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Hbc2117:Cost Accounting Question Paper
Hbc2117:Cost Accounting
Course:Bachelor Of Commerce
Institution: Meru University Of Science And Technology question papers
Exam Year:2012
QUESTION ONE
a) Explain TWO advantages that a manufacturing firm can get on compensating the workers on the basis of group bonus schemes ( 2 Marks) b) Give the considerations which should govern the method of assessing wages in an organization. ( 3 Marks) c) Mr. Loreno is involved in production of cosmetic soap in main factory. The time allowed to make a unit of a cosmetic soap is 6 hours. During the month of June, 2012 Mr. Loreno made 52 units within a time period of 250 hours. Mr. Loreno is compensated at an hourly rate of shs. 50. Calcualte the bonus payable to Mr. Lorena under.
(i) Halsey method (2 Marks) (ii) Halsey weir method (2 Marks) (iii) Rowan scheme (2 Marks) (iv) Rowan scheme (2 Marks) (v) Calculate total take home pay under each method (3 Marks) d) A factory issues a job to an employee A to produce 35 articles. It takes two standard hours to produce each article. Another job is given to employee B to produce 60 articles.
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It takes 1?2 standard hours to produce each article. For every hour saved, a bonus is paid at sh rate of 50% of the base rate which is sh. 200 per hour. The factory works a 40 hour week and overtime is paid at the rate of one and a third. At the end of the week A`s and Bs clock card show 49 and 46 hours respectively and the work is complete. However, three of A articles and three of Bs articles failed to pass inspection due to the use of defective material and in view of this all the articles produced were paid for although as scrap they have no selleble value. Required for both A and B (i) Bonus paid ( 2 Marks) (ii) Total wage due (1 Mark) (iii) Wages cost per unit of article passing inspection (1 Mark)
QUESTION Two ( 20 MARKS)
The following information relates to item X005 stocked by Gitoro Lt for the month of April 2012
DATE RECEIPTS ISSUES UNITS Units Units Shs. 3 2400 18 4 3200 6 2600 20 12 2700 14 3000 22 18 2800 21 20 2200 22 2600 23 25 3800 26 3100 24 27 2500 25 28 3200 26 29 6900
The closing balance for March 2012 was a batch of 3,000 units received at a price of sh. 19
Required: (a) Stores ledge card for item X005 for April 2012 under LIFO method. ( 15 Marks) (b) Closing stock valuation. ( 5 Marks)
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QUESTION THREE ( 10 MARKS)
Discuss the following purposes of cost accounting (a) Cost ascertainment ( 2 Marks) (b) Decision making ( 2 Marks) (c) Evaluation of alternative ( 2 Marks) (d) Planning ( 2 marks) (e) Disclosure of wastes ( 2 Marks)
QUESTION FOUR ( 20 MARKS)
(a) Define the term process costing. ( 2 Marks) (b) Explain the meaning of the following terms as used in process costing. (i) Normal loss (ii) Abnormal loss (iii) Abnormal gain (iv) Equivalent or effective units (v) Waste (vi) Joint product (vii) By product (7 Marks) (c) Unga Bakery Ltd produces bread in two stages. That is preparation stage and the baking stage. The two processes have incurred the following costs in the first quarter of 2012, 60,000 kg of raw materials were put in the preparation stage. A kilogram of the material is purchased at sh. 10 per unit. There were no losses. Preparation Baking Stage stage
Indirect materials 270,000 55,000 Labour 150,000 100,000 Overheads 120% of labour costs
Required: (i) Process account ( 4 Marks) (ii) Baking process account ( 4 Marks) (iii) Finished goods account
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