UNIVERSITY OF DEVELOPMENT ALTERNATIVE (UODA)

Faculty of Business Administration (BBA)

Mid-term exam, (January-April) 2017

Course Name: Advanced Cost Accounting (Course Code: )

BBA Batch:45th Total Marks : 30

10th Semester Time : 1 hours 30 minutes

Answer the following questions (any three): (3*10=30)

1. Se Hwa Ki corporation uses process costing in its two producing department. The following information
pertains to department 2 for February. Normal spoilage is 50% of good output, inspection of spoilage take
place at the 80% stage of completion, materials are added after inspection.
Department 2 received 60000 units from department 1 at a cost of $6, 00,000. Department 2 costs were
$48,000 for material and $3, 57,000 for conversion costs. A total of 42,000 units were completed and
transferred to finished goods. At the end of the month, 10,000 units were still in process, estimated to be
60% complete as to conversion costs. Prepare a cost of production report for department 2.

2. The following information has been taken from the records of Master Buster company---

Inventory: January1 december31

Finished goods……………………. $ 17,500 $ 33,000
Work in process………………….......25,300 19,300
Materials…………………………..…16,700 12350
Material purchase……………………………………………………………………$ 280300
Factory wage………………………………………………………………………… 335700
Carriage in………………………………………………………………………………..5500
Sales salaries and expenses………………………………………………………. ....... 30000
Other factory expense……………………………………………………………… .......6500
Carriage out……………………………………………………………………….......... 4430
Factory insurance (semiannually)………………………………………………………12500
Office rent…………………………………………………………………………… 70000
Depreciation-machinery………………………………………………………….. 33000
Depreciation –office equipment……………………………………………….............. 20000
Return to suppliers of materials …………………………………………………… . ....2400
Sales ………………………………………………………………………………… 2259400
Sales returns…………………………………………………………………………… .. 5000
Purchase allowance……………………………………………………………………… 700
Sales discount…………………………………………………………………………… 3000
Office salary.......................................................................................................................90000
Marketing expense............................................................................................................15000

Required: Prepare –a) cost of goods sold statement and b) Income statement for the year.
 3. Empire corporation has the following cost information:
Raw material...................................... .............80500
Direct labor (variable 35%)................................60700
Fuel...................................................................3000
Small tools........................................................3300
Wages of security guard ....................................7000
Factory rent.......................................................45600
Factory insurance..............................................12000
Repairs of factory building................................10000
Telephone bill...................................................5000
Supervision and inspection...............................8000
Utility bill.........................................................6000
Office salaries..................................................20000
Office rent.......................................................250000
Sales salaries...................................................13000
Interest of bank loan......................................14500
Required: Compute direct material, direct labor, factory overhead, prime cost, conversion cost, fixed cost,
variable cost, semi-variable cost, step cost, administrative cost, marketing cost, financing expense.

4. a) Explain the classification on the basis relationship to planning, controlling and decision making.

b) Explain different product flow under process costing. (5+5)

5. Cha Young shin Corporation is following process costing for their factory. They have following

information for department B:

Transferred in to Department B...........................................25,000

Transferred out to Department C..........................................22000

Work in process (1/4 as conversion).......................................2500

Normal loss(1/2 as conversion)................................................500

Cost of Department A .......................................................250,000

Labor cost...........................................................................$50,000

Factory overhead................................................................$ 30,000

Required:

Prepare a cost of production report for Department B.