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Cost Accounting (Acct 219) 2Nd Trimester 2012 Question Paper
Cost Accounting (Acct 219) 2Nd Trimester 2012
Course:Bachelor Of Business Information Technology
Institution: Kenya Methodist University question papers
Exam Year:2012
COST ACCOUNTING (ACCT 219) 2ND TRIMESTER 2012
KENYA METHODIST UNIVERSITY
END OF 2ND TRIMESTER 2012(EVENING) EXAMINATIONS
SCHOOL : BUSINESS AND ECONOMICS
DEPARTMENT : ACCOUNTING AND FINANCE
UNIT CODE : ACCT 219
UNIT TITLE : COST ACCOUNTING
TIME: 2 HOURS
Instructions:
Answer question one (compulsory) and any other two questions.
Question One
Differentiate between a budgets and forecast.
(4mks)
Explain the functions of a cash budget to an organization of your choice.
(6mks)
Describe the main factors which affect the stock levels in an organization.
(10mks)
The following information was obtained from the records of Mali ya Mungu Enterprises for the year 2007.
Maximum consumption 6,000,000 units
Minimum consumption 4,000,000 units
Lead time 5-7 weeks
Re- order quantity 30,000,000 units
Required
Re-order level
(2mks)
Minimum stock level
(3mks)
Maximum stock level
(3mks)
Average stock level
(3mks)
Question Two
Describe the advantages of FIFO method of valuing material issues. (4mks)
The following details were extracted from the stores ledger of Smart Strategies Ltd, a manufacturing company in Runda for the month of April 2018.
Date Transactions
April 2 opening stock 400 units valved at sh. 1600
4 received 200 units @ shs. 5 each
10 Issued 500 units
16 Received 300 units @ shs 6 each
20 Issued 300 units
24 Received 400 units @ shs. 4 each
30 Issued 200 units
Required
Prepare a stores ledger card and show the value of closing stock on 30th April 2018 using the following methods.
FIFO
(5mks)
LIFO
(5mks)
Weighted average method.
(6mks)
Question Three
Kings Ltd a manufacturing company has provided you with the following information for the month of October 2008.
Stock on 1st October 2008 shs.
Raw materials 40,000
Work – in progress 12,000
Finished goods 20,000
Stock on 31st October 2008
Raw materials 35,000
Work-in-progress 17,000
Finished goods 23,000
Purchases of raw materials for October 250,000
Factory wages 80,000
Salaries of supervisors 30,000
Factory rent 10,000
Power 5,000
Sundry factory expenses 15,000
Office salaries 13,000
Sundry office expenses 7,000
Salesmen’s salaries 18,000
Sundry selling expenses 6,000
Sales 500,000
Required
Prepare a production cost statement.
(12mks)
Prepare a profit statement.
(8mks)
Question Four
Describe the duties of a cost accountant in an organization. (4mks)
Differentiate the following terminologies
Relevant costs and irrelevant costs.
(4mks)
Cost centre and cost unit.
(4mks)
Semi-fixed and semi variable cost.
(4mks)
Sunk costs and product cost.
(4mks)
Question Five
Briefly explain the following terms as used in process costing:
Normal loss.
(2mks)
Abnormal loss
(2mks)
Joint products.
(2mks)
Titans Ltd produces a detergent which passes through two processes namely mixing and refining to completion. The following data relates to the retining process for the month of June 2000.
Cost of opening stock. Shs. 100,000
Labour shs. 25,000
Overheads shs. 60,000
During the month 20,000 units were passed from the mixing to the refining process. Costs incurred during the month were.
Labour shs. 125,000
Overheads shs. 108,100
Other materials shs. 45,300
At the end of the month 21,000 units had been completed and passed to finished goods while 4000 were still in process having reached the following stages:
Materials 100%
Labour 40%
Overheads 60%
Required
Refining process account. (14mks)
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