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Cost Accounting I Question Paper

Cost Accounting I

Course:Bachelor Of Commerce

Institution: Kenyatta University question papers

Exam Year:2010

KENYATTA UNIVERSITY
UNIVERSITY EXAMINATIONS 2009/2010
OPEN, DISTANCE AND E-LEARNING EXAMINATION FOR THE DEGREE
OF BACHELOR OF COMMERCE
BAC 202: COST ACCOUNTING I

DATE: Monday 19th July 2010 TIME:
11.00a.m – 1.00p.m

INSTRUCTIONS

1)
Answer ALL the four questions

2)
Answers should be logical and complete

3)
Marks are indicated at the end of every question
Q1.
a)
List and describe four methods of pricing materials issue. [8marks]

b)
Itemize the advantages of each of the methods.

[8marks]

c)
Which of the methods would you recommend for perishable goods.

Explain why.

[4marks]
Q2.
An analysis of the time card of a worker on a machine showed that of the 48

hours, he worked 45 hours (including 4 hours overtime) on production and that of

3 hours was idle because of machine break-down. The rate of the worker is sh 1.

per hour: but overtime is paid at half the normal rate for extra hours worked.

Required:
a)
Allocation of the total wages paid to the worker between

i)
Direct wages, and

[5marks]

ii)
Indirect wages.

[5marks]

b)
Provide reasons for the above allocation.
[5marks]
Q3.
A work order for 500 units of a product has to pass through four different

machines of which the machines hour rates are:

Machine

Rate Per hour (sh).

I

1.25

II

3.00

III

4.00

IV

2.50

The expenses were incurred on the work order included:

Page 1 of 2

Materials

sh. 20,000

Labour

sh. 1,500

Machine

Hours worked

I

200

II

300

III

240

IV

100

After executing the work order, materials worth sh.1000 were returned to stores.

Office overheads were estimated at 60% of work cost. 10% of the production

were discarded for being unsatisfactory, for which half the amount was realized

from sale in the junk market.

Required:
Find out the selling price per unit if a 20% profit on selling

price is desired.

[20marks]
Q4.
Beta Manufacturing Company provided the following information for their

operations for 2007.

Standard cost per unit of product.

Sh.

sh.

Direct material

60

Direct labour

80

Variable Overheads

20

Fixed Overheads

40

200

Units

Opening stock

20,000

Production

180,000

Closing stock

40,000

Sales

160,000

Selling and Administrative expenses
Sh.

Variable

4,000,000

Fixed

2,000,000

Selling price per unit

300

Required:
a)
Profit and loss s statement using:

i)
Absorption, and

[5marks]

ii)
Marginal costing techniques.
[5marks]

b)
Reconciliation of profit/loss figures above. [5marks]

Page 2 of 2

Cost Accounting I Question Paper

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