Mrs Johnston has taken out a lease on a shop

Mrs Johnston has taken out a lease on a shop for a down payment of £5000. Additionally, the rent under the lease amounts to £5000 per annum. If the lease is cancelled, the initial payment of £5000 is forfeit. Mrs Johnston plans to use the shop for the sale of clothing, and has estimated operations […]

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(a) From the data below, you are required:(i) To prepare

(a) From the data below, you are required:(i) To prepare a schedule to be presented to management showing for the mileages of 5000, 10 000, 15 000 and 30 000 miles per annum:1. Total variable cost;2. Total fixed cost;3. Total cost;4. Variable cost per mile (in pence to nearest penny);5. Fixed cost per mile (in […]

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(a) Explain the term ‘backflush accounting’ and the circumstances in

(a) Explain the term ‘backflush accounting’ and the circumstances in which its use would be appropriate.(b) CSIX Ltd manufactures fuel pumps using a just-in-time manufacturing system which is supported by a backflush accounting system. The backflush accounting system has two trigger points for the creation of journal entries.These trigger points are:The purchase of raw materialsThe […]

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An organization’s stock records show the following transactions for a

An organization’s stock records show the following transactions for a specific item during last month: The stock at the beginning of last month consisted of 100 units valued at £6700.The receipts last month cost £62 per unit.The value of the closing stock for last month has been calculated twice – once using a FIFO valuation […]

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A company reapportions the costs incurred by two service cost

A company reapportions the costs incurred by two service cost centres, materials handling and inspection, to the three production cost centres of machining, finishing and assembly.The following are the overhead costs which have been allocated and apportioned to the five cost centres: …………………………(£000)Machining …………….400Finishing ………………200Assembly ……………..100Materials handling …100Inspection ………………50 Estimates of the benefits received by […]

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Beckley Hill (BH) is a private hospital carrying out two

Beckley Hill (BH) is a private hospital carrying out two types of procedures on patients. Each type of procedure incurs the following direct costs: BH currently calculates the overhead cost per procedure by taking the total overhead cost and simply dividing it by the number of procedures, then rounding the cost to the nearest twp […]

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Shown below is next year’s budget for the forming and

Shown below is next year’s budget for the forming and finishing departments of Tooton Ltd. The departments manufacture three different types of component, which are incorporated into the output of the firm’s finished products. The forming department is mechanized and employs only one grade of labour, the finishing department employs several grades of labour with […]

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A furniture making business manufactures quality furniture to customers’ orders.

A furniture making business manufactures quality furniture to customers’ orders. It has three production departments and two service departments. Budgeted overhead costs for the coming year are as follows: ………………………………………………Total(£)Rent and rates …………………………12,800Machine insurance …………………….6,000Telephone charges …………………….3,200Depreciation ……………………………18,000Production supervisor’s salaries  .24,000Heating and lighting …………………..6,400………………………………………………70,400 The three production departments – A, B and C, and the […]

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In the absence of the accountant you have been asked

In the absence of the accountant you have been asked to prepare a month’s cost accounts for a company which operates a batch costing system fully integrated with the financial accounts. The cost clerk has provided you with the following information, which he thinks is relevant: …………………………………………………………………(£)Balances at beginning of month:Stores ledger control account ……………….24,175Work […]

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CW Ltd makes one product in a single process.The details

CW Ltd makes one product in a single process.The details of the process for period 2 were as follows:There were 800 units of opening work in progress valued as follows:Material …………………………………£98,000Labour …………………………………..£46,000Production overheads ……………..£7,600During the period 1800 units were added to the process and the following costs were incurred:Material ………………………£387,800Labour ………………………..£276,320Production overheads ..£149,280There were 500 […]

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