Cost Accounting

Assignment # 01

Instructions:
 Solve the following Problems which are given below
 You have to try to solve all questions no marks will be deducted for any wrong answer
 Assignment should be hand written and having cover page in which your name and
registration number is clearly mentioned.
 Formulas which are used in this assignment are given below
 Deadline: 5TH February 2020

BASIC FORMULAS
Prime Cost = Direct material + Direct labour

Conversion Cost = Direct labour + Factory overhead

Factory Overhead = Indirect material + Indirect labour+ Indirect expenses Manufacturing

Cost / Factory Cost = Direct material + Direct labour + Factory overhead

Direct Material Used = Raw material (beginning) + Net purchases of raw material – Raw
material (ending)

Net Purchases of Raw Material =Purchases of raw material + Transportation in – Purchase

discount - Purchase return & allowance

SCHEDULE FOR RAW MATERIAL CONSUMED OR DIRECT MATERIAL

Opening Raw Material xxx

Add: Raw material Purchases xxxx
Less: Purchases - Return (xxx)
Purchases - Discount (xxx)
Add: Transportation- In xxxx
Total Purchases of Raw Material xxxxx
Raw Material Available for Consumption xxxxx
Less: Raw Material- Ending (xxxx)
Raw Material Consumed Xxxxx
 Cost & Management Accounting

Problems

Q.1
Prime Cost = Rs. 600,000 which is 75% of Factory
Cost Direct Labour = 250,000
Factory
Compute: i) Overhead ii) Conversion Cost
Hint :
600,000/0.75 = 800,000 which Is Factory cost
Q.2
Prime Cost = Rs. 540,000 which is 60% of Factory
Cost Direct Labour = 240,000
Factory
Compute: i) Overhead ii) Conversion Cost

Q3
Material =Rs. 120,000 [ 15 % Indirect]
Labour = 150,000 [75% Direct ]
Rent = 25,000 [40% Office ]
Fuel & Power = 40,000 [ 100% Factory ]
Utilities Expense = 8,000 [25% Factory ]
Supervisor Salaries = 1,800 [100% Factory ]
Depreciation = 45,000 [ 15 % Furniture, 25% Factory Building, 15% office

Compute: i) Prime Cost ii) Factory Over Head

iii) Factory Cost iv) Conversion Cost

Q.4. Raw Material – Consumed Rs. 60,000

Raw Material - Return 4,000
Raw Material - opening 15,000 Raw Material - ending 80% of Opening
Find Raw Material Purchased?