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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]
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