i) The standard costs must be estimated accurately and correctly.
ii) These must be revised from time to time.
iii) The costs must be based on expected standard costs.
iv) The variance between standard costs and actual costs must be analyzed and the tolerance limits must be also specified.
v) The main causes for variances beyond tolerance limits must be explained clearly.
Wilfykil answered the question on August 6, 2019 at 09:26
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Discuss the Types of standards in the cost accounting context
(Solved)
Discuss the Types of standards in the cost accounting context
Date posted:
August 6, 2019
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Answers (1)
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Show the difference between Historical cost and Standard cost
(Solved)
Show the difference between Historical cost and Standard cost
Date posted:
August 6, 2019
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Compare and contrast on Budgetary Control and Standard Costing
(Solved)
Compare and contrast on Budgetary Control and Standard Costing
Date posted:
August 6, 2019
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Answers (1)
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Define the term Standard costing
(Solved)
Define the term Standard costing
Date posted:
August 6, 2019
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What does Standard Costing involve?
(Solved)
What does Standard Costing involve?
Date posted:
August 6, 2019
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Answers (1)
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During a period 3000 units of a main product were produced at sh 60 per unit.
(Solved)
During a period 3000 units of a main product were produced at sh 60 per unit. Total production were sh 125000. A by product was produced together with main product. This by-product was 100 units and it was sold for sh 55 per unit post separation cost of this by product were sh 500. Calculate the production cost and profit of the main product.
Date posted:
August 6, 2019
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Answers (1)
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The following data relates to three products XYZ
(Solved)
The following data relates to three products XYZ
Required:
Calculate profit made by each product apportioning joint costs on;
i) Sales value bases
ii) Physical unit bases
Date posted:
August 6, 2019
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Answers (1)
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In a specific period production and cost data was as follows:
(Solved)
In a specific period production and cost data was as follows: Production was 1,600 full complete units and 400 partly complete units. The degree of completion of the 400 units WIP was as follows:
Required:
a) Calculate total equivalent unit
b) Cost per unit of complete units
c) Show the value of W.I.P
Date posted:
August 6, 2019
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Answers (1)
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Using the data given below, show process 1 account where normal loss has a scrap value of sh1.8 per kilo.
(Solved)
Using the data given below, show process 1 account where normal loss has a scrap value of sh1.8 per kilo.
In the manufacture of product vitality 2000 kgs of material at kshs 5kg were supplied to process 1. Labour cost amounted to sh 3,000 and production overheads sh 2,300, normal loss has been estimated at 10% . The actual product after process was 1750kg.
Date posted:
August 6, 2019
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Answers (1)
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In the manufacture of product vitality 2000 kgs of material at kshs 5kg were supplied to process 1.
(Solved)
In the manufacture of product vitality 2000 kgs of material at kshs 5kg were supplied to process 1. Labour cost amounted to sh 3,000 and production overheads sh 2,300, normal loss has been estimated at 10% . The actual product after process was 1750kg.
Required: Prepare process 1 account
Date posted:
August 6, 2019
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Answers (1)
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What is meant by Process loss scrap and waste?
(Solved)
What is meant by Process loss scrap and waste?
Date posted:
August 6, 2019
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Answers (1)
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Njenga Limited is a construction Co. whose financial year end is 31st March.
(Solved)
Njenga Limited is a construction Co. whose financial year end is 31st March. The information provided was extracted from the books of the company in contraction with three construction contracts undertaken by the company during the financial year ended 31st March 2005
Required:
Using the percentage of completing method of accounting for long term construction contract:
1. Calculate profit/less realized on each contract for the year ended 31st March 2005.
2. Prepare profit and loss extract for each contract for year ended 31st March 2005.
3. Prepare balance sheet extract as at 31st March 2005.
Date posted:
August 6, 2019
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Answers (1)
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A small bridge is to be constructed by the beginning of the year at a fixed price of sh 900,000 with estimates contract cost of...
(Solved)
A small bridge is to be constructed by the beginning of the year at a fixed price of sh 900,000 with estimates contract cost of sh 750,000 in year one. The following summaries are presented:
Required:
a) Prepare a statement showing the profit recognized in each year.
b) Balance sheet extract.
c) Journal entries to account for the extraction
Date posted:
August 6, 2019
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Answers (1)
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HZ Construction Company acquired a contact for the construction of a dual carriage way from Nairobi at cost of 200 million.
(Solved)
HZ Construction Company acquired a contact for the construction of a dual carriage way from Nairobi at cost of 200 million. The data relating to the contract for year ended 31st December 2009 was as follows:
The company had received from the client payment amounting to 126 million.
Required:
(i) Contract account
(ii) Contractee account
(iii) Balance sheets extract showing work in progress.
Date posted:
August 6, 2019
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Answers (1)
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Give and explain cases where job costing is applied
(Solved)
Give and explain cases where job costing is applied
Date posted:
August 6, 2019
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Answers (1)
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A company manufactures products L and M using the same equipment and similar processes. An extract of the production data for these products in one...
(Solved)
A company manufactures products L and M using the same equipment and similar processes. An extract of the production data for these products in one period is as follows.
Required:
Calculate the production overhead to be absorbed by one of each other product using the following costing methods.
(a) A traditional costing approach using direct labour hour rate to absorb overheat.
(b) An activity based costing approach using suitable cost drivers to trace overheads to products.
Date posted:
August 6, 2019
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Answers (1)
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Gome Engineering Ltd. Employees job order cost system. The company use predetermined overheads rates in rime manufacturing overheads to jobs.
(Solved)
Gome Engineering Ltd. Employees job order cost system. The company use predetermined overheads rates in rime manufacturing overheads to jobs. The following additional information is presented by the company‟s cost accountant.
1. The company has two departments P and R. The predetermined overhead rates is based on machine hours for Dept P and direct labour cost for Dept R. As at 31st January 2003 the cost accountant made the following estimates for the year.
2. The companies cost records show the following information on job YJ 648.
Required:
a) Complete the predetermined overhead rates that should be used during the year in Dept P and R.
b) Compute the total overhead cost applied in job EFJ 648.
c) Calculate the cost of job FJ 648 and the cost per unit if the job containers 120 units.
d) As at 31st Dec 2003 the company records revealed the following information in relation to each department.
Calculate the amount of under / over applied overheads in each department and for the company as a whole.
Date posted:
August 6, 2019
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Answers (1)
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Discuss the Overhead Absorption
(Solved)
Discuss the Overhead Absorption
Date posted:
August 6, 2019
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Answers (1)
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Explain the purposes of overhead cost analysis
(Solved)
Explain the purposes of overhead cost analysis
Date posted:
August 5, 2019
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Answers (1)
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Define the following terms:
(Solved)
Define the following terms:
1. Allocation
2. Apportionment
3. Reapportionment
4. A reciprocal service charge
5. Absorption
Date posted:
August 5, 2019
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Answers (1)