[WASSCE BECE NOVDEC NABPTEX-0547316472]

1.State five benefits of a cost accounting system.

2.State four factors that bring about the difference between the balance on the bin card and the physical stock balance.

3.Differentiate between the following:

(a) Direct cost and indirect cost;

(b) Unit cost and cost unit;

(c) Fixed cost and variable costs

4. W.W.W. Ltd has two production departments; Packing and Assembling. It also has two

service departments; Maintenance and Handling.

The following budgeted cost data is available for the departments:

Production department

Packing N 1,000,000

Assembling N 800,000

Service department

Maintenance N 200,000

Handling N 150,000

The service department costs are to be apportioned to the production department as

follows:

Packing Assembling Maintenance Handling

Maintenance 50% 40% — 10%

Handling 30% 50% 20%

You are required to prepare an overhead sheet using the repeated distribution method and starting with the maintenance department

5. Cost data obtained from the books of GALAS for the month of July 2008 is as follows:

Standard cost:

Material……………..300 kg @ N 500

Labour……………….550 hours @ N 250

Actual cost;

Material……………..280 kg @ N 480

Labour……………….600 hours @ N 300

You are required to calculate;

(a) direct material price variance

(b) direct material usage variance

(c) direct labour Rate variance

(d) direct labour Efficiency variance

6. CHINN Ltd. Produces and sells a product called Safal. For the 2008 financial year, each unit of Safal is expected to sell at N220 per unit.

The company is expected to incur a variable cost of N180 in the production of each unit. Fixed cost per annum will be N1, 200,000.

A sales volume of 36,000 units is estimated for the year.

You are required to calculate:

(a) Break-even point in sales

(b) Break-even point in units

(c) Margin of safety

(d) The units to be sold in order to yield a profit of N 300,000

7. Veep Ltd. has a system of control accounts. The following transactions took place during

he year to December 31st,2008.

Materials purchases………………………..250 Matrials issued to production……………..220

Direct wages paid……………………………170

Indirect wages paid………………………….100

Factory overhead incurred…………………120

Finished goods transferred………………..120

Selling overhead on goods sold……………24

Cost of sales………………………………….110

Sales……………………………………………500

You are required to make entries in the cost journal (Narrations are not required).

8.(a) Define absorption costing.

(b) State four advantages of absorption costing.