Lcci Past Exam Papers Text Production Essay

Unformatted text preview: SERIES 2 EXAMINATION 2002 COST ACCOUNTING SECOND LEVEL (Code No: 2016) THURSDAY 11 APRIL ________ Instructions to Candidates (a) The time allowed for this examination is 2 hours 30 minutes. (b) Answer 5 questions. (c) All questions carry equal marks. (d) All answers must be clearly and correctly numbered but need not be in numerical order. (e) Your answers should be written in blue or black ink/ballpoint. Pencil may be used only for graphs, charts, diagrams, etc. (f) Presentation is important. (g) Candidates may use calculators provided the calculators give no printout, have no word display facilities, are silent and cordless. The provision of batteries and responsibility for their condition must rest with the candidate. (h) It is recommended that candidates show essential workings. _________ 2016/2/02/F 1 ASE 2016 2 02 1 >[email protected]`[email protected]# QUESTION 1 Costing for production overheads is concerned with relating indirect costs to cost centres and then to cost units. This involves the procedures of allocation, apportionment and absorption. REQUIRED (a) Give 3 examples of production overhead which may be allocated to specific cost centres. (3 marks) (b) Give an appropriate basis of apportionment for the following overhead items: (i) (ii) (iii) (iv) (v) (vi) Factory rent Electricity for factory heat and light Insurance of factory machinery Depreciation of factory equipment Factory employees canteen Materials handling (12 marks) (c) Name 2 suitable methods by which production cost centre overhead can be absorbed into product costs. State briefly the circumstances in which the application of each method would be appropriate. (5 marks) (Total 20 marks) QUESTION 2 The following balances were recorded in the accounts of Fasan Ltd at the end of period 4: £000 300 135 150 Finished Stock Control Material Control Work-in-progress Control The transactions for period 5 included the following: £000 129 465 458 108 292 10 255 26 Production overhead absorbed Production cost of goods sold Completed production at cost Direct wages Raw materials purchased Returns outwards Issued from stores: Direct materials Indirect materials REQUIRED Prepare the following control accounts for period 5: (a) Finished Stock Control (5 marks) (b) Material Control (8 marks) (c) Work-in-progress Control. (7 marks) (Total 20 marks) 2016/2/02 2 QUESTION 3 Links Ltd produces a single product and has prepared the following budgeted information concerning total costs: Administration overhead Selling and distribution overhead Production overhead Direct labour costs Direct material costs £000 90 210 220 450 420 (100% fixed) (50% fixed; 50% variable) (30% fixed; 70% variable) (40% fixed; 60% variable) You are informed that: (1) The budgeted figures above are based on the production and sale of 5,200 units. This is equal to 65% of production capacity. (2) The budgeted selling price is £450 per unit. (3) There are no opening or closing stocks. REQUIRED (a) Calculate the contribution per unit. (6 marks) (b) Prepare a marginal costing statement to show the profit at the budgeted level of production and sales. (4 marks) (c) Calculate the breakeven point in units and in sales value. (6 marks) (d) An enquiry from Recat Ltd offering to pay £238 per unit would utilise the spare production capacity. The only extra costs that would be involved would be in respect of variable costs. Should this offer be accepted or rejected? (4 marks) (Total 20 marks) 2016/2/02 3 OVER QUESTION 4 Newpro Ltd uses the straight line method to calculate deprecation. At 31 December 2001 a change to an alternative method is under consideration. You are informed that: Machinery at cost, £40,000, was bought on 1 January 2000. It was estimated to have a 4 year life and a residual value of £1,024. Total contribution, for the year ended 31 December 2001, was £60,000. Total fixed cost, for the year ended 31 December 2001, was £49,744. (This includes depreciation calculated on the straight line basis.) Machine hours: Years 2000 2001 2002 2003 Hours 9,756 9,720 9,780 9,720 REQUIRED (a) Calculate the depreciation charge for the year ended 31 December 2001 using each of the following methods: (i) Straight line (ii) Reducing (or diminishing) balance (iii) Machine hour. (2 marks) (5 marks) (3 marks) (b) Prepare statements to show what the profit for the year ended 31 December 2001 would be if each of the methods in (a) above were applied. (7 marks) (c) The straight line method is commonly used. State briefly why you think this method is preferred to other methods. (3 marks) (Total 20 marks) 2016/2/02 4 QUESTION 5 Hebel Ltd employs 24 direct operatives in the assembly department. Wages are paid on a time basis at £5.50 per hour. The output per employee is 80 units per 40-hour week before inspection during which 5% of units produced are normally rejected. Management proposes to increase the hourly rate by 20%. It is estimated that the weekly output per worker before inspection would then increase by 25%. The rejection rate would be expected to increase to 10% of units produced. Rejects have no scrap value. REQUIRED (a) Calculate to 3 decimal places of £: (i) the present direct labour cost per good unit of output (6 marks) (ii) the proposed direct labour cost per good unit of output. (6 marks) (b) Calculate the additional good units that would be expected to be produced per week if the gross hourly rate is increased by 20%. (4 marks) If the proposal is accepted, it is estimated that the direct material cost of the product will be £2.067 per good unit and production overheads will be £1.50 per good unit. The selling price is £8 per unit. REQUIRED (c) Calculate the gross profit per week, assuming all units are sold and no stocks are held, if the proposal is accepted. (4 marks) (Total 20 marks) 2016/2/02 5 OVER QUESTION 6 (a) Sauber Ltd produces a cleaning product. During a month 18,000 units were completed and 2,400 units were partially completed. There was no work-in-progress at the beginning of the month. You are informed that: Total cost in the month: Materials £37,620 Labour £25,428 Overheads £21,252 The degrees of completion of the closing work-in-progress are Materials 75%, Labour 65% and Overheads 55%. REQUIRED Calculate for the month: (i) the equivalent units of production for each element of cost (4 marks) (ii) the cost per equivalent unit (4 marks) (iii) the total value of work-in-progress at the end of the month. (4 marks) (b) Werden Ltd produces 3 joint products, Product K, L and M. The following information relates to a month: Product Sales value of output Weight of output (kg) Joint process costs K £72,000 540 £105,000 L £54,000 720 M £45,000 450 Selling costs are 10% of sales value. Joint process costs are apportioned on the sales value basis. REQUIRED Prepare a statement to show the profit made by each product in the month, assuming that all production was sold. (8 marks) (Total 20 marks) 2016/2/02 6 © LCCI CET 2002 Education Development International plc The Old School Holly Walk Leamington Spa Warwickshire CV32 4GL United Kingdom Customer Service: +44 (0) 8707 202 909 Fax: +44 (0) 1926 887676 Email: [email protected] ...
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- Я просто… - Сьюзан Флетчер.  - Женщина улыбнулась и протянула ему тонкую изящную руку. - Дэвид Беккер.  - Он пожал ее руку. - Примите мои поздравления, мистер Беккер.

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