CAT 1 MA SEPTEMBER 2024

What is the correct entry in the cost ledger to record the over‐absorption of production overhead?

Debit                                             Credit

Which of the following statements describes cost centers?

What does production overhead comprise?

The following unit costs were incurred in producing 600 units of a product in April:

75% of the semi‐variable costs are fixed costs. Production for May is budgeted to be 500 units.

The budgeted total production cost for May is Shs...

A company uses the economic order quantity formula (EOQ) to establish its optimal re‐order quantity for its single raw material. The following data relates to the inventory costs:

Purchase price:  Shs.15 per item

Carriage costs:   Shs.50 per order (irrespective of order size) Ordering costs:  Shs.5 per order

Storage costs:    10% of purchase price plus Shs.0.20 per unit per annum Annual demand is 4,000 units.

What is the EOQ (to the nearest whole unit)?

If a company wanted to ensure that its cost of production included the most recent cost for material, what would be the best inventory valuation method?

Employee A is a carpenter and normally works 36 hours per week. The standard rate of pay is Shs. 6.60 per hour. A premium of 50% of the basic hourly rate is paid for all overtime hours worked. During the last week of October, Employee A worked for 42 hours. The overtime hours worked were for the following reasons:

Machine breakdown                                                        4 hours

To complete a special job at the request of the customer:    2 hours

How much of Employee A’s earnings for the last week of October would have been treated as direct wages?

Which of the following is NOT normally a reason for determining the absorption cost of a product?

For the budget period, the store overhead in an engineering company was Shs.82, 100. It is to be re‐apportioned based on estimated requisitions to be issued in the period.

The business has four cost centres serviced by the store cost centre, and data relating to the budget shows:

The amount re‐apportioned to the Finishing cost centre would be    

A company has put together a standard cost card for its single product as shown below. Budgeted monthly production is 2,500 units.

Shs

The activity level in December was not the same as budgeted and the data from the cost card was used to recalculate the budgeted profit for the actual activity level using a marginal costing system. The flexed budget showed a profit of Shs.54, 500.

Actual costs in December were as budgeted except for materials which were 20% more expensive and variable overheads which were 30% cheaper.

Using a marginal costing system the actual profit for December would be?        

A company uses marginal costing. In valuing inventory of finished goods which of the following would NOT be included in the valuation?

Bay Agricultural Engineers is preparing a quote for Job 731. The costs and other related information includes:

Shs.

Raw materials                          4,250

Direct labour                           7,200

Production overhead                 Shs.5.50 per labour hour

Administrative overhead           10% of production cost

Profit margin                            25% of selling price

Note: Direct labour is paid Shs.7.20 per hour.

The sales price of Job 731 to the customer would have been   (round to the nearest Shs.)

A job cost estimate includes 630 productive labor hours. In addition, it is anticipated that idle time will be 10% of the total hours paid for the job. The wage rate is Shs.12 per hour.

What is the total estimated labor cost for the job?

Perth operates a process costing system. The process is expected to lose 25% of input and this can be sold for Shs.8 per kg.

Inputs for the month were:

Direct materials                     3,500 kg at a total cost of Shs.52, 500

Direct labour                         Shs.9, 625 for the period

There is no opening or closing work‐in‐progress in the period. The actual output was 2,800 kg.

What is the valuation of the output?

In a 30‐day period, a restaurant was open for 9 hours per day. Costs incurred in the period totaled Shs.65, 124. The following additional information is available:

The cost per customer was      

A company has established the following information for the costs and revenues at an activity level of 500 units:

Shs.

Direct materials                                  2,500

Direct labor                                         5,000

Production overheads                          1,000

Selling costs                                       1,250

–––––

Total cost                                            9,750

Sales revenue                                    17,500

––––––

Profit                                                  7,750

––––––

20% of the selling costs and 50% of the production overheads are fixed overall levels of activity.

The profit at an activity level of 1,000 units would be Shs.      

Vincent is preparing a cash budget for July. His credit sales are as follows.

Shs.

His recent debt collection experience has been as follows:

Vincent can expect to collect ……….from credit customers during July.