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    Revision For Test 1

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    Hafeez Lateef
    The document discusses several topics related to cost accounting: 1. It describes the two extreme types of cost behavior: fixed and variable costs. 2. It provides a list of costs and asks the reader to classify each as inventoriable or period costs for three different companies. 3. It presents information about material usage and control levels and asks the reader to calculate reorder level, minimum level, and maximum level. 4. It provides budgeted and actual overhead data for three departments, two production and one service, and asks the reader to calculate overhead absorption rates and overhead under- or over-absorption.

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    Revision For Test 1

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    Hafeez Lateef
    99 views2 pages
    The document discusses several topics related to cost accounting: 1. It describes the two extreme types of cost behavior: fixed and variable costs. 2. It provides a list of costs and asks the reader to classify each as inventoriable or period costs for three different companies. 3. It presents information about material usage and control levels and asks the reader to calculate reorder level, minimum level, and maximum level. 4. It provides budgeted and actual overhead data for three departments, two production and one service, and asks the reader to calculate overhead absorption rates and overhead under- or over-absorption.

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    Revision for Test 1

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    The document discusses several topics related to cost accounting: 1. It describes the two extreme types of cost behavior: fixed and variable costs. 2. It provides a list of costs and asks the reader to classify each as inventoriable or period costs for three different companies. 3. It presents information about material usage and control levels and asks the reader to calculate reorder level, minimum level, and maximum level. 4. It provides budgeted and actual overhead data for three departments, two production and one service, and asks the reader to calculate overhead absorption rates and overhead under- or over-absorption.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    99 views2 pages

    Revision For Test 1

    Uploaded by

    Hafeez Lateef
    The document discusses several topics related to cost accounting: 1. It describes the two extreme types of cost behavior: fixed and variable costs. 2. It provides a list of costs and asks the reader to classify each as inventoriable or period costs for three different companies. 3. It presents information about material usage and control levels and asks the reader to calculate reorder level, minimum level, and maximum level. 4. It provides budgeted and actual overhead data for three departments, two production and one service, and asks the reader to calculate overhead absorption rates and overhead under- or over-absorption.

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    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
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    INTRODUCTION TO COST ACCOUNTING SHB2232 REVISION 1 1.

    The determination of cost by its behaviour is concerned with how the costs incurred in the business change with output. Briefly explain the two extreme types of cost behaviour. 2. Each of the following items pertains to one of these companies: Bedell Electronics (a manufacturing company), Gregory Food Retailers (a merchandising company), and Larson Real Estate (a service sector company). Classify each item as either inventoriable (I) costs or period (P) costs. inventoriable (I) costs or period (P) costs a. b. c. d e f g. h. i. Salary of Bedell Electronics president Depreciation on Bedell Electronics assembly equipment. Salaries of Bedells assembly line workers Purchase of frozen food for sale to customers by Gregory Food Retailers Salaries of frozen food personnel at Gregory Food Retailing Depreciation on freezers at Gregory Food Retailing Salary of a receptionist at Larson Real Estate Depreciation on a computer at Larson Real Estate Salary of a real estate agent at Larson Real Estate

    3. Calculate three normal control levels, which may be used in stock control systems, from the following information for a particular raw material: Economic order quantity, 12 000 kilos Lead time, 10 to 14 working days Average usage, 600 kilos per day Minimum usage, 400 kilos per day Maximum usage, 800 kilos per day
    Ans: Reorder level: 11,200kg; Min. level: 4,000kg; Max. level: 19,200kg

    Prepared by Nursyima Ismail

    Semester 1, 2012/2013

    INTRODUCTION TO COST ACCOUNTING SHB2232 4. A manufacturing company has two production cost centres (Departments A and B) and one service cost centre (Department C) in its factory. A predetermined overhead absorption rate (to two decimal places of RM) is established for each of the production cost centres on the basis of budgeted overheads and budgeted machine hours. The overheads of each production cost centre comprise directly allocated costs and a share of the costs of the service cost centre. Budgeted production overhead data for a period is as follows: Department A Allocated costs Apportioned costs Machine hours Direct labour hours RM217 860 RM45 150 13 730 16 360 Department B RM374 450 RM58 820 16 110 27 390 Department C RM103 970 (RM103 970)

    Actual production overhead costs and activity for the same period are: Department A Allocated costs Machine hours Direct labour hours RM219 917 13 672 16 402 Department B RM387 181 16 953 27 568 Department C RM103 254

    70% of the actual costs of Department C are to be apportioned to production cost centres on the basis of actual machine hours worked and the remainder on the basis of actual direct labour hours. Required: a) Establish the production overhead absorption rates for the period. b) Determine the under- or over-absorption of production overhead for the period in each production cost centre. (Show workings clearly)

    Ans: a. OAR [Dept A]: RM19.16; OAR [Dept B]: RM26.89 b. Dept A : RM1,783 (under-absorbed); Depr B : RM9,253 (over-absorbed)

    Prepared by Nursyima Ismail

    Semester 1, 2012/2013

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