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TUTORIAL QUESTIONS
1. Alatise Manufacturing Company provides the
following information relating its cost
function as given below:
TC = 3 p3 + 15p2 - 15p
+ 100
Where P =
N50 and Q = 100 units
Required:
Calculate:
(a) i.
Fixed Cost ii. Variable Cost iii. Mixed Cost iv. Variable Cost per unit
v. Average Fixed Cost vi.
Average Cost
(b) Use the information in “a” above to prove
that:
Average Fixed Cost = Average Cost
- Variable Cost per unit
2. Explain the following cost classification:
a. Classification as Direct or Indirect Cost b.
Classification according to function
c. Classification according to behaviour d.
Classification according to relevance
e. Classification according to product cost and
period cost
3. Differentiate between Cost Control and Cost
Reduction.
4. State five
functions of Cost Accounting Department.
5. What do
you understand by Group Incentive Scheme?
6. State four advantages of Group Incentive Scheme.
7. Using the
information given below, you are required to calculate the amount earned by
each employee under each of the following remuneration method:
i. Piece Works ( with guaranted hourly rate) ii. Hourly rate
Employee A
|
Employee B
|
Employee C
|
|
Hours worked per 1,000 units
Rate per unit
Guaranted hourly rate
Actual time taken (hrs)
Actual output produced
|
23
N12.50
N60
40
200
|
32
N5.00
N75
42
125
|
38
N7.50
N50
39
150
|
8. Explain
the following classification of overhead:
i. Production Overhead ii.
Administrative Overhead
iii. Marketing, Selling and Distribution Overhead
9. What do
you understand by Overhead?
10. The budgeted production overhead and other
budget data for Aiyefele Limited are as follows:
Production
Department P Production
Department Q
Budgeted Overhead Cost N72,000 N10,000
Other Informations:
Direct Material Cost N64,000
Direct Labour Cost N80,000
Machine Hours 10,000
Direct Labour Hours 18,000
Unit of production 10,000
Required: Calculate the production overhead
absorption rate using the various basis of apportionment.
11. Brits
Motors Limited, a car assembly plant buys batteries from an overseas supplier
at N20 per battery. Total annual requirement are 25,000 batteries at a rate of
100 per working day. The following cost data are available:
Desired annual return on stock investment N2.
Sundry carrying cost/ unit per year 50k.
Total carrying cost/ unit per year N2.50
Cost of purchase order include clerical cost,
stationery, telephone N50.
Average usage 3,000 units per week
Minimum Usage
2,200 units per week
Maximum Usage 4,200 units per week
Re-Order Period
10 -14 weeks
Required:
(a) Prepare in tabular form the total annual
relevant cost for each of the following order sizes: 250, 500, 1000, 2000,
4000, and 8000.
(b) What is the EOQ for batteries at Brits Motors
Limited and why?
(c) The data given above is to be used for
calculating the following stock control levels:
i. Maximum Level ii.
Average Level iii. Minimum Level vi.
Re-Order Level
12. Write
short note on the following methods of stock valuation:
a. First In First Out (FIFO) b. Last In First Out (LIFO) c. Weighted Average Method
13.The following information relates to Foyegbe
Manufacturing Limited from July 1 to 31st December, 2019.
Date
|
Quantity
|
Cost (N)
|
Receipts:
July 5
August 1
September 3
October 4
December
|
200
400
600
400
500
|
720,000
1,520,000
2,400,000
1,400,000
1,400,000
|
Sales:
August 2
October 12
December 12
|
500
600
400
|
2,500,000
2,700,000
1,500,000
|
Required: Calculate the cost of the product issued
during the period and the value on hard on 31st December, 2019 using
Last In First Out (LIFO)
14. (a)
Aseye Enterprises provides the following data relating to component
B97020314.
Cost of raw material N10
per unit
Usage per day 100
units
Minimum re-order period 20 days
Maximum re-order period 30 days
Cost of ordering materials N400 per order
Carrying cost 10%
per annual
Assume that each year consists of 48 working weeks
of 5 days per week.
Required: Calculate:
(i) The Re-Order Level (ii)
The Re-Order Quantity (iii) The Maximum Level
(iv) The
Minimum Level (v) The Average Level
15. Write
short note on the following terms:
a. Cost
b. Cost Unit c. Cost Centre
16. List three element of cost known to you.
17. The following information relates to
Ajikawe Manufacturing Limited from July 1 to 31st December, 2019.
Date
|
Quantity
|
Cost (N)
|
Receipts:
July 5
August 1
September 3
October 4
December
|
200
400
600
400
500
|
720,000
1,520,000
2,400,000
1,400,000
1,400,000
|
Sales:
August 2
October 12
December 12
|
500
600
400
|
2,500,000
2,700,000
1,500,000
|
Required: Calculate the cost of the product issued
during the period and the value on had on 31st December, 2019 using First
In First Out (FIFO)
18. (a) Write short note on the following
stock control records:
a. Bin Card
b. The Stock Tally Card c.
The Stock Ledger Card
19. List five
causes of stock discrepancies in inventory control
20. State five advantages of Cost Accounting
21. The annual demand of Foyegbe Limited was 500,000
units and the holding cost is N400 per unit. It usually cost the company N576
to place an order. Calculate the Economic Order Quantity for the company.
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