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2006

Question # 1

 

Calculate Prime cost and conversion cost from the data given below:

 

Stock levels                         O/S (Rs.)                                C/S (Rs.)

            Raw material                       150,000                                   115,000

            Work in process                   50,000                                    55,000

            Finished goods                  120,000                                  100,000

 

o       Purchase of raw material during the period Rs. 100,000

o       Transportation charges of items purchased Rs. 5,000

o       Paid to labour Rs. 100,000.

o       Other production costs(FOH) Rs. 80,000

 

Question # 2

 

Calculate working capital from the data given below:

 

Cash                                                  300,000

Marketable securities                    200,000         

Accounts receivables                   500,000

Inventories                                       900,000

Good will                                          200,000

Accounts payables                                    500,000         

Notes payables                               700,000

Accruals                                           200,000

Premium on shares                                   100,000

 

 

Solution

Ans 1:

 

A- Value of Prime Cost

 

A&B CO.

Cost Sold Statement

For the year ended_________

 

 

Particulars

   Amount                                                    (Rs.)

   Amount                                                       (Rs.)

Raw material:

 

 

                    Opening stock

 

1,50,000

           Add Purchases

1,00,000

 

           Add Transportation charges

5000

1,05,000

                    Cost of material to be used

 

2,55,000

           Less Closing stock

 

1,15,000

                    Cost of material consumed

 

1,40,000

Conversion cost:

 

 

           Add Direct labor cost

 

1,00,000

                       Prime cost

                    

2,40,000

 

 

 

B- Value of Conversion Cost

 

                  Labor Cost                             Rs. 1, 00,000

Factory Overhead Cost        Rs.   80,000

                                                Rs. 1, 80,000

                    

                    

 

 

 

 

 

 

Ans: 2

 

The Formula of working capita is:

 

Current Assets – Current Liabilities

 

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