Questions and Answers of Cost And Management Accounting An Introduction

Prepare a Contract Account based on the following information as at 31 December 19X7: Contract 2267 Contract price Commencement date 1 January 19X7 Materials delivered to site Wages Site expenses
Mathews pic anticipates that it will produce 5,000 units per annum at a selling price of £6.00 each. At that level of production , the costs will be:(a) A customer has placed a special order and has
Jigantic Ltd is a building company engaged in the construction of hospitals and other major public buildings; most of the contracts undertaken extend over a three or four year period.Shown below are
(al In the context of process costing, how would you distinguish a by-product from a joint product?[b] Liquigas Ltd produces four products J, K, Land M through a process which for November 1976 cost
(al In the context of process costing, how would you distinguish a by-product from a joint product?[b] Liquigas Ltd produces four products J, K, Land M through a process which for November 1976 cost
The variable cost of the power drill manufactured by Hometools Ltd is £4 and the selling price £10. The company expects its net profit for the year just ending to be £275,000 after charging fixed
Industrial Fitments Ltd produce three types of shelving - 'Factory', 'Stores'and 'Office', which are made from the same basic material. mild steel. which costs £1 per square metre . The standard
One of ·the building contracts currently engaged in by a construction company commenced 15 months ago and remains unfinished. The followi ng information relating to wor k on the contract has been
Furnival has a dist illation plant that produ ces three joint produ ct s, P. Q and R.in the proportions. 10:5:5. After the spl it off point the produ cts can be sold for industrial use or they can be
Exewye The summarised profit and loss statement for Exewye pic for the last year is as follows :At a recent board meeting, the directors discussed the year's results, following wh ich the chairman
The marketing director of your company has expressed concern about Product X which for some time has shown a loss, and has stated that some action will have to be taken .Product X is produced from
A manufacturing company with a single product has the following sales and production results over three financial periodsThe selling price per unit has remained at £1 0, and direct material and
The management of an engineering company manufacturing a range of products is considering next year's production, purchase and sales budgets.Shown below are the budgeted total unit costs for two of
Distillation plant A distillation plant, which works continuously, processes 1,000 tonnes of raw material each day. The raw material costs £4 per tonne and the plant operating costs per day are
A company is preparing its production budget for the year ahead. Two of its processes are concerned with the manufacture of three components which are used in several of the company's products.
Symbols Ltd manufactures three products, Alpha, Beta and Gamma, the standard costs of which are as follows :The company's fixed overheads for the forthcoming year commencing January 1977 are expected
A company has a choice of manufacturing one of two products . Based on the following information , which is preferable? Product A Product B 30 Selling price per unit Variable costs per unit:
A company has the following semi-variable costs at two different levels of activity :What are the variable cost and the fixed cost elements if 6,000 units are produced? Production levels
What is the definition of a liability?AppendixLO1
(a) Explain briefly the term 'joint products' in the context of process costing.Ib) Discuss whether. and if so how. joint process costs should be shared amongst joint products. (Assume that no
Using the same data as in question 3, apply the sales value basis of apportionment to these joint costs .
The to tal joint cost of a process is £1,800 . This gives an output of 700 kilos of Product X and 300 kilos of Product Y. The selling price of Product X is £2.40 per kilo and of Product Y £2.60
What are the two methods used for apportioning joint costs?
Describe the three different ways which may be used to deal with by-product cost s.
What are the different costing methods used in organisations?AppendixLO1
What is meant by absorption costing. marginal costing and budgetary control?AppendixLO1
What is meant by a cost unit and a cost centre?AppendixLO1
What is the difference between direct and indirect costs?AppendixLO1
What are the elements of cost?AppendixLO1
What are the characteristics of a good coding system?AppendixLO1
What are the main documents used in the purchase and receipt of materials?AppendixLO1
What is the purpose of a bin card?AppendixLO1
What are the advantages of continuous stocktaking?AppendixLO1
What is meant by perpetual inventory?AppendixLO1
A wholesaler has 8.450 units outstanding for Part X100 on existing customers'orders; there are 3.925 units in stock and the calculated free stock is 5.525 units.How may units does the wholesaler have
Are the following statements true or false?Using Fl FO for pricing stock issues means that when prices are rising product costs are:a overstated and profits understated b kept in line with price
Calculate the value of the remaining 1,500 kg of materials in stock using the three methods. Fl FO, LIFO and average price.AppendixLO1
A national chain of tyre fitters stocks a popular tyre for which the following information is available:Average usage Minimum usage Maximum usage Lead time Reorder quantity 140 tyres per day 90 tyres
The following details relate to component 1256:Maximum usage per day Minimum usage per day Maximum lead time Minimum lead time Ordering cost Stock holding cost Annual demand 10 units 4 units 5 days 3
(a) Explain the meaning of:(i) continuous stocktaking, and(ii) perpetual inventory CIMA, Stage 2, November 1995 in the context of a material control system.(5 marks)(b) A company operates an historic
The hourly rate for an employee is £5.00 per hour with an agreed rate of production of 250 units per hour. An employee produces 3.000 units in 8 hours.If the employee is paid piecework on the basis
What are the advantages and disadvantages of piecework schemes?AppendixLO1
What are the main differences between weekly and daily time sheets?AppendixLO1
What are the responsibilities of the wages office?AppendixLO1
How are job cards used within a company?AppendixLO1
A company operates a piecework scheme where the hourly rate is £6.00 per hour and the agreed rate of production is 600 units per hour. In an 8-hour day a worker produces 7.200 units. Calculate the
What are the advantages and disadvantages of group incentive schemes?AppendixLO1
What are the advantages and disadvantages of integrated accounts?AppendixLO1
How would you enter the purchase of raw materials in an interlocking accounting system?AppendixLO1
The following data have been taken from the books of CB pie. which uses a non-integrated accounting system:Opening stock of materials Closing stock of materials Opening stock of finished goods
In a non-integrated accounting system. the balance shown on the cost ledger control account at the beginning of a financial year is A equal to the value of accumulated reserves shown in the financial
Q Limited uses an integrated standard costing system. In October. when 2.400 units of the finished product were made. the actual material cost details were:Material purchased Material used 5.000
(a) Describe briefly TH REE major differences between: (i) financial accounting and (ii) cost and management accounting. (6 marks)(b) Below are incomplete cost accounts for a period:The balances at
What is absorption costing?AppendixLO1
What are overheads?AppendixLO1
What is meant by cost allocation and cost apportionment?AppendixLO1
What are the main disadvantages of the repeated distribution method?AppendixLO1
Describe the three methods by which service department overheads can be apportioned when there are reciprocal services.AppendixLO1
Construct an overhead analysis from the following data to find the total overheads of the two production departments. Use the elimination method to apportion the service departments'
A method of dealing with overheads involves spreading common costs over cost centres on the basis of benefit received. This is known as A overhead absorption.B overhead apportionment.C overhead
Describe three overhead absorption rates and their respective advantages and disadvantages.AppendixLO1
What is a blanket or factory-wide overhead absorption rate. and what are its disadvantages?AppendixLO1
What are the advantages of using predetermined overhead absorption rates?AppendixLO1
How would you charge non-production overheads?AppendixLO1
A large firm of solicitors use a job costing system to identify costs with individual clients. Hours worked by professional staff are used as the basis for charging overhead costs to client services.
TRl-D has three production departments- Extrusion. Machining and Finishing- and a service department known as Production Services which works for the production departments in the ratio of 3:2:1.The
ORS Limited has three main departments - Casting, Dressing and Assembly -and for period 3 has prepared the following production overhead budgets for an output level of 110.000
What are the eight main stages in job costing?AppendixLO1
What are the six main features of a system for collecting job costs?AppendixLO1
What are the main features of a job cost card to be used for relatively small jobs?AppendixLO1
State which of the following are characteristics of job costing:(i) homogeneous products.(ii) customer-driven production.(iii) complete production possible within a single accounting period.A (i)
A company absorbs overheads on machine hours which were budgeted at 11.250 with budgeted overheads of £258.750. Actual results were 10.980 hours with overheads of £254.692. Overheads were A
A firm makes special assemblies to customers' orders and uses job costing. The data for a period are:Job No. AA70 Opening WIP Material added in period Labour for period£26.800 17.275 14.500 Job No.
What is an architect's certificate and what are retention monies?AppendixLO1
What are the main stages in contract costing?AppendixLO1
What is output costing?AppendixLO1
Describe two methods for valuing closing work in progress.AppendixLO1
What is the difference between joint products and by-products?AppendixLO1
What is contribution?AppendixLO1
What is the relevant range?AppendixLO1
What are the main features of absorption and marginal costing?AppendixLO1
What are the main arguments for using absorption and marginal costing?AppendixLO1
What is a limiting factor or principal budget factor?AppendixLO1
What are the main requirements of an effective system of budgetary control?AppendixLO1
What is the purpose of variance analysis?AppendixLO1
What are the main advantages and disadvantages of standard costing?AppendixLO1
What are the main differences between fixed and variable overhead variances?AppendixLO1
Calculate the sales margin price variance from the data for KJ B Ltd.AppendixLO1
What are the principles underlying the discounted cash flow technique?AppendixLO1
What are the advantages and disadvantages of activity-based costing?AppendixLO1
What is a bottleneck?AppendixLO1
What is the theory of constraints?AppendixLO1
A company has the choice of one of two projects. each with a life span of 4 years and requiring an initial investment of £6.000. Select the best project by using the net present value technique at a
Explain the principles underlying. the discounted cash flow technique.
What are the advantages and disadvantages of the payback technique?
What financial decisions will management take into account when making capital investment decisions?
Emcee Emcee pic manufactures three products. standard data for whi ch are given below :You are required to:(a) present one graph that shows the profit of the company as a whole and the contribu tion
Local authority(a) Identify and discuss briefly five assumptions underlying cost-volumeprofit analysis.(b) A local authority, whose area includes a holiday resort situated on the east coast,
A company produces and sells two products with the following costs :Total sales revenue is currently generated by the two products in the following proportions :Required:(a) Calculate the break-even
The following data relates to a company for the month of January. Construct statements for the period using both marginal costing and absorption costing to show the figures of profit : Sales

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