THE COUNCIL OF COMMUNITY COLLEGES OF

JAMAICA

EXAMINATIONS AND ASSESSMENT

DEPARTMENT

ASSIGNMENT COVER SHEET

COLLEGE: Portmore Community College CAMPUS: MAIN

STUDENT NAME: CAMILE GILPIN

STUDENT ID
20131547
NUMBER:
PROGRAMME: ASSOCIASOBESTE DEGREE IN BUSINESS STUDIES

COURSE: COST ACCOUNTING

LECTURER: MR. MCGILL

TYPE OF
Final Exam
ASSESSMENT:
DATE
DUE DATE: 12/09/2022 12/09/2022
SUBMITTED:

Plagiarism

Plagiarism is the failure to properly acknowledge the use of another person’s work, or submitting
for assessment, material that is not a student’s own work. This is a form of academic misconduct
and is a serious offence which can lead to severe penalties, up to and including expulsion
(depending on the severity of the case). Please see your CCCJ student handbook for further
information.

Declaration of Authorship and authorisation to verify that it is original:

I CAMILE GILPIN certify that the attached work is my own and that all material which is not my
own has been appropriately cited and referenced.
Signed: __ CG________________________
Date: ____12/09/2022________________________
 Question 1
Part A: Prepare Process A and Process B accounts.

units $
Direct Material 4,000 12,000
add Material 0 0
Direct Wages 0 2,000
Production Overheads 0 2,000
Normal Loss (10% * 4000) (400) (700)
3,600 15,300
Cost per unit = 15,300/3 600 = $4.25

Process A
Details Units CPU. Amts. $ Details Units CPU Amts.

Input Material 4,000 12,000 Normal Loss 400 $1.75 700

(10% * 4000 units)

Direct Material 2,000 Abnormal Loss 100 4.25 425

Production Overhead 24 000 Transfer to Process B 3,500 4.25 14875

4,000 16,000 4,000 16000

units $
Direct Material 5,000 14,875
add Material 0 3,750
Direct Wages 0 1,500
Production Overheads 0 1,875
Normal Loss (10% * 5 000) (250) (625)
4,750 21,375

Cost per unit = 21,375/4,750 = $4.5

Abnormal Gain = 250 + 5050) – 500
= 300 units
 Process B A/C
Units CPU. Amt. Unit CPU. Amt.

Transfer from Process 3,500 4.25 14,875 Normal Loss 250 2.50 625
A

Material added 1,500 2.50 3,750 Finished Goods 5,050 4.50 22,750

Direct Labour 1,500

Production Overhead 1,875

Abnormal gain ___300___ 4.50 1,350 _____ ______

5,300 23,350 5,300 23,350

Part B. Prepare any abnormal loss/gain accounts.

Abnormal Loss A/C
$ $

Process A (400 x 1.75) 700 Profit & Loss 700

____ ____
700 700

Abnormal Gain A/C

$ $

Normal Loss (300 x 2.50) 750

Profit & Loss 600 Process B (300 * 4.50) 1,350
1,350 1,350

Part C. Explain the term Equivalent units.

The idea of equivalent units of production is used to calculate how much money partially finished
products are worth to a business. They are helpful for process costing, which examines the flow of money
across the production process.
Equivalent units quantify the amount of labor put into a set quantity of tangible objects. A company can
simply multiply the quantity of physical goods by the amount of effort done on them to determine
equivalent units. The company would have one comparable unit for two objects that are 50% complete (2
x 50% = 1). The number of equivalent units equals the number of physical things when the goods are
fully finished.
A company can better comprehend how much time and money they have invested in their manufacturing
process by calculating the equivalent units of production. It is a means to determine how much money,
materials, and effort have been used to create objects that are only partially finished.
 Question 2

Part A: Economic order Quantity

EOQ = square root of: [2× Ordering cost ×Annual demand] / holding costs per unit per annum

= square root of: [ 2 × $150 × 19,000 ] / $2

= 1688 units

Part B

i. Average usage = (1600 + 1400)/2

= 1500 units per day

ii. Reorder level = Maximum usage × Maximum lead time.

= ( 1600 × 24 )
= 38400 units

iii. Minimum Control Level = 38,400 – (1500 * 16)

= 38,400 – 24,000
= 14,400 units

iv. Maximum Control Level = (38,400 + 1688) – (1400 * 12)

= 40,088 – 16,800
= 23,288 units
 Part C

FIFO Cost of goods available for Sale Cost of Goods sold Inventory on Hand

cost per Cost of # of cost per

. # of units cost per unit Amount # of units Inventory
unit Goods sold units unit
Purchases: . . . . . . . . .
Mar08 80 $200.00 $16,000 80 $200.00 $16,000 - $0.00 $0
Mar13 60 $230.00 $13,800 45 $230.00 $10,350 15 $230.00 $3,450
Mar20 75 $250.00 $18,750 - $0.00 $0 75 $250.00 $18,750
Total 215 . $48,550 125 . $26,350 90 . $22,200

Closing stock using: FIFO = $ 22,200

Average cost = Total cost of goods available for sale / Total units available for sale
= $48,550/215
= $225.81

Weighted Average Cost Cost of Good Available for Sale Cost of Goods sold Inventory
cost per Cost of # of cost per
. # of units cost per unit Amount # of units Inventory
unit Goods sold units unit
Purchases:
Mar08 80 $200.00 $16,000 . . . . . .
Mar13 60 $230.00 $13,800 . . . . . .
Mar20 75 $250.00 $18,750 . . . . . .
Total 215 $225.81 $48,550 125 $225.81 $28,227 90 $225.81 $20,323

Closing stock using: AVCO = $ 20,323

 Question 3
Part A: Calculate the budgeted overhead absorption rate for each department.
Details A B C D Total
Budgeted Overhead 30,000.00 42,000.00 45,000.00 32,000.00  
Overhead Absorption Base (hrs) 5,000.00 3,500.00 3,000.00 4,000.00  
Budgeted Overhead Absorption Rate $ 6.00 $ 12.00 $ 15.00 $ 8.00  
      14480
Actual Hours per Batch 150.00 850.00 140.00 160.00  
Overhead Applied 900.00 10,200.00 2,100.00 1,280.00  
Labour Hours 150.00 500.00 140.00 160.00  
Labour Cost per hour 6.50 7.00 8.00 6.00  
Total Labour Cost 975.00 3,500.00 1,120.00 960.00 6,550.00

Part B: Calculate the total cost of the batch.

Details (Batch 1000) $
Direct Material 6,200.00
Labour Cost 6,555.00
Overhead Applied 14,480.00
Production Cost 27,235.00
non-Production Overhead (25% of 27,235) 6,809.00
Total Cost of Batch 34,044.00

C. Calculate the cost per unit of batch 1000.

Details $
# of Jars in a Batch 300
Cost per unit (34,044/300) 113.48

Details $
Selling price per unit 190
Cost per unit (113.48)
Profit per unit 76.52