate System