PUNJAB COLLEGE CHAKWAL

BI-M O N T H L Y T E S T -F E B .2017
B.COM
Class Subject COST A/C Date 28-02-2017
II
T.M 50 Time: 90 MIN Class BQ1

Q.1 In pricing the gallons of Petrol sold, service station “Y” follows the “FIFO” while
service station “Z” follows the “LIFO” method of stock valuation. On February 01,
both had the same quantity in stock that is 6000 gallons Rs. 26 per gallon.

During the month each station received additional supplies of 6000 gallons Rs.
28.50 per gallon. Sales of each of these two stations during the month were 8800
gallons at the rate of Rs. 29.50 per gallon.

Required: Determine for each service station the profit earned during the month and
the value of petrol in stock at the close of the month. (15)

Q.2 A manufacturing company estimates its carrying cost at 15% and ordering cost at
Rs. 9 per order. The estimated annual requirement is 48, 000 units a price of Rs. 4
per units.

Required: i) What is most economical order quantity ii) How many orders need to be
placed? iii) Frequency of orders in days iv) A table showing the poof of correctness of
your above calculations. (20)

Q.3 The following figures have been extracted from the books of a manufacturing
concern. All jobs pass through the company’s two departments.
Production Dept. Finishing Dept.
Material Used 600, 000 50, 000
Direct labor 300, 000 150, 000
Factory overhead 180, 000 120, 000
Direct labor hours 12, 000 5, 000
Machine hours 10, 000 2, 000
Following information pertain to Job No. 111
Production Dept. Finishing Dept.
Material Used 600, 000 50, 000
Direct labor 300, 000 150, 000
Factory overhead 180, 000 120, 000
Direct labor hours 12, 000 5, 000
Machine hours 10, 000 2, 000
Required: 1) Calculate departmental factory overhead absorption rates using four
different bases. 2) Calculate cost of Job No. 111 under any three rates
calculated in requirement (1). (15)