W-TAMASIL SENIOR HIGH SCHOOL Name: ………………………………………

DEPARTMENT OF BUSINESS CLASS Date of exams……/………/…………….

MOCK EXAMS JUNE, 2022 Class:………………………………………
SUBJECT: PRINCIPLES OF COST Index No:…………………………….
ACCOUNTING
1
Class: Form Three (3) Duration: 3 hours
2

While you are waiting, write your name, date of exams, class and index number in the spaces provided at the right
corner of this booklet and thereafter, read the following instructions carefully.

SECTION A: THEORY
Answer Two (2) questions from this section
Q1. a) Explain the following stock control levels
i. Maximum stock level ii. Minimum stock level iii. Recorder stock level
b) Identify three factors each to be considered in fixing the following stock level
i. Maximum stock level ii. Minimum stock level iii. Recorder stock level
c) What is cost accounting? 15marks

Q2. a) i. what is process costing?

ii. What is contract costing?
b) Explain the following
i. Srap ii. Waste iii. By-product iv. Abnormal loss 15marks

Q3. a) What is labour turnover?

b) Identify five causes of labour turnover
c) Explain the following
i. cost unit ii. Cost Centre iii. Unit cost 15marks

Q4. a) Explain the following

i. Basic standard ii. Ideal standard iii. Current standard
b) Identify three characteristics each of direct cost and indirect cost
c) What is cost variance? 15marks
SECTION B: PRACTICALS
Answer three (3) questions in from this section
Q5. Cost data obtained from the books of Abigail Arthur and Sons Limited for the month of June, 2021 is as
follows; (material store)
Maximum Stock Level 105,000 units
Normal Usage 15000 units
Maximum Lead Time 4 months
Minimum Lead Time 2 months
Re-order quantity 35000 unit
Maximum usage 25000 units
You are required to calculate
(a) Normal Lead Time b) Re-order level
c) Maximum stock level d) Minimum usage 15marks
Q6. The following relate to a contract undertaken by Ajongolo Construction Limited which began on 1st
January
GH₵000
Materials purchase 400,000
Hire of machine 120,000
Materials on site 31/12/2014 100,000
Cost of plant purchases 900,000
Overhead recovered 30,000
Wages paid 150,000
Wages of crane drivers due 80,000
Value of work satisfied 1300,000
Sub contract work 20, 000
Materials transferred to contract 50,000

At the end of the year 2014, the plant was depreciated by 20% per annum on cost. A retention of 10% was
agreed. You are required to prepare the following
a) Contact account b) Contractee’s Account 15marks

Q7. Mr. Adu Paul Company manufactures one product called Fear Women Ointment. The standard cost of
product of one unit is calculated as follows;
Materials: 20kg @Le300/kg 6000
1500
Labour: 6hrs @Le250/kg
7500
2500
Production overhead
10000
For the month of September 2016, 800unit were produced. A total of 14,400kg of materials were purchased
and used at a total cost of Le5, 040,000.
A total cost of Le1, 120, 000 was paid as wages for the 4000.
You are required to calculate;
a) Total material cost variance analysed into price variance and usage variance.
b) Total labour cost variance analysed into rate variance and efficiency 15marks

END OF PAPER

GOOD LUCK!!!

SUBJECT MASTER
REV. ALHAJI K TWO