MY today's mgt402 Subjective papers. 5 Questions
Q1: (3 Marks)
During the month of August 2009, 25,675 units were completed and transferred to next department. 1,000 units were lost during the process and 5,000 units were still in process (100% material, 60% labour & FOH).
Required:
Prepare Quantity schedule with the help of given data for Department 1.
Ans of Q1:
BWIP + Unites Started = EWIP + Completed + Losses
0 + 31675 = 5000 + 25675 + 1000
| | Material | Conversion Cost |
| Unites Completed | 25675 | 25675 |
| Ending Work In Progress | 5000 | (5000*.6) = 3000 |
| Loss | 1000 | 1000 |
| | | |
| | | |
| | | |
| | | |
Q5:(5 marks)
Sufyan & Sons’ Overhead Budget for the month together with data relating to cost centers is as follow:
Overhead Cost Rs.
Electricity Consumption 2,600.00
Rent Of factory 142
Depreciation Of machinery 6,500.00
Machine Groups
Bases for Apportionment. Q R S T TOTAL
Kilowatt Hours 2,505.00 2,203.00 44,500.00 5,500.00 54,708.00
Floor Space(Sq Ft) 998.00 890.00 560 650 3,098.00
Capital Cost Of plant 2,350.00 1,550.00 6,500.00 12,000.00 22,400.00
Required: Apportion each of the cost given to the four groups of machine on suitable bases.
Q2:(3 Marks)
Blanket rate is used as a single rate throughout the production activity which is not always feasible for evaluating the performance of each department separately. You are required to suggest the rate that is used in this situation. Elaborate the concept.
Ans of Q2:
Blanket overhead application is based on one type of activity for example, direct labor hours. All type of overheads are allocated based on the same rate. This leads to an unreasonable application of overheads on production unites. Specially when more than one product is being used. Alternative approach is to accumulating different cost in different cost pools and allocating them using appropriate cost drivers as the basis.
Example:
Number of runs made by a driver from store to production dep. Could be an appropriate base to allocate material handling cost.
Q4:(5 Marks)
Patacake Ltd. produces a certain food item in a manufacturing process. On 1st November, there was no opening stock in process. During November, 500 units of material were put in to process, with a cost of Rs. 9,000. Units completed and transferred-out were 400 units. Direct labor cost in November was Rs. 3,840. Production overhead is absorbed at 200% of direct labor costs. Closing stock on 30th November consisted of 100 units which were 100% completed as to materials and 80% completed as to labor and overhead.
Required:
Prepare the Quantity Schedule.
Calculate the Equivalent production units for material, labor and FOH for the month of November.
Ans of Q4:
Quantity Schedule:
BWIP + Unites Started = EWIP + Unites completed
0 + 500 = 100 + 400
Cost Schedule:
Material D.Labour FOH
This Period 9000 3840 7680
Equivalent Unites of Production:
Material D. Labor FOH
Unites completed 400 400 400
EWIP 100 80 80
Total 500 480 480
Q3: (Marks 3)
Cost of materialconsumed under FIFO method is Rs. 4,200. Conversion cost is Rs. 15,000. 1,200 units of the product were manufactured out of which 900 units were sold at Rs. 25 each. There were no beginning and ending inventories of work in process and finished goods.
Required: Calculate Net profit under FIFO method. (Show necessary working)
(Ans of Q3)
Conversion Cost = 15000
Material = 4200
Total Factory cost = 19200
Unites manufactured = 1200
Per Unit Cost = 19200 / 1200
Per unit cost = 16
Contribution = 25 – 16 = 9 * 900
Net Profit = 8100
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