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Indian Institute of Management Kashipur

PGP 2016-18, Term II


Management Accounting
Quiz 2
Maximum Marks: 20 Time: 30 Minutes.
Name..................... Roll No.....................
1. A manufacturer uses job costing system. Today they have completed Job No. 456. The
cost incurred to complete this job is as follows:
a) 40 kg of raw material was issued to the job.
400 kg raw material was purchased from the supplier at the rate of Rs 20 per Kg
and transportation charges were paid Rs 500. Half of this raw material was lost in
transit due to some accident. 10% of the raw material received by the store is
generally lost due to normal wastage and only 90% of the raw material is usually
issued to the jobs.

b) A worker, Mr Ramesh, was engaged for the Job for 6 hours, out of which 3 hours
he worked as overtime.
The worker is paid a wage of Rs 500 per day. Although the workers are supposed
to work for 8 hours a day, but they work all in average 5 hours a day due to some
normal idle time. Today, the workers could not work for first 4 hours for some
major power failure. Ramesh was assigned Job 456 since morning, but could start
it late and then he was asked to work overtime to complete the job. During overtime
the workers are paid wage at the rate of Rs 120 per hour.

c) Overheads are charged at the rate of Rs 10 per direct labour hour.


d) The manufacturer charges a mark-up of 20%
Complete the following Job Cost Sheet.

Job Cost Sheet


Job No 456
Direct Material Quantity Rate Cost
3

Direct Labour Hours Rate Cost


4

Overheads Base Rate Cost


1

Total Cost
1
Mark-up
1
Selling Price
2. Indrayani Engineering Company provided the following information for the month of
December:
Items of cost Budgeted Actual
Direct Material (Rs) 8750 8800
Direct Labour (Rs) 4800 4900
Manuf. Overhead 5500 5750
Machine hours 250 225

The company follows normal costing system and overheads are applied on the basis
of direct labour cost.

Job no P876 was issued the material costing Rs 2100. The job used labour costing
of Rs. 3650 and 60 machine hours.

(a) What is the cost of Job No P876 as per normal costing? (2)

(b) What is over/ under applied overheads for the month (3)
Rs Over/under applied

If company applies the overheads on the basis of machine hours:

(a) What is the cost of Job No P876 as per normal costing? (2)

(b) What is over/ under applied overheads for the month (3)
Rs Over/under applied
Indian Institute of Management Kashipur
PGP 2016-18, Term II
Management Accounting
Quiz 2
Maximum Marks: 20 Time: 30 Minutes.
Name..................... Roll No.....................
1. A manufacturer uses job costing system. Today they have completed Job No. 456.
The cost incurred to complete this job is as follows:
a) 40 kg of raw material was issued to the job.
400 kg raw material was purchased from the supplier at the rate of Rs 20 per Kg
and transportation charges were paid Rs 500. Half of this raw material was lost in
transit due to some accident. 5% of the raw material received by the store is
generally lost due to normal wastage and only 95% of the raw material is issued to
the jobs.

b) A worker, Mr Ramesh, was engaged for the Job for 6 hours, out of which 3 hours he
worked as overtime.
The worker is paid a wage of Rs 500 per day. Although the workers are supposed
to work for 8 hours a day, but they work all in average 5 hours a day due to some
normal idle time. Today, the workers could not work for first 4 hours for some
major power failure. Ramesh was assigned Job 456 since morning, but could start
it late and then he was asked to work overtime to complete the job. During overtime
the workers are paid wage at the rate of Rs 130 per hour.

c) Overheads are charged at the rate of Rs 10 per direct labour hour.


d) The manufacturer charges a mark-up of 20%
Complete the following Job Cost Sheet.

Job Cost Sheet


Job No 456
Direct Material Quantity Rate Cost
3

Direct Labour Hours Rate Cost


4

Overheads Base Rate Cost


1

Total Cost
1
Mark-up
1
Selling Price
2. Indrayani Engineering Company provided the following information for the month of
December:
Items of cost Budgeted Actual
Direct Material (Rs) 8750 8800
Direct Labour (Rs) 5000 4900
Manuf. Overhead 6000 5500
Machine hours 500 450

The company follows normal costing system and overheads are applied on the basis
of direct labour cost.

Job no P876 was issued the material costing Rs 2100. The job used labour costing
of Rs. 3650 and 60 machine hours.

a) What is the cost of Job No P876 as per normal costing? (2)

b) What is over/ under applied overheads for the month (3)

Rs Over/under applied

If company applies the overheads on the basis of machine hours:

a) What is the cost of Job No P876 as per normal costing? (2)

b) What is over/ under applied overheads for the month (3)


Rs Over/under applied
Indian Institute of Management Kashipur
PGP 2016-18, Term II
Management Accounting
Quiz 2
Maximum Marks: 20 Time: 30 Minutes.
Name..................... Roll No.....................
1) A manufacturer uses job costing system. Today they have completed Job No. 456. The
cost incurred to complete this job is as follows:
a) 40 kg of raw material was issued to the job.
400 kg raw material was purchased from the supplier at the rate of Rs 20 per Kg
and transportation charges were paid Rs 500. Half of this raw material was lost in
transit due to some accident. 15% of the raw material received by the store is
generally lost due to normal wastage and only 85% of the raw material is issued to
the jobs.

b) A worker, Mr Ramesh, was engaged for the Job for 6 hours, out of which 3 hours he
worked as overtime.
The worker is paid a wage of Rs 500 per day. Although the workers are supposed
to work for 8 hours a day, but they work all in average 5 hours a day due to some
normal idle time. Today, the workers could not work for first 4 hours for some
major power failure. Ramesh was assigned Job 456 since morning, but could start
it late and then he was asked to work overtime to complete the job. During overtime
the workers are paid wage at the rate of Rs 140 per hour.

c) Overheads are charged at the rate of Rs 10 per direct labour hour.


d) The manufacturer charges a mark-up of 20%
Complete the following Job Cost Sheet.

Job Cost Sheet


Job No 456
Direct Material Quantity Rate Cost
3

Direct Labour Hours Rate Cost


4

Overheads Base Rate Cost


1

Total Cost
1
Mark-up
1
Selling Price
2. Indrayani Engineering Company provided the following information for the month of
December:
Items of cost Budgeted Actual
Direct Material (Rs) 8750 8800
Direct Labour (Rs) 4500 4900
Manuf. Overhead 4600 4400
Machine hours 1000 850

The company follows normal costing system and overheads are applied on the basis
of direct labour cost.

Job no P876 was issued the material costing Rs 2100. The job used labour costing
of Rs. 3650 and 60 machine hours.

a) What is the cost of Job No P876 as per normal costing? (2)

b) What is over/ under applied overheads for the month (3)

Rs Over/under applied

If company applies the overheads on the basis of machine hours:

a) What is the cost of Job No P876 as per normal costing? (2)

b) What is over/ under applied overheads for the month (3)

Rs Over/under applied