Unit: Management accounting
11 Questions| Department | Hours | Cost (Sh.) |
| MM | 1,800 | 45,000 |
| NN | 5,400 | 54,000 |
| 1 | The service department costs are apportioned to the production departments as follows: |
| Department | |||||
PP | MM 50% 40% | NN 20% 40% | PP - 20% | QQ 30% - | |
| 2 | The overheads of the production departments are absorbed into product cost using a rate per hour. |
| 3 | During the month of August 2018, the actual activity levels and costs were as follows: |
| Department MM NN PP | Hours 1,980 6,120 - - | Costs (Sh.) 43,200 52,200 10,800 7,200 |
| Product "Meko" | |
| Sales (43,800 units) | 49,056 |
| Fixed costs | (9,811.2) |
| Variable costs | (29,433.6) |
| Operating profit | 2,811.2 |
| Product "13C" | |
| Sales (71,175 units) | 142,350 |
| Fixed costs | (79,716) |
| Variable costs | (42,705) |
| Operating profit | 19,929 |
| Sh. | ||
| Selling price per unit | 100 | |
| Direct materials | 7 kilogrammes at Sh.2 per kilogramme | 14 |
| Direct labour | 2 hours at Sh.8 per hour | 16 |
| Fixed overheads | 2 hours at Sh.16 per hour | 32 |
| Total cost | 62 |
| 1 | As at I October 2018, the opening balances for the cost ledgers were as follows: |
| Sh. | ||
| Direct materials | 15,000 | |
| Work-in-progress | 120,000 | |
| Finished goods | 72,000 |
| 2 | The following transactions took place during the month of October 2018: |
| Sh. | |||
| Direct material purchases | 89,000 | ||
| Materials issued to production | 90,000 | ||
| Direct labour paid | 102,000 | ||
| Indirect labour paid | 56,000 | ||
| Production overhead cost incurred | 159,000 | ||
| Sales (6,500 units) | 650,000 | ||
| Goods transferred to finished goods stock | 385,000 |
| 3 | As at 31 October 2018, closing stock balances were as follows: |
| Sh. | ||
| Direct materials | 14,000 | |
| Work-in-progress | 135.000 | |
| Finished goods | 54,000 |
| 1 | Standard mixture | 70% | Ingredient Y |
| 30% | Ingredient X | ||
| 2 | Standard prices | Ingredient X | Sh.480 per kg. |
| Ingredient Y | Sh.130 per kg. |
| 3 | Opening and closing stock of ingredients X and Y for the month of October 2018 are as follows: |
| Opening stock | Ingredient X | 100 kgs | |
| Ingredient Y | 60 kgs | ||
| Closing stock | Ingredient X | 110 kgs | |
| Ingredient Y | 50 kgs |
| 4 | Total purchases for ingredients X and Y are as follows: |
| Ingredient X | 300 kgs at Sh.146,500 | ||
| Ingredient Y | 100 kgs at Sh.12,500 |
| 5 | The mixtures melted amounted to 400 kgs while castings produced were 375 kgs. |
| 6 | Standard loss is 10% of input. |
| 1 | Materials: | M | 1,800 tonnes at Sh.40 per ton. |
| N | Sh.45,640 | ||
| 2 | Labour: | Direct | Sh.25,560 |
| Indirect | Sh.8,640 | ||
| 3 | Overheads: Works 25% of direct costs | ||
| Office 20% of prime cost and works overhead cost | |||
| 4 | Sales Sh.7,400,000. Sales per brick amount to Sh.400. | ||
| 5 | Royalties are paid at the rate of Sh.0.5 per 1,000 bricks. | ||
| 6 | The production is in batches of 1,000 bricks. | ||
| 7 | Stock of finished bricks: | Opening 800,000 | |
| Closing 600,000 | |||
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