Chapter#1

CONCEPT OF MANAGEMENT AND FUNCTION OF THE CONTROLLER

Fill In The Blanks

1) ____________ is that force which guides management in achieving objectives by

comparing performance with policies and decisions.(Ans. Control)

a)Planning
b)management
c)control.

2) The use of budgets particularly in connection with the control phase f

management ,has been termed ___________ (budgetary control)

3) _____________ is the key to managerial job and the basis for responsibility.
(authority)

a) Authority
b) Leadership
c) Management

4) _____________ is essentially the establishment of the framework within which

required activities are to be performed and by whom. (Organizing)

5) In Planning phase cost accounting deals with the _______.

a) Past
b) Present
c) Future
Chapter#2
FINANCIAL STATEMENTS: THE BASES FOR PLANNING AND CONTROL

Q1) The cost department of Eagle Corporation prepared the following data and costs
of the Direct material for the year 2008.

Direct Material Opening 50,000

Purchases ?
Transportation In ?
Direct Material available for use 83750
Direct material closing ?
Direct Material Consumed 51150

Required: Calculate the

i) Direct Material Closing Balance
ii) Purchases and Transportation in (25% of purchases)

SOLUTION:

i)Direct Material Closing = Direct Material available for use- Direct Material Consumed

=>83750-51150=32600

ii) Direct M. available for use –D.M. opening =33750(125%)

Purchases = 33750x 100/125=27000

Transportation In= 33750-27000=6750,
or,
27000x25/100=6750.
Q2) The cost department of XYZ Corporation prepared the following data and costs of
the Direct material for the year 2008

Direct Material Opening 55,200

Purchases ?
Direct Material available for use 95200
Direct material closing ?
Direct Material Consumed 79200
Direct Labour ?
FOH 108000

Total Manufacturing Cost 245200

Required: Calculate the missing figures.

Ans. Purchases = 40000

D.M Closing =16000
Direct Labor = 58000
Q3) The cost department of Abc Corporation prepared the following data and costs of
the Direct material for the year 2008

Direct Material Consumed ?

Direct Labour ?
FOH 41500

Total Manufacturing Cost ?

Required: Find Out

i) Total Manufacturing cost
ii) Direct Material Consumed
iii) Direct Labor

When Conversion Cost is 91200 and Prime Cost is 144,500.

Solution:
i) Conversion cost – FOH = DL= 49700
ii) Prime Cost-DL= DM
iii) DM+DL+FOH= Total manufacturing Cost

Q4) The Following data relate to the AZ Corporation

Sales 255000
Marketing and Admin Expenses 20500
Income 158000
DL 15000
FOH 28000

Required :
i) COGS
ii) Gross Profit
iii) Direct Material

SOLUTION:

Sales 255000
Less: COGS (76500)
Gross Profit 178500
Less:Expenses (20500)
----------
Income 158000

iii) DM
COGS-FOH-DL=DM= 33500

Q5) The Following data relate to the Hussain & Co.

WIP opening 216800

Finished Goods ending 125000
Prime cost 525000
Conversion Cost 385400
FOH 205000

Required: Find COGS

SOLUTION:
Conversion Cost – FOH = DL
Prime Cost – DL= DM

Then make the Statement of COGS with the given data.