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MGT402‐ Cost & Management Accounting  

ASSIGNMENT – SPRING 2009  
TOTAL MARKS: 40    
Due Date to Submit the Assignment is 
Friday, June 12, 2009  
 
  INSTRUCTIONS: (Please read the instructions carefully before starting the assignment.)  
• This assignment covers the lessons # 32 that have been delivered so far. 
• This assignment aims to provide you not only the subjective knowledge but also a practical             
Scenario based perspective of the common topics of your course. 
• The assignment consists of 20 multiple choice questions (MCQs) carrying 2 marks each. 
• Assignment once uploaded on VULMS will not be replaced in any case. So, make sure to     
upload the correct assignment file. 
• Do not submit your assignment as a PDF, image, HTML, Notepad, WordPad or MS‐Word file; 
it will be marked as ZERO. 
• Use only Micro Soft Excel file (.xls file format).Its link is given on the announcement page. 
• In the “Correct Option” column, write down only the option number (e‐g A, B, C, D) against 
each question number which you consider is the correct one. 
• Upload only the answer sheet on VULMS. Don’t upload the whole assignment. 
• Make sure that you upload your solution file on VULMS before the due date/time. No solution 
will be accepted through e‐mail after the due date. 
• If you have any problem with your VULMS or uploading, then you can send your solution 
through e‐mail within the due date and time at mgt402@vu.edu.pk 
• Cheating or copying of solution is strictly prohibited; no credit will be given to copied solution 
• No solution will be accepted through your personal e‐mail accounts (e.g. Yahoo, Hotmail, G‐ma
il etc.) 
• A link of the following answer sheet is also given on the announcement page of Mgt402, take 
it from there or copy the following sheet and solve your assignment by providing answer in 
the given column. 
 
 
 
Following are the set of case studies of different manufacturing companies
You are required to read and understand the information carefully and then attempt
the Questions provided at the end.

Case # 1
Mark Philips Ltd Company that carried out jobbing work. One of the jobs carried out in February
was Job # 13000, to which the following information relates.

Items Particulars
Direct material Y 400 kilos issued from stores at a cost of Rs.5 per kilo
800 kilos issued from stores at a cost of Rs.6 per kilo and 60 kilos returned to store,
Direct material Z A further 20 kilos were damaged and treated as abnormal loss

Department P 300 hours of labor@ Rs.4 per hour

Department Q 200 hours of labor@ Rs.5 per hour


Department P had to carry out Rectification works, which took 20 hours in normal
time. These 20 hours are additional to the 300 hours above. This rectification work
is normal for a job such as job # 13000, and since it was expected, is included in
direct costs of the job.

Overhead is absorbed at the rate of Rs.3 per direct labor hour in both departments.

Read the above case study carefully and write down the correct option
number (e-g A, B, C, D) in the given Excel file.

1. What was the direct material cost of job # 13000?


A. Rs.6,320
B. Rs.6,440
C. Rs.6,680
D. Rs.6,800

2. What was the direct labor cost of job # 13000?


A. Rs.2,280
B. Rs.2,200
C. Rs.2,530
D. Rs.2,600
3. What was the production overhead cost of job # 13000?
A. Rs.1,560
B. Rs.900
C. Rs.600
D. Rs.1,500

4. What was the full production cost of job # 13000?


A. Rs.10,160
B. Rs.10,100
C. Rs.10,280
D. Rs.10,335

5. What was the rectification work cost of job # 13000?


A. Rs.80
B. Rs.100
C. Rs.90
D. Rs.70
Case #2
Unilever Pakistan sells one product for which data is given below:

Particulars Rs
Selling price per unit 10
variable cost per unit 6
Fixed cost per unit 2

The fixed costs are based on a budgeted level of activity of 5,000 units for the period.

Read the above case study carefully and write down the correct option
number (e-g A, B, C, D) in the given Excel file

6. What is Unilever breakeven point in Rs of sales revenue?


A. Rs.25, 00
B. Rs.25,000
C. Rs.5,000
D. Rs.50,000

7. What is Unilever breakeven point in units of sales revenue?


A. 25,000 units
B. 25,00 units
C. 50,000 units
D. 5,000 units

8. How many units must be sold if unilever wish to earn a profit of Rs.6,000 for the period?
A. 2,000 units
B. 4,000 units
C. 6,000 units
D. 8,000 units

9. What is unilever margin of safety for the budget period if fixed costs prove to be 20% higher
than budgeted?
A. 60%
B. 40%
C. 33x1/3%
D. 20%
10. If the selling price and variable cost increase by 20% and 12% respectively by how much
must sales volume change compared with the original budgeted level in order to achieve the
original budgeted profit for the period?

A. 24.0% increase
B. 24.2% decrease
C. 37.9% decrease
D. 37.9% increase

Case #3
A product is manufactured as a result of two processes, A and B.detail of process B for the
month of august were as follow:

Particulars Rs.
Materials transferred from process A 10,000 kg valued at Rs.40,500
Labor Costs 1,000 hours @ Rs.5.616 per hour
Overheads 50% of labor costs
Output transferred to finished goods 8,000 kg
Closing work in progress 900 kg

Normal loss is 10% of input and losses do not have scrap value.

Closing work in progress is 100% complete for material, and 75% complete for both labor and
overheads.

Read the above case study carefully and write down the correct option
number (e-g A, B, C, D) in the given Excel file

11. What is the value of the abnormal loss in Rs?


A. Rs.Nil
B. Rs.489
C. Rs.544
D. Rs.546

12. What is the value of the output (finished units) nearest to Rs?
A. Rs.43,977
B. Rs.39,139
C. Rs.43,488
D. Rs.43,680
13. What are the equivalent units of production as to material and labor & overheads in August?
Material Labor& overheads
A. 9,000 units 8,775 units
B. 10,000 units 8,775 units
C. 8,775 units 9,000 units
D. 9,000 units 8,775 units

14. What is the value of total production cost in Rs?


A. Rs.8,424
B. Rs.5,616
C. Rs.40,500
D. Rs.48,924

15. What is the value of the closing work in progress nearest to Rs?
A. Rs.4,403
B. Rs.4,892
C. Rs.4,947
D. Rs.4,698
Case #4
The following information is available for Panasonic company new product line:

Particulars Rs.
Sales price per unit 15
Variable manufacturing cost per unit 8
Total annual fixed manufacturing cost 25,000
Variable administrative cost per unit 3
Total annual fixed marketing and administrative expenses 15,000

There was no inventory at the beginning of the year. Normal capacity is 12,500 units. During the
year, 12,500 units were produced and 10,000 units were sold.

Read the above case study carefully and write down the correct option
number (e-g A, B, C, D) in the given Excel file

16. What is the value of ending inventory, assuming the use of direct costing?
A. Rs.7,500
B. Rs.15,000
C. Rs.20,000
D. Rs.10,000

17. What is the value of ending inventory, assuming the use of absorption costing?
A. Rs.7,500
B. Rs.15,000
C. Rs.25,000
D. Rs.10,000

18. Total variable cost charged to expense for the year, assuming the use of direct costing?
A. Rs.115,500
B. Rs.137,500
C. Rs.117,500
D. Rs.110,500
19. Total fixed cost charged to expense for the year, assuming the use of absorption costing?
A. Rs.20,000
B. Rs.15,000
C. Rs.35,000
D. Rs.40,000

20. What is the value of Total fixed manufacturing cost per unit?
A. Rs.1
B. Rs.8
C. Rs.2
D. Rs.3