NATIONAL OPEN UNIVERSITY OF NIGERIA

UNIVERSITY VILLAGE, PLOT 91, CASDASTRAL ZONE, NNAMDI AZIKIWE EXPRESS WAY, JABI, ABUJA.
FACULTY OF SCIENCES
JANUARY/FEBRUARY 2018 EXAMINATION

COURSE CODE:   ACC 306                                             COURSE UNIT: 3

COURSE TITLE:    Cost Accounting

TIME ALLOWED:  2 ½ Hours     

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

                           2. Question one (1) carries 25 marks, while the other      

                                three (3) questions carry 15 marks each.

QUESTION 1

1. The Department of Budgeting and Forecast in Costal Plc has the following information in respect of materials MGS:

Units

Normal month usage                                                                           44,000

Maximum anticipated monthly usage                                                 57,000

Minimum anticipated monthly usage                                                  9,800

Delivery period from suppliers:

Maximum                                                                                             5 months

Normal 4 months Minimum                                                                2 months

Re-order quantity (EOQ)                                                                 40,000 units

Required:

(a) Calculate:

(i) Re-order level

(ii) Minimum stock level

(iii) Maximum stock level.

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

                                                                                          N

Sales                                                                                 580,000

Production costs:

Variable                                                                           135,000

Fixed                                                                                115,000

Administrative + selling

Overheads fixed                                                               125,000

Required

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

3. Outline four essential elements of effective cost accounting information.

QUESTION 2

Explain the following terms:

1. Straight-line method;
2. Reducing balance method;
3. Production unit method;
4. Revaluation method
5. Process costing

QUESTION3

1. State eight advantages of operating central stores.
2. State seven duties of a store keeper.

QUESTION 4

Explain the following terms:

1. Deterministic or mechanistic system
2. Stochastic or probabilistic systems
3. Adaptive or self-organizing or cybernetic systems

QUESTION 5

Describe the following costing methods:

1. Job costing
2. Batch costing
3. Contract costing

QUESTION 6

Briefly explain the following measures of performance:

1. Controllable profit
2. Divisional profit
3. Net profit
4. Controllable residual profit
5. Net residual profit