It employs 30 professionals (5 partners and 25 associates) who work directly with its clients. Problem 5 (a) The quantity and cost data belonging to Department Y of Albari Company for the month of July is presented below: Quantity data: Units received from department X: 24,000 2,000, Annual cost of carrying inventory (including interest) 10% of cost. Its like you wrote the book on it or something. Process Costing-Problems and Solution - Free download as Word Doc (.doc), PDF File (.pdf), Text File (.txt) or read online for free. 32,054; FOH Rs. You are required to determine the Economic Order Quantity and frequency of orders p.a. overhead. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Copyright 2017-2025 Accountancy Knowledge. Rate of stock issued on 10.12.88 = Rs. The accounts of Basudev Manufactures Ltd. for the year ended 31st December 1988 show the following: Prepare a Cost Sheet for the year ended 31.3.86 from the following figures extracted from the books of Best Engineering Co. Materials purchased 2,50,000, Wages paid 2,00,000, Carriage inward 2,000, Consumable Stores 10,000, Wages of Storekeeper 7,000, Depreciation of Plant & Machinery 10,000, Materials destroyed by Fire 5,000, Repairs & Renewals 5,010, Office Managers Salary 10,000, Salary to Office Staff 20,500, Printing & Stationary 10,000, Power 10,500, Lighting for Office Building 2,000, Carriage outward 3,000, Freight 5,000, Entertainment 2,500, Warehousing charges 1,500, Legal charges 2,000, Expenses for participating in Industrial exhibition-6,000. 4 = 4.00 + 1.00 = Rs. The manufacturing cycle takes a month. The following details for January 1992 are available: Stock in processes is valued at Prime Cost and Finished Stock at the price at which it is received from process III. These units were 60%. (i) Variable overhead changed with production unit. The pre-separation point costs are apportioned to joint products according to weight. Find the values of issues and resulting stocks on different dates using (i) LIFO. You appear to know a lot about this. 3. Wage Payment 5. 6.00/2 = Rs. The normal costing formula is: Normal cost = Materials + Labor cost + (Labor hours x Overhead rate) Paul knows from his inventory costs that $200,000 worth of direct materials are in those. Component B = 300 units + 600 units (25 units x 2 weeks) activity-based-costing-problems-and-solutions 2/5 Downloaded from www.webmail.bluemaui.com on by guest Secondary Distribution 7. (a) Contract No. Product A passes through two processes I and II and then to Finished Stock. = 450 units + 300 units (25 units x 4 weeks) (iv) Dearness Allowance per month = 100% of piece wage. >> Practice Multiple-choice Question Costing MCQS. Reviewof Chapters 13and 14 Clark Co. uses normal absorption job-order costing. For more details, see our Form CRS, Form ADV Part 2 and other disclosures. = 1.50 x 40,000 units = Rs.60, 000 d. Prohibited Content 3. 11,000. M/s Pine Corporation undertook a contract for Rs. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. The following information relates to the Julius Inc. for the year ended December 31, 2020: Job No. A product passes through three processes before it is transferred to Finished Stock. Current period costs were tk. Save my name, email, and website in this browser for the next time I comment. It contains 469 problems and solutions with explanatory notes and hints at appropriate places. Before publishing your articles on this site, please read the following pages: 1. Normal working hours of the machine is estimated at 1,200 but during the year it actually worked for 1,000 hrs. A consignment of 10,000 mangoes was sent to the consignee at 60 per kg and freight of 50,000. You are obviously very knowledgeable. 2. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Copyright 2017-2025 Accountancy Knowledge. Cost Accounting Problems on Labour Hour Rate (3 Problems): 6. It was found that since the date of signing of the contract the price of material and rate of wages increased by 25%. I enjoyed your post. From the following information, find the profit made by each product apportioning joint cost on sales value basis: Product A = 1,32,000/2,20,000 1,67,600 = 1,00,560, Product B = 88,000/2,20,000 1,67,600 = 67,040. In this article we have compiled various cost accounting problems along with its relevant Solutions. The units completed by the four workers were as under: A = 950 units, B = 900 units, C = 960 units, D = 850 units. labor and tk. During the period 39000. units were inspected for rework. 5 will not be considered as it has already been exhausted). The following are the details supplied by J.K. After . C = Carrying cost per unit = 25% of Rs. The allocation base for assembly support costs is direct labour-hours. 15,000; Closing Stock Rs.7,000. cost transformation in the industry s new normal. The percentage of rejection, which is 10% in Process B, means that the input in Process B should be 1,200 pieces plus 10% (i.e., 1,320 pieces). 535,000F Factory Overhead Cost Applied Rs. During the period, 500 units were rejected as spoiled. And because transformation begins from within, we're seeking the people to . 225000, labor tk. You are obviously very knowledgeable. During 1993, work was begun on an additional 18000 units. Article shared by : ADVERTISEMENTS: In this article we have compiled various cost accounting problems along with its relevant Solutions. Material Y = 365 / 29.3 = 12.5 days (approx.). 2,500. Carbon Collective's internet-based advisory services are designed to assist clients in achieving discrete financial goals. = 19,800 gms. A manufacturer uses 75,000 units of a particualr material per year. MATERIAL VARIANCE Problem - 1: A manufacturing concern, which has adopted standard costing, furnished the following information: . During, the period, works on additional 50000 units were started. Setting standard costs is relatively simple because it is done entirely by accountants. In this problem, we show three process for converting raw material into finished stock. I enjoyed reading what you had to say. Service industry, job costing, law firm. Following data is available for preparing Cost of Production Report for three departments: Hello there, You have performed a fantastic job. 2. Terraria One is a Multiplayer Server that has many different features to improve the Terraria Terraria Supreme Buffed 20 Frost Hydra . Economic Ordering Quantity 3. 1. Units placed in production 430,000 Units Complete 400,000 Units still process at the end 60% complete as to Material and 75% complete as to conversion cost. 5.00 + Rs. There were no inventories at beginning of the March 2018. Great post! Labour Hour Rate 6. Calculation for Profit to be charged to P/L A/c. Cost Accounting Problem on Wage Payment (2 Problems): 5. Prepare the Store Ledger for the month of January 2007. After reading this article you will learn about cost accounting problems on: 1. I most certainly will highly recommend this blog! Carbon Collective does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Carbon Collectives web site or incorporated herein, and takes no responsibility therefor. Its like you read my thoughts! Normal, rework is considered 1% of the units surviving the inspection. It means, we have to make three process account. True is a Certified Educator in Personal Finance (CEPF), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics. Previous Lesson: Joint Venture Problems and Solution, Next Lesson: Cost of Goods Sold Solved Problems. Beginning inventor Rs. It involves recording and monitoring raw materials used to produce finished goods and services. Your email address will not be published. Report a Violation, Cost Accounting Problems on Economic Ordering Quantity, Cost Accounting Problems on Labour Hour Rate, Cost Accounting Problems on Secondary Distribution, Cost Accounting Problems on Incentive Schemes, Cost Accounting Problems on Idle Capacity Cost, Cost Accounting Problems on Batch Costing, Cost Accounting Problems on Contract Costing, Cost Accounting Problems on Process Costing, Cost Accounting Problems on Normal Loss, Abnormal Loss and Abnormal Gain, Cost Accounting Problems on Equivalent Production, Cost Accounting Problems on Apportioning Total Process Costs, Top 4 Problems on Labour Turnover with Solutions | Cost Accounting, Top 5 Problems on Overhead with Solutions | Cost Accounting. 360000 for material; tk. = 75 units x 6 weeks = 450 Units, Maximum Level = Re-order Level + Re-order Quantity (Minimum consumption per day/per week etc. of orders 5,000 + Rs. The cost of holding a doll is Rs. Normal Business hours 7:30am to 4:00pm. The unit costs on a normal costing basis are as follows: Manufacturing costs (per unit): Less: Overapplied overhead (13,200 - 5,500) Select - 7, Select - 333, Gross profit . 150; Salaries Outstanding Rs. Materials are added at the beginning of the. From the following, you are required to calculate for each employee: (a) The bonus hours and amount of bonus earned; (c) The wage cost of each good unit produced. 100. What is abnormal wastage? As a lower capacity level is chosen the fixed cost per unit increasesAs a lower capacity level is chosen, the fixed cost per unit increases . 500; Financial Charges Rs. XYZ Ltd. obtained a contract for Rs. 21000 for labor and tk. If you don't have that friend we have plenty of women in our community who would love to be that friend for you. 10 and that the set-up cost per batch is Rs. 18. Cost of raw material per pc.= 19.80 / 1,000 = $0.0198. The Prince Corporation has two production departments and maintains a process cost system. Disclaimer 9. Units are again inspected when, they are 90% complete. Calculate total monthly remuneration of workers A, B, C and D on the basis of the following information for the month of January 2007: (i) Standard Production for each worker = 1,000 units. of set-up per annum = Annual Production/EBQ, Time interval between two consecutive optimum runs, (c) Minimum inventory holding cost per annum. Variable Costing and Absorption Costing Problems with solutions - cost accounting and control / managerial accounting. Annual consumption: 40,00,000 kgs Cost of placing one order: $100 Cost of carrying one kg of raw material for one year: $0.50 Required Calculate the economic order quantity (EOQ). Related: 18 Characteristics of an Entrepreneur (Explained). Total Assets value = Rs. = 12 months / 8 orders Solution: Problems # 2: Ascertain Gross Profit / Loss form the following figures: Closing Stock Rs. = 6,400 units / 800 units Material Y = 32,200 / 1,100 = 29.3 times (approx. In a factory bonus system, bonus hours are credited to the employee in the production of time taken which time saved bears to time allowed. Standard costs are the least usable from a management perspective, since the costs used may not equate to actual costs. (iii) Finished Stock 40,030. 5,000, respectively. Accounting Print Email. I enjoyed reading this. 6.00 + Rs. If Terry makes each coffee table for $80.00 and wants to markup all items at a 100% rate, he would sell the coffee table for $160.00. Units are again inspected when they are 70% complete. Youve made my day! Answer: It is a method of cost determination and is used manufacturing concern where raw material passes through many processes up to finished goods. Process costing uses equivalent units to account for units that are partially complete. Past performance does not guarantee future results, and the likelihood of investment outcomes are hypothetical in nature. 1. 8. 14400 for overhead. The cost of placing an order is Rs. You allow yourself some time (not much) to grieve and eat chocolate. variable costing, . 230000 for overhead. At the end of a particular week the time sheet of a worker is summarised below: Calculate the gross wages (including bonus and D.A.) Management considers 10% of the number of. Process 1 account will show raw material and wages and closing stock and gross profit on closing stock and balancing figure will be transfer amount for second process. The components used for the normal costing to derive the cost are actual costs of material, actual costs of labor and standard overhead rate that are used for allocation purpose. of orders per year = Annual consumption / Size of one order Cost Accounting Problems on Store Ledger (4 Problems): 4. Using the absorption method of costing, the unit product cost is calculated as follows: Direct materials + Direct labor + Variable overhead + Fixed manufacturing overhead allocated = $25 + $20 + $10 + $300,000 / 60,000 units = $60 unit product cost under absorption costing. . 3,000, Depreciation = 12% of Rs. Great read. 648. to say fantastic blog! She -was The company uses the weighted average process costing. selling overhead per unit in 2007, = Rs. Investing in securities involves risks, and there is always the potential of losing money when you invest in securities. 7,50,000 on 1.1.06. Secondary Distribution 7. Batch Costing 10. Profit 25% on cost. Rejected units are returned to 40% level for, During the period 78000 units were inspected for rework. Solution: Material . Grrrr well Im not writing all that over again. Required fields are marked *. Sponsored By Prosoco It wasn't long ago that removing graffiti meant leveraging an arsenal of equipment and productssome of which caused substantial harm to the building. (ii) FIFO; and (iii) Simple Average methods. Component A = 450 units (50 units x 5 weeks) = 200 units Recall that selling and administrative costs (fixed and variable) are . Illustrate their computation by using the following information for a component ZYP. Material costing is a system that measures and records the cost of material consumed during a specified period. Kidman & Associates is a law firm specializing in labor relations and employee-related work. It was installed in a shop over th of its floor area at an additional cost of Rs. Statement showing the evaluation of different elements of production: Do not sell or share my personal information. This activity based costing problems and solutions, as one of the most operational sellers here will enormously be among the best options to review. Since the normal costing makes use of standard overhead rates . Looking for Managerial Accounting Homework help & Textbook Solutions? Labour hours worked = No. 22,000; Closing Inventory Rs. The two important methods of material costing are the first-in first-out method (fifo) last-in first-out method (lifo). I just wrote an incredibly long comment but The figures shown below were taken from the records of John and Co. for the year ended 31 March 2019. Material cost = material cost / quantity * 100. 297,000 Direct Labour Cost used Rs. Ans: Cost per kg = (600,000 + 50,000) / 9,000 = 72 (10000 10% loss) = 9,000 If the unsold quantity is 500 its value will be = 500 72 = 36,000 (Here opening Stock rate i.e. After reading this article you will learn about cost accounting problems on: 1. 4.00 + 25% of Rs. Calculate the factory works cost of the product under: Production department of a company pays its workers standard wages @ Rs. Theres a lot of people that I think would really enjoy your content. This input of 1,200 units for Process C should be the output of process B. = 900 units 50 units = 850 units, (4) Average Stock Level = Minimum Level + 1/2 (Reorder Quantity) Its difficult to find educated people on this subject, however, you seem like you know what youre talking about! 5,500; Sales Return Rs. During the week ending 31st December, 2002, the gang consisted of 40 men, 10 women and 5 boys. The material cost is Rs. Once the 900 direct labor-hours are known for the Laguna Model(June 2004), Anderson can compute the $187,726 cost figure using normal costing. No overtime is worked and payment is made in full for all units worked on, including those subsequently rejected. Please refer to our Customer Relationship Statement and Form ADV Wrap program disclosure available at the SEC's investment adviser public information website: CARBON COLLECTIVE INVESTING, LLC - Investment Adviser Firm (sec.gov). 15,000; Closing Stock Rs.7,000. At the junction of Highway 124 and Highway 87, the portion. THE "MAYFLOWER QUEEN" BEDA HALLBERG, ORIGINATOR OP FLOWER DATS. The TCEQ's rules for public water systems can be found in Title 30, Texas Administrative Code (30 TAC),. Due to fire, Earthquake, flood, war etc. We request that you notify management of any absence in case of emergencies regarding your RV, mail, messages, etc. 9 Manual Transmission problem of the 2006 Toyota Tacoma Failure Date: 05/05/2008 A chirping sound began being emitted from the transmission. Find out the amount of provision to be made to offset the inter-process profits added. With a percentage of rejection of 50%, the input of Process A should be 1,320 plus 50% (i.e., 1,980 pieces). x Max. Other charges are charged as a proportion of direct wages. Value of stock issued on 31.12.88 = Rs. Similarly, 1,320 pieces should be outputted by Process A. Its like you wrote the book on it or something. Rs. 3. Great post! 2,400. 8. Many thanks. From the following information extract Gross Profit and Net Profit: Opening Inventory Rs. By the same authors: Cost Accounting: Theory & Practice Cost Accounting: Fundamentals & Elements Cost Accounting: Methods & Techniques. The cost of material of the product is Rs. Access Free Process Costing Problems And Solutions Principles of Accounting Volume 2 - Managerial Accounting Cost Accounting Multiple Choice Questions and Answers (MCQs): Quizzes & Practice Tests with Answer Key (Cost Accounting Quick Study Guide & Course Review) covers course assessment tests for competitive exams to solve 1100 MCQs. good units completed in a year to be normal to be normal number of units reworked. 60,000, Labour Rs. EOC = 2 75,000 18/0.375 = 2,691 units (approx). Normal capacity and master -budget utilization measure capacity in terms of demand. The workers day rate is Rs. Learn about common problems with automatic transmission linkage components. The problems are: 1. 30000 for. Nice read. Contract Costing 11. Is a Permit Required for . Materials Costing 4. 14,000; Sales Rs. Calcutta Engineering Co. has three production departments X, Y and Z and one service department S. From the following particulars calculate Labour Hour Rate of each of the departments X, Y and Z: There were 125 working days of 8 hours each. Assume there are 300 working days in a year. Rs. An advantage of standard costs is that they simplify costing of inventories and reduce clerical costs. From the following particulars determine the Economic Order Quantity: (i) Annual consumption of materials = 2,000 tonnes; The total cost of the inventory is minimum, when the ordering quantity is 500 units, i.e. Cost Accounting Problems on Incentive Schemes (2 Problems): 8. Good day! Standard Costing Problems And Solutions Standard Costing Problem 6: The standard cost card of a manufacturing concern includes the following particulars: Variable overhead per unit - 2 hours @ 0-30 p. per hour = 0-60 p. Actual operating hours 8,000 hours . Please let me know. Time gap between two consecutive orders = 12 months / No. Component A = 450 units + 400 units (25 units x 4 weeks) 5,000; Opening Stock Rs. Hope it helps. Labour Hour Rate 6. To solve this problem we can use one powerful technique called estimation. Component A = 75 units X 6 weeks = 450 units To Normal Loss a/c (II) To Costing P & L a/c : 255 - 128 507 : By Process II a/c : 255 : 635 : 275 : 635 : 275 : 635 : Solution Other Accounts . You are obviously very knowledgeable. This is an excellent, an eye-opener for sure! 50000 for overheads; Current costs were material tk. The company started the period with 6000, complete, they are inspected for rework. Materials Cost Control 3. The firm ended the year with 5000 units, 20% complete. Determine the actual costs associated with producing products/services, so as to help managers make better decisions about pricing and allocating resources for future operations. Return Inward Rs. 2,500. Material X = 365 / 35.5 = 10.3 days (approx.) Therefore Economic Order Quantity = 500 units. Factory overhead is applied to production at a budgeted rate of 300% of prime costs (direct . The Zee manufacturing company produces a single product which goes through one process only. 23,870. of working days Hours of daily work No. = 450 units 250 units = 200 units. This is normal costing. This information can be tabulated as follows: The weight of the finished product is 10 grams per piece. Apportioning Total Process Costs. Cost Sheet 2. 12,000; Net Purchases Rs. (i) Calculation for Material Cost per unit in 2007, (ii) Calculation for cost per variable selling overhead in 2007, Selling overhead increased by 25% i.e. 525000 for labor and tk. 13 Variable vs. Absorption Costing Problem Calculate the labour hour rate for each of the production departments: Service rendered by the service department to production departments A, B and C is in the ratio of 2: 2: 1, respectively. The city of Los Angeles alone spends Solved Example for Normal Loss in Process Costing 1. Process Costing Problems and Solutions Problem # 1: Solution: Problem # 2: Solution: Problem # 3: Solution: Problem # 4: Solution: Related Topics More Interest Further Readings 18 Comments Submit a Comment Cancel reply Process Costing Unsolved Problems PDF Download Previous Lesson: Economic Order Quantity Problems and Solutions From the following data prepare the Process A/cs: Mukherjee & Co. produces an article through two processes X and Y which is then sent to the finished stock. 1,500; Carriage Inward Rs. x Minimum time required to obtain supplies) and tk. = 850 units 100 units = 750 units Moonlight Engineering Company has three production departments, A, B and C and one service department S. Following are the particulars of a month of 25 working days of 8 hours each. The company should use predetermined FOH rates for correct calculations and control. consumption per day / per week etc. 2. = 8 orders, 3. (2) Two components, A and B, are used as follows: For each component, calculating the following: (1) Reorder Level = Maximum consumption per day/per week etc. Answer: Wastage due to abnormal wastage viz. Solution Task B The annual demand for a product is 6,400 units. 15,000. 5,000. The following data are available for 2006: (b) Prices of materials will go up by 33%. How many units must be made and sold? x Average Re-order period) Material X = 51,500 / 1,450 = 35.5 times (approx.) During the year 2000 units were reworked. Cost Sheet 2. The production statistics for the month were as follow: Units completed and transfer to finished goods store Rs. At the end of the year the following information were collected: The above contract contained an escalator clause: In the event of price of raw material and rates of wages increased more than 10%, the contract price would be increased accordingly by 25% of the rise in the cost of materials and wages beyond 10% in each case.. Labour hour rates = Expenses/Labour hours worked. Component B = 150 units + (1/2 x 600 units) = 450 units. actual cost = direct materials cost + direct labor cost + allocated overhead (labor hours x actual overhead allocation rate) Fred's bestselling table and chairs set uses $125 worth of materials . (iii) Bonus = Rs. Return Inward Rs. 12,000; Net Purchases Rs. Cheney & Partners, a Quebec-based public accounting partnership, specializes in audit services. Store Ledger 4. Step-by-step solution Step 1 of 3 Consumption ratios: The consumption ratio is the comparison of the amount of a flavoring ingredient consumed as a component of basic and traditional meals to the amount of the same item consumed as a flavor enhancer by the same community over the same period of time. 34,800 beyond escalation clause the contract price will be increased by 25% of Rs. Rate of Material = $1 per kg = 750 units 100 units = 650 units, Minimum Level = Re-Order level (Normal consumption per day/per week etc. Note: For more information about the factors that influence stock levels, read the discussion in the previous pages. Units are again inspected when they are 90% complete. I have bookmarked it in my google bookmarks. The unit cost is $6 and the inventory carrying cost is 25% per annum. . Ascertain Purchases from the following figures: Cost of Sales Rs. = 1.5 months. 102 Job No. on 16.12.06 and another shortage of 10 kg on 26.12.06. Overhead costs are, Rejected units are returned to 20% complete point for rework. Now consider how costs are assigned using process costing. They are paid at standard hourly rates as under: In a normal working week of 40 hours, the gang is expected to produce 2,000 units of output. 6,500, Unit in Process on February 31, 2018 was 1,600 (Material 40%, Labor and FOH 20 per cent), Requirement: Prepare the Cost of Production Report at the end of February, 2018. Nice read. ), (4) Number of days average Inventory is held When the units are 60% complete, they are inspected for, rework. The joint products are manufactured in one common process; after which they are separated and may undergo further individual processing. Cost Accounting Problems on Equivalent Production (1 Problem): 14. Normal rework is 3% of, the units inspected. As units move from one production department to another, the costs move along with them. Cost Accounting Problems on Normal Loss, Abnormal Loss and Abnormal Gain (1 Problem): 13. of working days hours of daily work No. Save my name, email, and website in this browser for the next time I comment. 7,500; Rs. No. It is estimated that the carrying cost per T.V. after I clicked submit my comment didnt show up. The valuation of inventory is $1 per kg. 174,250 Raw Material used Rs. Terry can also use the normal cost per unit to determine a markup for sales. Work was begun on another additional 35000 units. of workers, 2. Contents: 1. Summary Definition. Component B = 75 units X 4 weeks = 300 units, (2) Minimum Level = Reorder Level (Normal consumption per day/per week etc. 4-21 Job costing, normal, and actual costing. Incentive Schemes 8. The working life of the machine as also the scrap value was estimated at 10 yrs and Rs. Idle Capacity Cost 9. Privacy Policy 8. There were no inventories at beginning of the March 2018. 005 and Contract No. 17,500 Prepare the. 20,000. Services rendered by the Service Department are to be apportioned to the production departments X 50%, Y 25%, and Z 25%. For a more accurate view of the direction in which product costs are headed, it is better to use actual costs, since they match the current amount of actual overhead costs. The company puts raw material into the process when the product is 50% complete. (adsbygoogle = window.adsbygoogle || []).push({}); >> Read theoretical concepts of Process Costing. Ending. Required fields are marked *. This problem illustrates the treatment of both normal and abnormal losses when they occur at the end of production process. Store Ledger 4. From the following details compute the Machine Hour Rate: It is estimated that the supervisor devotes one-fourth of his time for the machine, the cost of power is Rs. (1) Discuss the consideration that influences the setting of maximum, minimum and reorder stock levels. 052, on 1.1.06 and 1.7.06, respectively. Materials are added at the start, of the process while labor is added when units are 40% complete. There, were 52000 units inspected for rework and 800 units were rejected as spoilage. 25,000, respectively. Chapter 5, Problem 3MCQ is solved. Having said that, the boxes can be entirely different from my '94 E36 and the E46 cars that get the manual transmissions. You call your go to friend and eat chocolate together, let them speak goodness over you, talk things through and pray together. x Minimum Time Required to get supplies) Using weighted average method, find out , Statement of production and Equivalent Units of production, Statement of costs and costs per equivalent unit. Explain the objective of Process Costing method? Your email address will not be published. Economic Order Quantity Problems and Solutions, Functional Budgets Problems and Solutions, Back To Cost Accounting Problems and Solutions, Next To Cost Volume Profit Analysis Problems and Solutions. From the following figures relating to the manufacture of a Electronic Product during the month of July 1990, prepare a statement showing Cost and Profit per unit: Closing Finished Stock= Opening Finished Stock + Production Sales. Interesting content. 2 p.a. If the cost to procure one unit is $75, determine the following: 2. = 450 units (50 units x 5 weeks) TOS 7. Accounting students can take help from Video lectures, handouts, helping materials, assignments solution, On-line Quizzes, GDB, Past Papers, books and Solved problems. (ii) Fixed expenses assumed related with office and administration. Profit on Closing Stock: 40,000/2,40,000 12,000 = 2,000, Profit on Closing Stock = 2,42,000/6,60,000 30,000 = Rs. But only 1% of the units, that survive the inspection is treated as normal spoilage. Ascertain Cost of Goods Sold from the following figures: Purchases Rs. Would you mind if I share your blog with my myspace group? Cost Accounting Problems on Batch Costing (2 Problems): 10. 7,000; Beginning Inventory Rs. 55,000. Fru Beda Hallberg. 34,800 = 8,700. 421680 for overhead. Material X = (1,700 + 1,200) / 2 = 1,450 kgs. Cost Accounting Problems on Inter-Process Profit (1 Problem): 13. Hello there, I discovered your site by means of Google even as looking for a similar matter, your website got here up, it looks great. 19,662-50. per annum will be Rs. Normal spoilage is 1% of the units inspected. Saha & Bose Ltd. has made a contract with Mitra & Das Ltd. to supply 4,800 T.V. During the year 1000 units were, rejected as spoiled. Average inventory = (Opening Stock + Closing Stock) / 2 Copyright 10. Normal rework is considered 1% of the units surviving the inspection. (adsbygoogle = window.adsbygoogle || []).push({}); Ascertain Gross Profit / Loss form the following figures: Closing Stock Rs. Incentive Schemes 8. It is done using one of the flowing two formulas: Formula 1: Lost unit cost = [Cost from preceding department Good units] - Unit cost from preceding department before adjustment Formula 2: Lost unit cost = (Lost units Unit cost from preceding department before adjustment) Good units Both of the above formulas produce the same result. It uses a job-costing system with two direct cost categories (direct materials and direct labour) and one indirect cost pool (assembly support). Written by True Tamplin, BSc, CEPF Your email address will not be published. XYZ Ltd. has two production and two Service departments namely P1 and P2, and S1 and S2, respectively. Plagiarism Prevention 4. Normal costing enables Anderson to report a job cost as soon as the job is completed, assuming that both the direct materials and direct labor costs are known at the time of use/work. 2.00 per hour plus a bonus under the Rowan Premium Bonus Scheme and Dearness Allowance of Rs. Content Guidelines 2. Statement showing the amount of provision to be made to offset the inter-process profits added: The following information is available regarding process X during the year ended 31.3.95. 2,40,000. Rejected units are returned for rework to 40% level of completion. Your article has proven useful to me. re-order period Your email address will not be published. Idle Capacity Cost 9. Wow that was odd. Cost Accounting Problems on Contract Costing (3 Problems): 11. Tazeen Ltd. is manufacturing a single product which is being processed in three departments called as Molding, Painting and Finishing. (2) Average inventory Calculate the economic order quantity (EOQ). Updated on September 17, 2021. Wage Payment 5. What would be the cost per unit and selling price in 2007, if it is desired to maintain the same rate of profit on sales as in 2006? Finished Stock a/c ; Dr Cr ; Following data is available for preparing Cost of Production Report for three departments: >> Further PracticeFunctional Budgets Problems and Solutions. Graffiti is costing cities in the U.S. anywhere from $8 billion to $12 billion annually. 228150 for labor and tk. 005 = 2/3 2,25,000/2,50,000 62,000 = 37,200, (b) Contract No. Material Rs. Nice write up. Process costing with Normal Loss, Abnormal Loss \u0026 Gain | Costing | CA CMA Inter | Process Costing Page 1/2 December, 03 2022 Labor and overhead costs incurred uniformly. 106100 and tk. Thank you. Component B = 300 units (50 units x 3 weeks) = 150 units, (3) Maximum Level = Reorder level Reorder Quantity (Minimum consumption per day/per week, etc. = 1.50 x 40,000 units = Rs.60, 000 d. The most common problem faced by material cost accountants is that they collect too much data and do not analyze it effectively. 2. Labour hours worked = No. From the following information prepare a statement showing primary distribution of overhead: A worker takes 12 hours to complete a work on daily wages and 8 hours on a scheme of payment by results. Thumbs up! Component A = 200 units + (1 / 2 x 400 units) = 400 units Its job-costing system has a single direct-cost category (professional labor) and a single indirect-cost pool (audit support, which contains all costs of the Audit Support Department). You add spoilage costs to cost of goods manufactured. 6.00 per hour. Normal cost = Actual material cost + Actual labor cost + Actual labor hours x Standard overhead rate Normal cost = 240 + 570 + 100 x 3.00 Normal cost = 1,110 If the actual overheads for the business were 87,000 instead of the budgeted 75,000, and actual labor hours used were 21,750 instead of the budgeted 25,000, then the actual overhead rate is: The departmental distribution summary showed the following expenses for June 2007: Rina, a contractor got a contract to supply 100 wooden dolls per day to M/s R. K. Mitra & Co. Good job on this article! There are also three processes A, B, and C. The data relating to inputs, outputs, and rejections for the month of April are given below. You are requested to prepare the Contract A/c and Contractees and Work-in-Progress A/c for the year ended 31st December 2006 from the following information: 10% of value of material and 15% of wages may be considered as being incurred for the proportion of works completed but not certified. (i) Calculation for the amount of Contract Price increased due to Escalation Clause. The Frost Winged Hydra is a Legendary Christmas 2018 Event pet in Bubble Gum Simulator. 14,000; Opening Inventory Rs. Image Guidelines 5. Process Costing Unsolved Problems PDF Download, Previous Lesson: Economic Order Quantity Problems and Solutions, Next Lesson: CVP Analysis Problems and Solutions. Costing normal spoilage takes a little math. The normal loss is considered to be 10%. (ii) Calculation for Profit to be charged to Profit & Loss A/c. Thx again. You should be a part of a contest for one of the most useful sites on the internet. 20 per 100 units and the machine consumed 10 units per hour. 103 Job in Process, January 1, 2020: Direct Materials 40,000 . of average inventory cost. 1-50 per unit and the carrying cost is estimated to be 25% p.a. The Mayflower Queen is the appropriate nam given by the Swedes to their countrywoman. 7. In this article we have compiled various cost accounting problems along with its relevant Solutions. Pre-separation point costs amounted to Rs. The unit cost is $6 and the inventory carrying cost is 25% per annum. 4. 1. 1,500; Salaries Rs. Cost Accounting Problems on Secondary Distribution (1 Problem): 7. Required Standard Costing Problem 3: A gang of workers normally consists of 30 men, 15 women and 10 boys. Thumbs up! 5.00, (iii) Fixed expenses in 2007 = 75,000 + 25,000 = 1,00,000, (iv) Rate of profit on sales = 2/12 100 = 16%. 41,412; Labor Rs. 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