Cost Accounting 1 chee Raw Material 1. Palmer Product Ltd is involved in the manufacture of motor cycle parts.

The following information are available : Material used is 8000 units Carrying cost is $ 1 per unit. Ordering cost is $10 What is the economic order quantity (EOQ), the total carrying costs, the total ordering costs and the total costs? 2. The following information is available on component x for the month of January : Maximum usage 200kg Minimum usage 100kg Reorder period 2 to 4 months Reorder quantity 400kg Calculate : The order level, the maximum stock level, the minimum stock level, the average stock level 3. Using the following figures calculate : i. reorder level ii. Reorder quantity Budgeted consumption : Maximum 3000 kg per week Minimum 1600 kg per week Maximum stock level : 26800kg Estimated delivery period : Maximum 8 week Minimum 4 week. Labour 1. The details below relate to Mr. Kutty on Job No. 39. The direct wages rate is $1 per hour. The time allowed is 50 hours. The time taken is 40 hours. Calculate the basic wage, bonus pay and total pay based on : a. The Halsey 50% scheme b. The Halsey Weir 33 1/3% scheme c. The Rowan scheme. 2. The standard production for Uno Factory Ltd is 24 units a day. A group of 10 employees work on the assembly line. For every 20% increase in production a bonus of $60 will be shared equally by the group. On day 13, 30 units were produced. How much will each member of the group receive? 3. The following information is available on Department 3 of Ershard Manufacturing Ltd for a period of six months. Number of people employed at the beginning of the period 36 Additions to the workforce during the period 7 Number of employees who left during the period 5

Cost Accounting 2 chee What is the labour turnover rate? 4. The following information relates to worker Doe on job No 13 for week 1 Rate of play $1 per week Time allowed 35 hours Time taken 31 hours Calculate Doe`s remuneration based on : a. Halsey Weir schemes b. Rowan scheme c. The effective hourly rate of pay for week 1 Overhead 1. Marten Ltd is divided into 4 departments. A and B are production departments, X and Y are service departments. The actual costs for a period are as follows : Repair and maintenance to plant 500 Depreciation of plant 1000 Rent 1200 Supervision 800 Power 400 Plant insurance 600 Lighting 500 Canteen 1000 The following information is available with respect to the4 departments : Dept A 2000 30 10 35000 Dept B 1500 30 15 30000 Dept X 1000 20 15 20000 Dept Y 500 20 10 15000

Area (sq. metre) Number of employees Effective horse power Plant value ($)

How should the overhead costs be apportioned? 2. The following information is available on Bolkiah Engineering Ltd. Budgeted production overhead $45000 Budgeted direct material cost $15000 Budgeted direct labour cost $45000 Budgeted labour hours 30000 Budgeted machine hours 22500 Budgeted output (units) 3000 During a particular period, a job was produced details of which are as follows :

Cost Accounting 3 chee Material cost Labour cost Labour hours Machine hours Calculate: $10 $25 15 7.5

a. The various methods of overhead absorption b. The overhead absorbed by the job under each of the overhead absorption methods calculated under 1. 3. The following is the budgeted data for Azlan Ltd for January, 19-18 Production overhead $12000 Direct labour hours 8000 The actual results for January, 19-18 was : Production overhead $10000 Direct labour hours 8200 Calculate over/under absorption of overhead. Show the cost accounting entries. 4. Prepare a schedule showing the allocation of overheads between departments x, y and z of Krisha Dutt Ltd. The overheads for the year to 31 December, are as follows: Electricity 1280 Power 500 Plant depreciation 600 Plant insurance 150 Rent 1500 Material handling charges 1000 Repair and maintenance 500 The following information is also available : Department X Y Z Direct wages 12000 8000 15000 Material used 4000 4000 8000 Plant value 2000 1000 3000 Floor are(sq. feet) 1000 800 200 Number of direct operatives 25 15 10 Number of machines 20 30 50 5. Avril ltd operates 3 production departments x, y and z and two service departments a and b. during the last financial year the department overhead absorption rates used were: X 70% on departmental direct labour costs Y $1.50 per machine hour Z $0.60 per direct labour hour Allowance is made in the rates for apportionment of the costs of the two service departments. The overhead costs for the year were as follows:

Cost Accounting 4 chee X 3600 960 1800 Y 6000 2160 2760 Z 1800 360 1320 A 4800 240 1080 B 2400 120 1800

Indirect wages and supervision Repairs and maintenance Indirect material

Power 900 Rent and rates 9600 Lighting and heating 6000 Depreciation- plant 12000 - fitting 300 Insurance plant 2400 - buildings 600 The following data is available : Department Effective Area Value of Value of Direct Labour h.p occupied plant fittings hours cost (sq.ft) X 80 4000 12500 2000 28800 41000 Y 180 8000 30000 1000 41000 60600 Z 30 6000 3750 4000 40400 48400 A 10 1000 3750 2000 B 1000 1000 The cost of service department A and B are allocated to other department on percentage: Basis viz A B X 20 20 Y 50 60 Z 20 10 A 10

Machine hours 24000 43200 4000 -

B 10 -

You are required to : 1. prepare an overhead analysis sheet showing the distribution of overhead costs to the departments 2. show the over/under absorption of overheads during the year. 3. State the factors which gave rise to the over/under absorption.