Scribd
Upload
39 views3 pages

ACC306-2022-2 (1) (1)

Uploaded by

bababonet360
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
39 views3 pages

ACC306-2022-2 (1) (1)

Uploaded by

bababonet360
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 3

Click

Click to
to download
download
A-PDF Watermark more
more
DEMO: Purchase NOUN
NOUN PQ
from www.A-PDF.com PQ from
from
to remove NounGeeks.com
NounGeeks.com
the watermark

NATIONAL OPEN UNIVERSITY OF NIGERIA


Plot 91 Cadastral Zone NnamdiAzikiwe Express Way, Jabi-Abuja
FACULTY OF MANAGEMENT SCIENCES
DEPARTMENT OF FINANCIAL STUDIES
2022_2 EXAMINATION

Course Code: ACC 306 Credit Unit: 3


Course Title: Cost Accounting
Time Allowed: TWO AND HALF HOURS
Instructions:
1. Attempt Question 1 and any other three (3) Questions.
2. Question 1 is compulsory and carries 25 marks while the other 3 Questions
carry 15 marks each.
3. Present all your workings in a coherent and orderly manner.
QUESTION ONE
a. Henry ltd uses 30,000 realms of paper each year for production of books. Ordering costs
per order is ₦75, holding cost per unit of inventory for a year is ₦4.50. Currently the
company places 6 orders of 5,000 units. Use the formula to compute.
i. The economic order quantity
ii. Total cost of order
iii. How much will Henry ltd save if it adopts the EOQ instead of the present policy of
purchasing 5,000 realms per order

b. Ned manufacturing ltd produces umbrella for the year ended 31st December, 2020. Ned
produced 10,000 umbrellas with the following total costs
Direct material cost ₦40, 000
Direct labour cost 70, 000
Factory overhead 20, 000
Selling expenses 12, 500
Administrative expenses 28, 800
During the year, Ned sold 9800 units at ₦24 each. Opening stock of finished goods was 630
units with a total cost of ₦8,190. There was no opening and closing stock of raw materials and
work in progress.
You are required to:
i. Calculate the unit cost of the following:
-Direct material cost
- Direct labour
-Factory overhead
- Prime cost
-Conversion cost
ii. Determine the cost of goods manufactured and cost of goods sold
iii. Prepare an income statement for Ned manufacturing company for the year ended
31st December, 2020. (25 marks)

1
Click HERE to Practice NOUN Mock E-exams on NounGeeks
Click
Click to
to download
download more
more NOUN
NOUN PQ
PQ from
from NounGeeks.com
NounGeeks.com
QUESTION TWO

a. State any five factors to be considered when determining the remuneration method to be
adopted in an organization.

b. The wage rate of BCD ltd is ₦50 per hour. Number of hours worked are 60,000 per
annum. The overhead per annum amounts to ₦500,000. Total unit produced is 150,000 units of
product Z per annum.
(i) Determine the unit cost of product Z
(ii) In order to obtain greater productivity, BCD has decided to increase the wage rate to ₦60 and
unit produced to 200,000 units. What will be the reduction in unit cost?

c. The performance method of Mr Dauda in Agro ltd shows the following:


Standard output allowed 250 units in 1 hour
Actual production 5000 units in 15 hours
Normal day rate ₦2000 per hour
Required:
Calculate the (i) bonus and (ii) total earnings of Mr Dauda using Rowan bonus scheme
(15 marks)

QUESTION THREE

a. Distinguish between cost allocation and cost apportionment.


b. Calculate the depreciation in the following cases:
i. A machine which has a useful life of 10 years costs ₦2M. It is estimated that
salvage value of the machine at end of the 10th year will be ₦350,000. Calculate
the yearly depreciation using straight line method.
ii. A building costing ₦3.5M is to be depreciated at the rate of 15% per annum.
Calculate the depreciation for the first five years using reducing balance method.
iii. An ice block making machine costing ₦2.5M was installed to mould ice block in
cubes. Each operation produces 100 cubes. It is estimated that the machine will
produce 2,000,000 cubes before it is replaced. Calculate the depreciation for the
month using production unit method assuming 5000 operations were carried out.
(15 marks)

QUESTION FOUR

a. Briefly define the terms ‘Marginal costing’ and ‘Absorption costing’.


b. The following are the cost and revenue of Dele ltd for period 1. Total unit of M produced
and sold was 50,000 units.
₦
Sales 400, 000
Production cost -variable 140, 000
2
Click HERE to Practice NOUN Mock E-exams on NounGeeks
Click
Click to
to download
download more
more NOUN
NOUN PQ
PQ from
from NounGeeks.com
NounGeeks.com
Production cost- fixed 60, 000
General overhead fixed 100, 000
Prepare two operating statements using marginal and absorption costing method

c. Assume the same data in (a) except that unit sold is 45,000. Prepare the operating
statement using marginal costing and absorption costing
(15 marks)

QUESTION FIVE

a. Distinguish between activity based costing and secondary apportionment of overhead


b. Explain the steps involved in the implementation of activity based costing
c. The performance of the managers of profit centre is measured by profit generated. List and
explain five different measures of profitability for divisional performance evaluation.

3
Click HERE to Practice NOUN Mock E-exams on NounGeeks

You might also like