Diploma in Accounting Costs and Revenues (CSTR)

Code	Description
1953	Inventory of RM301
3265	Work in progress – PD84
3341	Work in progress – PD27
0080	Trade payables

Complete the Journal below to separately record the FOUR cost accounting entries for the two receipts and two issues during November

Date	Code	Dr £	Cr £
5 November
5 November
12 November
12 November
18 November
18 November
28 November
28 November

Task 3

A company has a profit centre that employs a group of production workers who, as well as earning basic pay are also paid a weekly group bonus based on their productivity during each week.

The group has a standard (target) output of 800 units of production per hour worked.

All output in excess of this level earns a bonus for each of the employees.

 

25% x	excess production (units)
	standard production (units)

The bonus % is calculated as:

 

 

The bonus rate per hour is then calculated as: bonus % x £10

The following information relates to the group’s performance last week:

 

	Hours worked	Actual production (units)
Monday	920	940,000
Tuesday	870	890,000
Wednesday	910	930,000
Thursday	920	960,000
Friday	940	990,000
Saturday	440	690,000
Total	5,000	5,400,000

(a) Complete the table below to calculate the group bonus rate per hour and the total to be paid to the group.

(b) Calculate the total pay for an employee who worked 44 hours last week and is paid a basic rate of £9.60 per hour.

 

 

Task 4

A company has two profit and three cost centres. The budgeted overheads for the next quarter have been identified as follows:

 

The following information is also available:

 

 

Overheads are allocated or apportioned on the most appropriate basis. The total overheads of the support departments’ cost centres are then reapportioned to the two manufacturing profit centres using the direct method.

 

• All overhead costs are fixed with the exception of light, heat and power. 25% of this cost is fixed, based on the floor space occupied and 75% varies with the usage of power.
• The warehouse expects to issue £25.2 million worth of materials to production and £16.8 million worth to finishing.
• The quality assurance department’s time is spent equally between inspecting products in the production department and inspecting products in the finishing department.
• The production planning department spends 75% of its time on the production department and the remainder on the finishing department.
• There is no reciprocal servicing between the three support department cost centres.

 

Use the following table to allocate or apportion the overheads between the cost centres, using the most appropriate basis

	Production £	Finishing £	Warehouse £	Quality assurance £	Production Planning £	Totals £
Depreciation of equipment
Premises insurance and maintenance
Rent and rates
Light, heat and power – fixed
Light, heat and power – variable
Departmental specific costs
Totals
Reapportion warehouse
Reapportion quality assurance
Reapportion planning
Total overheads to profit centres

Task 5

The following information relates to the manufacture of product FG123:

 

Complete the table below to calculate the costs per batch.

 

 

Task 6

 

A company has produced three forecasts of activity levels for the next period for one of its flight routes. The original budget involved flying 5,000 miles, but mileage levels of between 6,000 and 7,000 mile are now more likely.

 

Notes:

• This route is a charter route and the company chartering the aircraft has negotiated a discount of 10% per mile, paid on all miles flown in excess of the 5,000 miles agreed in the original contract.
• Landing and servicing fees are a semi-variable cost. There is a fixed charge of £600,000 plus £50 per mile flown.

 

Complete the table below to profit per mile (in pounds to 2 decimal places) of this contract at both 6,000 miles flown and 7,000 miles flown.

 

 

 

Task 7

Using the information from Task 6, complete the table below to calculate the required number of miles to be flown to achieve a profit of £60,000 on a contract of 5,000 miles.

 

 

 

Task 8

 

The airline pilots’ trade union has planned a three day strike next week. During these three days only those pilots who are not in the union will be available to fly. As a result there will be only 124 hours of pilots’ flying time available between three routes E, F and G.

The following information is available about these routes:

 

Complete the table below to recommend which route(s) should be operated on the three days of the strike to maximise profit on those days.

Task 9

 

The following budgeted information is available:

 

 

Landing and servicing fees are a semi-variable cost. There is a fixed charge of £600,000 plus £50 per mile flown.

 

The actual miles flown by the company was 5,800.

 

 

Complete the table below to show a flexed budget and the resulting variances against this budget. Show the actual variance, in the column headed ‘Variance’ and indicate whether this is Favourable or Adverse by entering F or A in the final column. If neither F nor A, you should enter 0.

 

 

 

 

 

Task 10

 

A company has produced three forecasts of activity levels for the next period for one of its products. The original budget involved producing 50,000 units, but sales and production levels of between 60,000 and 70,000 units are now more likely.

 

Complete the table below to estimate the production cost per unit of product at the three different activity levels.

 

 

 

Task 11

 

The following budgeted annual sales and cost information relate to two different products.

 

 

The budget has now been revised and the latest sales forecasts are 250,000 units for PD5 and 400,000 units for PD8.

 

Complete the table to calculate the budgeted break-even sales and the margin of safety in units and as a percentage for both products.

 

 

 

Task 12

 

Last month a company had the following process inputs for one of its products:

 

Direct materials                   500kgs at £17.20 per kg

Direct labour                       280 labour hours at £10.50 per hour

Overheads absorbed            86 machine hours at £32 per machine hour

 

The following information is also available:

 

• The company expects a normal loss of 5% of input
• All waste is sold for £1.68 per kg
• Actual output for the month was 450kgs
• There were no opening or closing stocks and all output was fully completed.

 

Prepare the process account below for the product for last month.

 

 

 

 

 

Task 13

 

A company has the following budgeted information relating to the manufacture of one of its products PD64.

 

 

All costs are variable except the fixed overheads.

 

The company actually manufactured 58,500 units.

 

Complete the table below to show a flexed budget and the resulting variances against this budget. Show the actual variance, for sales revenue and each cost, in the column headed ‘Variance’ and indicate whether this is Favourable or Adverse by entering F or A in the final column. If neither F nor A, you should enter 0.