Q no 1

The December 31, 19B trial balance of the Balkwell Company showed:
Sales
$4,000,500 Sales returns and
allowances $25,200
Purchases (net) 2,400,000 Transportation in 32,000
Direct labor 3,204,000 Factory overhead 1,885.600

Sales salaries 200,000 Advertising

expense
155.0.00

Delivery expense 65,000

Inventories:
DECEMBER 31,19. B DECEMBER 31, 19.A

Finished goods $467,400 $620.000

Work in process 136,800 129,800

Materials 196,000 176,000

Required:
(1) Total manufacturing cost.
(2) Cost of goods manufactured.
(3) Cost of goods sold.
Q no. 2
Income statement; profit percentage. The Shelikoff Company
submits the foltzowing information on December 31,19 --:

Sales for the year' $314,000

Inventories at the beginning of the year:
Finished goods 5,900
Work in process 4,600
Materials 3,800
Purchases of materials for the year 140,000
Direct labor 67.350
Factory overhead: 50% of labor cost
Inventories at the end of the year:

Finished goods 9,270

Work in process 6,200
Materials 4.300
Other expenses for the year:

Marketing expenses 23,115

Administrative expenses 17,650

Required:
(1) An income statement for the year ended December 31, 19 --.
(2) The percentage of income to sates, before income tax.
Q no. 3.

The following data are provided by the controller of the Metaxen

Corporation:
Cash $240,000
Accounts receivable 348,000

Inventories:
J ANUARY 1 DECEMBER 31
Finished goods $44,200 $66,000

Work in process 29,800 38,600

Material 88,000 64,000

Materials purchased
$366,000

Sales discount
8,000

Factory' overhead (excluding depreciation)

468,400
Marketing and administrative expenses(excluding
depreciation) 344,200
Depreciation (90% manufacturing, 10% marketing and
administrative expenses) 116,000,
Sales
1,844,000
Direct labor
523,600
Freight on materials purchased
6.600
Rental income
64,000
interest on bonds payable 16,000

Required: Cost of goods sold statement.

Q no. 4

The records of Reinecke, Inc., show the following

information as
of March 31, 19B:

Materials used $440,000

Direct labor 290,000
Indirect labor 46,000
Light and power 4,260
Depreciation 4,700
Repairs to machinery 5,800
Miscellaneous factory overhead 29,000
Work in process inventory, April 1,19A 41,200
Finished goods inventory, April1, 19A 34,300
Work in process inventory, March 31, 19B 42,500
Finished goads inventory, March 31. 193 31,530
During the year, 18,000 units were completed.

Required:
(1) A cost of goods sold statement for the year ended
March 31, 19E3.
(2) The unit cost of goods manufactured.
Q no. 5.
The records of the YR company shows the following information for
the three months ended March 31, 19…

Material purchased Rs. 1946700

Inventory, January 1, 19--
Material 43,000
Direct labour 2,125,800
Factory overheads(40% Variable) 764,000
Marketing expenses (All fixed) 516,000
General and administrative expenses (All Fixed) 416,000
Sales (12,400 refrigerators) 6,634,000
Inventories March 31, 19--
No unfinished work in process on hand ---
Finished goods inventory (200 refrigerators), costed ?
at Rs. 395 each
Material 167,000

Required:
(a) An income statement for the period
(b)The number of units manufactured
(c) The units cost of refrigerators manufacturing
(d)The gross profit per unit sold
(e) The income per unit sold
(f) The ratio of gross profit to sales
(g) The income to sales percentage

Q no. 6
On October 1, the Florida Company had the following inventories:
materials, $24,000; work in process, $12,000; and finished goods,
$36,000.-During the month, materials purchases totaled $56,000.
Direct labor for October was $40,000, at a uniform wage of $6.40 per
hour. Marketing and administrative expenses for the month
amounted to 10% of net sales. Inventories on October 31 were as
follows: materials, $20,000; work in process, $8,000; and finished goods,
$40,000. Net sales for October totaled $200,000. Factory overhead is
applied on the basis of $8,per direct labor hour.
Required:
(1) Prime cost.
(2) Conversion cost.
(3) Cost of goods manufactured.
(4) Cost of goods sold.
(5) Income from operations

Q no. 7
In June, Steinhardt, Inc., sold 50 air conditioners for $200 each. Costs
included materials costs of $50 per unit, direct labor costs of $30 per
unit, and factory overhead at 100% of direct labor cost. Interest
expense on an 8% bank loan was equivalent to $2 per unit. Federal
income tax at a 30% rate was equivalent to $15 per unit.
Effective July 1, materials costs decreased 5% per unit and direct
labor costs increased 20% per unit. Also effective, July 1, the interest
rate on the bank loan increased from 8% per annum to 9% per annum.
Assume in requirements (1) and (2) that the expected July sales
volume is 50 units, the same • as for June.
Required:
(1) The sales price per unit that will produce the same ratio of
gross profit, assuming no change in the rate of factory overhead
in relation to direct labor costs.

(2) The sales price per unit that will produce the same 'ratio of
gross profit, assuming that $10 of the June factory overhead
consists of fixed costs and that the variable factory overhead
ratio to direct labor costs is unchanged from June
Q no. 8.
Robidaux Products, Inc., a small manufacturing company, produces
a highly flammable cleaning fluid. On May 31, 19F, the company had a
fire which completely destroyed the processing building and the
work in process inventory; some of the equipment was save
After the fire, a physical inventory was taken. The materials were
valued at $30,000, the finished goods at 560,000, and supplies at
$5,000.
The inventories on January 1, 19F, consisted of:
Finished goods $ 70,000
Work in process 50,000
Materials 15,000
Supplies 2,000
Total $137,000

A review of the accounts showed that the sales and gross profit
for the last five years were:
SALES GROSS PROFIT
$ $
19A 300,000 86,200
198 320,000 102,400
19C 330,000 108,900
19D 250,000 62,500
19E , 280,000 84,000
The sales for the first five months of 19F were $150,000; materials
purchases were $50,000; freight on purchases was $5,000; direct
labor for the five months was $40,000. For the past five years,
factory overhead was 50% of direct labor cost.

,Required: The value of the work in process inventory lost by fire.

 Q no. 9
The Davies Equipment Company manufactures machines to customers'
specifications. Two requests for bids have been received, each calling for the
delivery of -one machine with the following shop and cost specifications:
BID No. 1 BID No. 2
Parts to be purchased $550 $900
Materials: bar, strip, and sheet metal 130 190
Pig metal for castings 56 80
DIRECT LABOR HOURS
Bid No. 1 Bid No. 2
Foundry 6 hrs. 8 hrs.
Machining 8 20
Electroplating and painting 6 12
Assembly 40 70
Installing 0 16
Labor and overhead hourly rates:
FOUNDRY MACHINING E&P ASSEMBLY INSTALLING
Direct labor rate per hour $8.25 $7.50 $8.40 $8.00 $7.00
Factory overhead rate
per direct labor hour ........... 3.25 3.00 2.50 2.60 1.80
A Allowance for spoilage and estimating error, 5% of direct labor and materials
cost (including parts purchased). Allowance for marketing and administrative
expenses and profit, 35% of sales.

Required: The bids for the two possible orders.

Q no. 10.
An important feature in the installation of any accounting or costing system is the
proper classification
of accounts. The Bottlers Limited, bottlers and distributors of beverages,
have recently introduced a new classification which includes the following
accounts:
1. Samples 13. Freight out
2. Sugar 14. Income tax
 3. Factory payroll 15. Advertising
4. Foreman's salary 16. Rent of office building
5. Conveyance and traveling 17. Labeis
6. Factory's clerical salaries 18. Depreciation on machinery
7. Drivers' wages 19. Insurance
8. Gas, oil and grease 20. Water
9. Depreciation of furniture & fixtures 21. Truck tyres
10. Salesmen's salary and commissions 22. Bottle breakages
11. Light and power 23. Telephone and communication
12. Legal and audit fee 24. Stationery
Classify each account under one or more of the following headings:
• Manufacturing
• Selling and Distribution
• Administration

Q no. 11
Inventory balance of Wadar Corporation at the end of its financial year were as follows:

January December
01, 1993 01, 1993
Finished Goods 100,000 72,000
Work-in-process 160,000 192,000
Materials 88,000 120,000
Following transaction occurred during the year:
Materials purchases. 1,200,000
Supplies & indirect Materials purchases. 200,000
Direct labour cost 480,000
Indirect labour 240,000
Depreciation-Factory building 80,000
Depreciation-Office building (50% to sales 50% to office) 60,000
Utilities-75% to factory, 10% to Sales & 15% to office. 200,000
Supplies and indirect material issued. 160,000
Factory overhead is applied at the rate of 125% of direct labour cost
Sales salaries 160,000
Office Salaries 96,000
Sales on account 2,920,000

Over or under applied factory overhead is deducted from or added to cost of goods sold.

Required:
i) A Cost of Goods Sold statement.
ii) An Income Statement.
Q no. 11

The following data, in respect of New Cool Co. Ltd., manufacturing AIR COOLERS, for
the year 1990,is made available to you:

Rupees
Raw Material purchased 2,728,000
Direct Labour 825,000
Fuel consumed 1,260,000
Indirect Labour 206,800
Custom Duty Paid 532,000
Works Manager's Salary 95,800
Purchase Discount 20,400
442,700
Factory Depreciation
12,600
Profit on sales of fixed Assets
31,500
Interest income
168,000
Raw Material – opening
198,600
Raw Material Closing
183,000
Work in process Opening Inventory
104,700
Work in process Closing Inventory
228,795
Finished Goods Opening inventory
300,000
Dividend Paid
600 Units
Air Coolers – Opening Inventory
840 Units
Air Coolers – Closing Inventory
Air Coolers sold during the year 7,760 units @ 1440/-

You are required to prepare:-

1> The cost of Good Sold Statement
2> Units Cost of finished Good Inventory
3> Gross Profit
Q no. 12

Electronic amplifiers are the main products of Hydel & Co. (Private) Limited. The
following information relates to Company's transactions for the month of March,
1986 and has been taken form the adjusted trial balance for that month:
Inventories on March 1, 1986:
Rupees
Raw materials 24,080
Work in process 47,130
Finished goods 34,842
Raw materials purchased 148,580
Repairs and maintenance 5,924
Gas Light and Power 14,565
Indirect materials 3,480
Indirect Labour 25,024
Direct Labour 74,500
Supervisors' salaries 14,290
Inventories at March 31, 1986:
Raw materials 37,144
Work in process 49,460
Finished goods 32,956

Required: The following computations for March, 1986:

(a) Cost of materials used.
(b) Cost of goods manufactured.
(c) Total cost of goods sold.

Q no. 13.
M/s. PAKSAF Ltd., manufacturers of Washing Machines have fixed the Selling Price of
their Machines at Rs.2,000. During the month of September 1983, their output was
300 Machines. Their working expense booked during the month were as follows:

Rupees
Raw Material Cost 153,090
Wages & Salaries:
Factory wages 86,910
Office staff salaries 38,223
Showroom salaries 27,200
Power 25,500
Rent and Rates:
Factory 39,000
Office 9,300
Showroom 9,200
Heating and :Lighting:
Factory 15,000
Office 4,401
Showroom 2,650
General expenses:
Factory expenses 10,200
Office contingencies 3,966
Showroom miscellaneous 5,650
 Rupees
Depreciation:

Machinery and Factory building 9,300

Office equipment’s 1,110
Showroom fixtures 300
Washing Machines sold during the month- 250 Pcs. Provide10% commission on Sales
for the Salesmen.

Draw up a cost statement showing the "Prime Cost" ,"Factory Cost" and
"Total cost (including administrative expenses but not selling expenses) per
Washing Machine and calculate the Net Profit realized per Machine sold,