ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD

(Department of Business Administration)

WARNING
1. PLAGIARISM OR HIRING OF GHOST WRITER(S) FOR SOLVING
THE ASSIGNMENT(S) WILL DEBAR THE STUDENT FROM AWARD
OF DEGREE/CERTIFICATE, IF FOUND AT ANY STAGE.
2. SUBMITTING ASSIGNMENT(S) BORROWED OR STOLEN FROM
OTHER(S) AS ONE’S OWN WILL BE PENALIZED AS DEFINED IN
“AIOU PLAGIARISM POLICY”.
Course: Cost Accounting (8408) Semester: Autumn, 2022
Level: BBA

Total Marks: 100 Pass Marks: 50

ASSIGNMENT No. 1
Q. 1 In what ways does a typical manufacturing business differ from a merchandising
concern? In what ways are they similar? (20)

Q. 2 Data Analysis, manufacturing statement, cost terminology: (20)

O’Reilly Manufacturing, Inc.’s cost of goods sold for the month ended July 31 was
$345,000. The ending work in process inventory was 90% of the beginning work in
process inventory. Factory overhead was 50% of the direct labor cost. Other
information pertaining to O’Reilly’s inventories and production for the month of
July is as follows:
Beginning inventories, July 1:
Direct materials $ 20,000
Work in process 40,000
Finished goods 102,000
Purchases of direct materials during July 110,000
 Ending inventories, July 31:
Direct materials 26,000
Work in process ?
Finished goods 105,000

Required:
1. Prepare a statement of cost of goods manufactured for the month of July. (Hint:
Set up a statement of cost of goods manufactured, putting the given
information in the appropriate spaces and solving for the unknown
information).
2. Prepare a schedule to compute the prime cost incurred during July.
3. Prepare a schedule to compute the conversion cost charged to Work in Process
during July.

Q. 3 Recording materials transactions (20)

Mystic Manufacturing Company maintains the following accounts in the general
ledger: Materials, Work in process, Factory Overhead and Accounts Payable. On
June 1, the materials account had a debit balance of $5,000. Following is a
summary of materials transactions for the month of June:
1. Materials purchased, $23,750.
2. Direct materials requisitioned to production, $19,250.
3. Direct materials returned to storeroom, $1,200.
4. Indirect materials requisitioned to production, $2,975.
5. Indirect materials returned to storeroom, $385.
a. Prepare journal entries to record the materials transactions.
b. Post the journal entries to ledger accounts (in T-account form).
c. What is the balance of the materials inventory account at the end of the
month?

Q. 4 What are the sources for posting direct labor cost to (a) individual jobs in the job
cost ledger and (b) the work in process account in the general ledger? (20)

Q. 5 Cost of completed units and ending inventory (20)

Gold Giant Products Inc., cans peas and uses an average cost system. For the
month of November, the company showed the following:
Peas completed and canned................................................. 245,000 pounds
Peas in process at the end of November: 100% complete as to
Labor and overhead, 0% complete as to cans...................... 16,500 pounds
Cost data:
Peas ......................................................... $0.10 per equivalent pound
Labor......................................................... $0.25 per equivalent pound
Overhead.................................................... $0.15 per equivalent pound
Cans ......................................................... $0.07 per can
Each can contain 16 oz or 1 lb of peas.
Required:
1. Calculate the cost of the completed production for November.

2
 2. Show the detailed cost of the ending inventory for November.

ASSIGNMENT No. 2
Total Marks: 100 Pass Marks: 50

This assignment is a research-oriented activity. You are required to obtain information

from a business/commercial organization and prepare a report of about 1000 words on
the issue allotted to you to be submitted to your teacher for evaluation.

You are required to select one of the following issues according to the last digit of your
roll number. For example, if your roll number is P-3427180 then you will select issue # 0
(the last digit): -
ISSUES:
Process Costing:
1. Material — Costing and Quantitative Tools of Inventory Management
2. Labor Plans and Incentive Schemes
3. F.O.H Departmentalization
4. Budgeting Techniques and Types
5. F.O.H Variance Analysis
6. Batch Costing
7. Contract Costing
8. Use of Standards
9. Cost Accounting in Service Organization

The report should follow the following format:

1. Title page
2. Acknowledgements
3. An abstract (one-page summary of the paper)
4. Table of contents
5. Introduction to the issue (brief history & significance of issue assigned)
6. Practical study of the organization (with respect to the topic)
7. Data collection methods
8. SWOT analysis (strengths, weaknesses, opportunities & threats) relevant to the
issue assigned
9. Conclusion (one-page brief covering important aspects of your report)
10. Recommendations (specific recommendations relevant to issue assigned)
11. References (as per APA format)
12. Annexes (if any)

Guidelines for Assignment # 2:

 1.5 line spacing
 Use headers and subheads throughout all sections
 Organization of ideas
 Writing skills (spelling, grammar, punctuation)
 Professionalism (readability and general appearance)

3
 Do more than repeat the text
 Express a point of view and defend it.
Workshops
The workshop presentations provide students opportunity to express their communication
skills, knowledge & understanding of concepts learned during practical study assigned in
assignment # 2.

You should use transparencies and any other material for effective presentation. The
transparencies are not the presentation, but only a tool; the presentation is the combination
of the transparencies and your speech. Workshop presentation transparencies should only
be in typed format.

The transparencies should follow the following format:

1. Title page
2. An abstract (one page summary of the paper)
3. Introduction to the topic
4. Practical study of the organization (with respect to the topic)
5. Data collection methods
6. SWOT analysis (strengths, weaknesses, opportunities & threats) relevant to the
issue assigned
7. Conclusion (one page brief covering important aspects of your report)
8. Recommendations (specific recommendations relevant to issue assigned)

Guidelines for workshop presentation:

 Make eye contact and react to the audience. Don't read from the transparencies or
from report, and don't look too much at the transparencies (occasional glances are
acceptable to help in recalling the topic to cover).
 A 15-minute presentation can be practiced several times in advance, so do that until
you are confident enough? Some people also use a mirror when rehearsing as a
substitute for an audience.

Weightage of theory & practical aspects in assignment # 2 & workshop presentations

Assignment # 2 & workshop presentations are evaluated on the basis of theory & its
applicability. The weightage of each aspect would be:
Theory: 60%
Applicability (practical study of the organization): 40%

4
 COURSE OUTLINE

Course: Cost Accounting (8408) Course Code: 8408

Level: BBA Credit Hours: 03
Unit. 6: Labor Costing
6.1 Basics for Labor Cost Control
6.2 Labor Performance Reports
6.3 Incentive Wage Plans
6.4 Recording Labor Costs
6.5 Use of computers in calculation of labor costs

5
Unit. 7: Planning and Control of Factory Overhead
7.1 Factory Overhead (Pre-determined rate, applied & actual)
7.2 FOH Variance Analysis
7.3 The Concept of Departmentalization
7.4 Departmental Overhead Rates and Variances
7.5 Overhead Departmentalization in Non-Manufacturing Business
Unit. 8: Budgeting
7.1 Definition, Advantages of Budgets
7.2 Principles of Budgeting
7.3 The Master Budget - A Network of Inter-relationship
7.4 Sales, Production and Cash Budgets
7.5 Zero-based Budgeting
7.6 The concept of Flexible Budget - Different Dimensions
Unit. 9: Control Through Standard Costs
9.1 Standard Cost Defined
9.2 Comparison of Budgets and Standards
9.3 Setting Standards - Ideal Versus Practical Standards
9.4 Variances, calculation and analysis
9.5 Responsibility and Control of Variances
Recommended Books:
Title Author Publisher
1. Cost Accounting – Matz – Usury National Book Foundation,
Planning and Control Islamabad
Latest Edition

2. Managerial Accounting 5th Ray H. Garrison Irvine, USA.

Edition

