BAC 201 - MANAGEMENT ACCOUNTING

CAT 1 (Distance Learning mode of study)

QUESTION 1 (TOPIC: LABOUR COSTING)

Halwings Company Ltd who manufactures and retails products A, B and C employ sixty direct workers who work under a group of bonus scheme.The company engages three grades of workers who are paid a bonus of the excess of time allowed over time taken.The bonus paid is 75% of the workers' base rate and is shared by the workers in proportion to the time spent on the work.The following production data has been extracted from the company's records for April 2000.

Product

Units produced

Time allowed per unit

A

320

63

B

640

120

C

1200

100

Grade of worker

Number of direct workers

Base rate per hour (sh)

Hours worked per worker

1

20

30

30

2

8

27

64

3

32

24

50

Required:

a) Percentage of hours saved to hours taken.(5 marks)

b) Bonus due to the group.(5 marks)

c) Gross earnings due to the group.(5 marks)(Total: 15 marks)

QUESTION 2 (TOPIC: OVERHEAD COSTING)

Given:Total budgeted overheads = Shs.240, 000 and the Production budget is given as follows:

Product

A

B

i) Units

20,000

10,000

ii) Labour hours

20,000

20,000

iii) Labour cost

Shs.17,500

Shs.22,500

iv) Machine hours

45,000

15,000

v) Material cost

Shs.15,000

Shs.25,000

Required;

The overhead absorption rate per unit of A and B using the following methods:

a) Unit method

b) Percentage on material cost.

c) Percentage on labour cost.

d) Percentage On prime cost.

e) Labour hour rate.

f) Machine hour rate.(Total: 15 Marks)