PUNJAB COLLEGE CHAKWAL

Class BQ1 Subject Cost A/c Date 8-2-2021

Time 3 Hrs. MID TERM 2021 T.M 100

Note: Q. 1 is compulsory and attempt, any four questions from rest of Questions.
All Questions carries equal Marks.

Q.1 Short Questions

1. Cost Accounting 2. Normal Loss in Process Costing

3. Process Costing 4. Abnormal Loss in Process Costing

5. Applied FOH 6. Financial Statements

7. Difference b/w Cost & Expense 8. Variable Cost
9. Opportunity Cost 10. Material inventory (opening) = Rs.
50,000 Material purchased = Rs. 200,000 Material inventory (Ending) = Rs.300, 00
Material used =?

Q.2 The five brother’s corporation submits the following information and asks
you to prepare a simple income statement for the year ended December 31, 2014.

Beginning inventory (at sales price) -------------------- 9, 000

Purchase during the period (at cost) -------------------- 105, 000

Closing inventory (at sales price) -------------------- 7, 000

Sales (at sales price) -------------------- 152, 000

Selling expenses amounted to 10% of the selling prices, and the general
administrative expenses amounted to 5% of the selling price.

Q.3 The book and record of the Aamir Manufacturing Co. presents the
following data for the month February:

Direct labor cost Rs. 14, 000 (140% of F.O.H)

Cost of goods sold Rs. 56, 000

Inventory account showed these opening and closing balances:

February 01 February 28

Raw Material 8000 8600

Work in process 8000 12, 000

 Finished goods 14, 000 18, 000

Marketing expenses Rs. 3200, General Admin Expenses Rs.2400. Sales Rs. 75, 000

Required: An income statement with supporting schedule showing cost of goods

manufactured and sold statement.

Q.4 The Maira Manufacturing co. manufactures a home appliance. The sale
price is Rs. 280 last year, company sold 2000 of these appliances, realizing a gross
profit of 25% of the cost of goods sold. Of this cost of goods sold, material
accounted for 40% of the total and factory overhead 15%.

During the coming year, it is expected that material and labor cost will each
increase by 25% and F.O.H by 12 ½ %. To meet this rising cost a new selling prices
of Rs. 325 and Rs. 350 have been tentatively set.

Required: Compute the number of units that must be sold out to realize the same
total gross profit in the coming year as ware realized last year.

Q.5 A product requires processing in three departments. In the third

department materials are added doubling the number of units. The
following data relate to the operation of Department 3 for May.

Units received from department 2 = 10, 000 units

Units transferred to finished store room = 16, 000 units

The balance of units was still in process (100% complete as to material, 50%
complete as to labor and overhead).

Cost transferred from Department 2 = Rs. 15, 000

Cost added by the department: Rs.

Material Cost 4400

Labor Cost 4500

F.O.H 3600

Required: a) A cost of production report for department 3 for May.

Q.6 Usman Company uses three departments in manufacturing of its products.

The costs in department 2 for the month of May were:

Rs. 7504 for labor used

Rs. 3500 for manufacturing expenses

30, 000 units were received from Dept. 1 at a cost of Rs. 92, 220 during the month.
Of the units to be accounted for in dept. 2; 25, 000 units were completed and
transferred to dept. 3. 1000 units were completed and on hand in department No 2
and 3000 units were in process, 2/3 completed at labor and manufacturing
expenses.

Required: A cost of production report including the quantity schedule and

computation of equivalent production figure.