BAF2102 COST ACCOUNTING CAT I AND II DIBEL

QUESTION ONE

A manufacturing company has three department and two service department, overhead allocated to
each of this department are as follows:

Production

A 240,000

B 200,000

C 240,000 680,000

Service departments

X 68,000

Y 27,000 95000

670000

A technical assessment for the appointment of cost of service department show?

Department A B C X Y
X 35% 30% 30% - 5%
Y 40% 25% 20% 15% -
REQUIRED

i) Repeated distribution method 6mks

ii) Simultaneously or algebraic method 6mks

QUESTION TWO

Mao chemical ltd makes a chemical process that passes through three processes in production I,II and
III. In the month of January 2021 6000litres of basic raw materials priced at 240000 were introduced in
the process 1. Subsequently, the following costs were incurred

Element of cost Total I II III

Direct material (additional) 87500 30000 40000 17500

Direct labour 110000 40000 50000 20000

Direct expenses 16900 6000 1600 9300

Normal loss per process were estimated as follows process 1 10% process2 5% process 3 8%

Output of each process was; process1 5300 process 2 5000 process 3 4700
The loss in each process represented a scrap which could be sold for the following value process I shs 20
per unit, process II shs 44 per unit process III sh 65 per unit. There were no stocks of raw materials or
work in progress at the beginning or end of the month.

The output of each process passes directly to the next process and finaly to finished goods inventory.
Production overheads is observed by each process on the basis of 50% of the cost of direct labour

Required

i. Separate process accounts for each of the 3 process 10 mks

ii. Abnormal loss and abnormal gains account 4mks
iii. Scrap debtor account 4mks