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Agbm 210: Costing And Accounting For Projects Question Paper
Agbm 210: Costing And Accounting For Projects
Course:Bachelor Of Science In Community Development
Institution: Chuka University question papers
Exam Year:2013
CHUKA
UNIVERSITY
UNIVERSITY EXAMINATIONS
SECOND YEAR EXAMINATIONS FOR THE AWARD OF
BACHELOR OF SCIENCE (COMMUNITY DEVELOPMENT)
AGBM 210: COSTING AND ACCOUNTING FOR PROJECTS
STREAMS: BSC (CDEV) Y2S2 TIME: 2 HOURS
DAY/DATE: TUESDAY 23/4/2013 2.30 PM – 4.30 PM
INSTRUCTIONS:
ANSWER QUESTION ONE AND TWO OTHER QUESTIONS.
QUESTION ONE: (30 MARKS)
(a) Outline the role of accounting in the management of projects. [6 Marks]
(b) The following trial balance was extracted from the books of Mr. Josiah, an entrepreneur
in Meru town as on 31st December 2009.
Dr Cr
Land and Buildings 8000
Motor vehicle 6000
Stock (1.1.2009) 3000
Sales 50000
Returns inwards 2000
Returns outwards 1000
Discount received 2000
Discount allowed 1500
Debtors 5000
Furniture 4000
Bad debts 2000
General expenses 3000
Salaries & wages 4000
Drawings 12000
Capital 8500
Loan 10000
Creditor s _____ 7000
78500
===== 78500
=====
Additional information:
(i) Closing stock amount to Sh. 2000
(ii) Depreciation is provided on motor vehicles and furniture at 10% on cost.
Required:
Prepare a trading profit and loss account for Mr. Josiah’s business for the year ended 31/12/2009. [12 Marks]
(c) (i) Describe six desirable characteristics of a successful incentive wage plan.
[6 Marks]
(ii) The finance department of CAD project operates Halsey Weir bonus scheme for
its workers. During the week ended 3rd February 2011, Galonel (an employee) whose hourly rate of pay is Sh.18 was assigned the following jobs for which he completed.
Job No Time Taken Time Allowed
J 130 38 45
J 140 30 40
Required:
Compute Gabriel’s total remuneration for the week. [6 Marks]
QUESTION TWO (20 MARKS)
(a) Prepare a duly balanced three column cash book for J, Mukaria given the transactions below. [7 Marks]
2013: January 1st : Balance b/f – cash 5000
- Bank 1500 Dr
3rd : Cash sales Sh. 6400
12th : Banked cash sh.7000
18th : Paid mwenda, a supplier his account of SH. 8000 by cheque after deducting 2% cash discount.
20th : Received Sh.3000 in cash from sera (a debtor) after allowing her sh.50 cash discount.
21st : Paid rent sh. 4000 by cheque
25th : Banked all cash except sh.1000 for emergency.
(b) Explain the following stock control levels.
(i) Economic order quantity
(ii) Minimum stock level
(iii) Re-order level
(iv) Maximum stock level [8 Marks]
(c) The following information relates to material used for production project.
Annual requirements 1.0 million units
Ordering costs Sh. 1000 per order
Holding costs Sh. 100 per unit
Safety stock None
Calculate:
(i) The EOQ [2 Marks]
(ii) Number of orders in one year [1 Mark]
(iii) Total cost of the material (disregard stock – out cost) [3 Marks]
QUESTION THREE (20 MARKS)
(a) Explain the distinction between the following cost classifications
(i) Fixed cost and variable cost
(ii) Direct cost and indirect cost
(iii) Controllable cost and non-controllable cost [6 Marks]
(b) Kate had the following assets and liabilities as on 30th April 2012.
Ksh
Creditors 39500
Equipment 11500
Motor vehicles 62900
Stock 61500
Debtors 57700
Cash at bank 172800
Cash in hand 4000
During the first week of May 2012, Kate:
(i) Brought stock on credit from Njoka fashion store sh. 70,000
(ii) Paid rent by cheque sh.8000
(iii) Received sh. 30,000 by cheque from debtors.
(iv) Paid creditors sh. 20,000 by cheque.
(v) Purchased new equipment by cash sh. 4000
(vi) Obtained one year loan form family bank sh.150,000 through business bank account.
(vii) Sold stock worth sh. 80,000 on credit to Mwangi.
(viii) Withdrew sh.1000 from bank for personal use.
(ix) Put in business an extra sh. 20,000 cash as capital.
Required:
(i) Compute Kate’s capital as at 30th April 2012. [2 Marks]
(ii) Draw up a statement of financial position as on 7th May 2012 after the above transactions have been completed. [6 Marks]
QUESTION FOUR (20 MARKS)
(a) Identify five users of accounting information and explain their specific needs.
[5 Marks]
(b) Explain the following accounting concepts and conventions
(i) Business entity concept
(ii) Cost concept
(ii) Materiality
(iv) Accounting period [8 Marks]
(c) What factors should be considered while designing an effective costing system?
[7 Marks]
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