From the following data construct a manufacturing account for the year ended 31 December 2015. £ Purchases of raw materials 89,500 Opening inventory: Raw materials 12,450 Work-in-progress 43,100 Carriage inwards 875 Returns outwards 2,190 Labour costs: Factory supervisors 29,000 Manufacturing wages 87500 Depreciation of factory equipment 5,600 Rent 18,000 Additional information: 1Rent is to be apportioned between factory overheads and office expenses in a 3:1 […]

The manager of a business has budgeted to produce 600,000 units of output in 2017. The standard quantities for this budgeted output level are as follows: Materials (metal) 450,000 m2 Materials (fabric) 200,000 m2 Labour 50,000 hours If actual output fell short of budgeted levels and was 40 per cent less than expected, at 360,000 units of output, we should ‘flex’ these standard quantities to […]

A kitchen fitter works a 45-week year and for 36 hours per week. He estimates that his overheads for the year will be £9,000. When billing customers, the fitter may wish to include a fraction of his overall overheads into the cost of each ‘job’ he performs for customers and he does this on the basis of the time of each job completed. This means […]

For the following business, the data relating to the production of one unit is as follows: Standard materials cost = 4 kg at £3.00 per kg = £12 per unit Standard labour cost = 2 hours at £5.00 per hour = £10 per unit If the budgeted output level is 500 units, the standard cost would be as follows: £ Materials (2,000 kg) 6,000 Labour […]

Using the OAR data calculated for Rand Ltd we can calculate the following job. An order was received for 500 steel pipes. The costing data for this order is as follows: Direct costs per steel pipe £ Direct materials 4.50 Direct labour 6.00 The job passes through each of the production departments as follows: Machine hours Direct labour hours Cutting 200 70 Moulding 350 90 […]

The following data are available for a firm which manufactures one type of product: Per unit Variable overhead 10 hours @ £2.50 per hour Fixed overhead 10 hours @ £4.00 per hour The OARs for the variable and fixed overheads were calculated on the basis of labour hours. Budgeted output for the period was 2,000 units. Actual data for the period were recorded as follows: […]

Nutt Ltd produces clothing for the retail trade. A small retail store, ‘Fashion Craze’, has approached Nutt Ltd for a quotation to supply them with a bulk order for 50 pairs of leather trousers. The following information is estimated: Materials £10 per pair Direct labour: Cutting £6 per hour Sewing £8 per hour Processing £5 per hour Each pair of trousers will require 1 hour […]

Lamb Ltd is constructing a new college building for a local authority. The contact begins in 2014 and the price agreed for the college is £6 million. However, the college in unlikely to be completed until 2016 owing to extensive remedial work being necessary, and Lamb Ltd will incur the following costs: 2014 £1.8 million 2015 £2.2 million 2016 £0.8 million The profit on the […]

Flower Ltd produces computer desks. The cost of making one desk has been calculated as follows: £ Wood 10 Labour 15 Overheads 5 30 As at 31 December 2017, the business has 30 finished desks in stock, but also 20 desks which are estimated to be 75 per cent complete and 10 desks estimated to be 50 per cent complete. The cost value of these […]

The following is the balance sheet of M/s P & Q as on 31 March 2011: Liabilities Assets Sundry Creditors 80,000 Land & Building 4,00,000 Mrs. P”s Loan 3,60,000 Plant & Machinery 3,20,000 Capital Accounts Stock in Trade 1,20,000 P:4,80,000 Sundry Debtors 2,00,000 Q:3.20.000 8,00,000 Investments 1,60,000 Cash at Bank 40,000 12,40,000 [2,40,000 Profits were shared as two-thirds to P and one- thirds to Q. […]