MGT402 7 Solved Papers by Zoya

Spring 2009

MGT402- Cost & Management Accounting (Session - 2) Solved By Zoya

Helper Honey G

Q1. D Corporation uses process costing to calculate the cost of manufacturing Crunchies. During the month 12,500 units were completed, 1,500 units remained in work in process at 25 percent completed. How many equivalent units are produced? (1 marks)

1. 12,500 units
2. 12,875 units
3. 14,250 units
4. 12,125 units

1500 ka 25 %age loo that is 375………2500+375=12875

Q2. Greenwood petroleum has the data for the year was as follow: (1 marks)

Opening WIP 26,000 barrels. Introduced during the year 67,000 barrels Closing WIP 15,000 barrels.

How many barrels were completed and transferred out of work-in-process this period?

1. 67,000 barrels
2. 78,000 barrels
3. 82,000 barrels
4. 93,000 barrels

26000+67000-15000=78000

Q3. During the year 50,000 units put in to process.30, 000 units were completed. Closing WIP were 20,000 units, 70% completed. How much the equivalent units of output would be produced? (1 marks)

1. 20,000 units
2. 30,000 units
3. 36,000 units
4. 44,000 units

30000+ ( 20000* 0.70) = 44000

Q4. What would be the effect on the cost of a department in case of normal Loss? (1 marks)

1. Decreased
2. Increased
3. No effect
4. Increase to the %age of loss

for referemce see the page no. 60 of handouts

Q5. When 10,000 ending units of work-in-process are 30% completed as to conversion, it means: (1 marks)

1. 30% of the units are completed
2. 70% of the units are completed
3. Each unit has been completed to 70% of its final stage
4. Each of the units is 30% completed

The cost of charging raw material into finished aue semi finished products . Conversion cost including wages other direct production cost and the production over head

Q6. In order to compute equivalent units of production, which of the following must be reasonably estimated? (1 marks)

1. Units
2. The percentage of completion
3. Direct material cost
4. Units started and completed

Q7. In a job order cost system, the use of direct materials would be recorded as a debit to: (1 marks)

1. Finished Goods inventory
2. Manufacturing Overhead
3. Raw Materials inventory
4. Work in Process inventory

The periodic grand total are debited to work in process and factory overhead -control accounts and credited to materials control account. Hand out page no 126

Q8. If management predicts total direct labor costs of Rs. 100,000 and total overhead costs of Rs. 200,000, what is its predetermined overhead rate based on direct labor costs? (1 marks)

1. 50%
2. 100%
3. 200%
4. Cannot be determined

200000/100000=2 multiply by 100...=200%

Q9. P Ltd applied overheads on the basis of direct labor hours. The overhead applied rate for the period has been based on budgeted overhead of Rs.150, 000 and 50,000 direct labor hours. During the period overhead of Rs. 180,000 were incurred and 60,000 direct labor hours were used. (1 marks)

Which of the following statement is correct?

1. Overhead was Rs.30,000 over applied
2. Overhead was Rs.30,000 under applied
3. No under or over applied occurred
4. None of the given

180000 / 60000 = 3 150000 / 50000 = 3 option

Q10. Raymond Corporation estimates factory overhead of Rs. 345,000 for next fiscal year. It is estimated that 60,000 units will be produced at a material cost of Rs. 575,000. Conversion will require 34,500 direct labor hours at a cost of Rs. 10 per hour, with 25,875 machine hours. (1 marks)

FOH rate on the bases of Prime cost would be?

1. Rs. 37.5 per unit
2. Rs. 56.6 per unit
3. Rs. 60 per unit
4. Rs.1 per unit

prime cost = DMC+DLC+DExp... DMC=575,000+ Conversion Cost .34,5000=920000 345000/920000= 3.75 multiply by 100=37.5

Q11. Nelson Company has following FOH detail. (1 marks)

Budgeted (Rs.) Actual (Rs.)

Production Fixed overheads 36,000 39,000 Production Variable overheads 9,000 12,000 Direct labor hours 18,000 20,000

What would be the amount of under/over applied FOH

1. Under applied by Rs.1,000
2. Over applied by Rs.1,000