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Cost Accounting 1 Question Paper

Cost Accounting 1

Course:Bachelor Of Commerce

Institution: Kenyatta University question papers

Exam Year:2009

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

QUESTION ONE:
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]

QUESTION TWO:
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]

QUESTION THREE:
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:

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]

QUESTION FOUR:
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

Cost Accounting 1 Question Paper

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