Mgt402 Assignment No. 1 solution

Cost and Management Accounting Spring 2011

Virtual University of Pakistan

COST AND MANAGEMENT ACCOUNTING (MGT402)

Spring Semester 2011

Assignment # 1 Marks: 20

Question # 1: (Marks: 15)

ABC manufacturing company submits the following information on March 31, 2011:

Material used Rs.440,000

Direct labor 290,000

Indirect labor 46,000

Light & power 4,260

Depreciation 4,700

Repairs to machinery 5,800

Miscellaneous factory overhead 29,000

WIP inventory, April 1, 2010 41,200

Finished goods inventory, April 1, 2010 34,300

WIP inventory, March 31, 2011 42,500

Finished goods inventory, March 31, 2011 31,500

The company applies factory overhead on the basis of 30% of direct labor cost.

Required:

The amount of over/under applied factory overhead cost

Adjustment of over/under applied FOH cost in the entire production

Question # 2: (Marks: 5)

Calculate economic order quantity from the given information and also describe its effect if ordering cost and carrying cost is reduced by 2%. (Hint: increase, decrease, no effect)

Annual consumption 120,000 units

Cost to place one order Rs.1,500

Cost per unit Rs.60

Carrying cost 6% of unit cost

Note:

2. You have to do you assignment in that file according to the given format

3. Only answers are required in table,

4. All supporting

5. Ignoring these points will reduce your mark

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