NATIONAL OPEN UNIVERSITY OF NIGERIA

UNIVERSITY VILLAGE, PLOT 91, CASDASTRAL ZONE, NNAMDI AZIKIWE EXPRESS WAY, JABI, ABUJA.
FACULTY OF MANAGEMENT SCIENCES
JUNE/JULY 2017 EXAMINATION

Course Code:   ACC 305                                         

Course Units: 3

Course Title:    Cost Accounting

Time Allowed:2 ½ Hours      

Instructions:     1. Attempt question number one (1) and any other (3) questions.

                           2. Question number 1 carries 25 marks, while the other three (3) questions carry 15 marks each.

                           3. Present all your points in coherent and orderly manner

QUESTION 1

Lagos Motors buys certain type of gear box for use in one of it BRT buses. The following is a summary of the receipts and issues of the gear box for the month of July.

Opening stock on 1st July                      200 gear boxes at N145

July 4                                                      Purchased 100 gear boxes at N185

July 8 Issued 50 gear boxes

July 10 Purchase 300 gear boxes at N190

July 11 Issued 200 gear boxes

July 12 Issued 200 gear boxes

July 15 Purchased 150 gear boxes at N160

July 21 Issued 100 gear boxes

July 25 Purchased 100 gear boxes at N135

July 30 Issued 50 gear boxes

Show the appropriate stores ledger account disclosing the cost of each

Issue and the value of closing stock at 31st July. Use LIFO method.

(25 marks)

QUESTION 2

During the year, 20,000 units of Z were produced and sold. Costs and revenues were:

                                                                                          N

Sales                                                                                 100,000

Production costs:

Variable                                                                              35,000

Fixed                                                   15,000

Administrative + selling

Overheads fixed                                  25,000

Required

Show the net profit using both absorption and marginal costing approach.

(7.5 marks each =15marks)

QUESTION 3

Discuss three methods of depreciation that are most frequently encountered.

(5marks each = 15marks)

QUESTION4

The systems approach avoids taking a piecemeal approach to problems and directs the activities of the components or sub systems of the total system towards meeting overall objectives. The systems approach recognizes that changes cannot be made to some parts of the system without considering the effect on the system as a whole and thatthe overall system characteristics are greater than the sun of the separate parts. Explain the three different types of systems.

(5marks each for any three points well mentioned and explained = 15marks)

QUESTION5

Cost accounting systems are largely concerned with the analysis of past costs and operations. Cost unit chosen should be the most relevant for the activities of the particular organization. Discuss the various costing methods

(3.5marks each for anyfour points well mentioned and explained = 15marks)

QUESTION 6

Costing technique refers to the method used to determine the value offinished goods. Among these techniques that give different valuation. Briefly explain THREE techniquesuse in the valuation of finished goods. (15marks)