Cost Accounting – Spring 2026 – Midterm

Question 1. 1. Explain the objectives of material control. 2. Contrast between cost attachment and cost flow concept. 3. Demonstrate prevention and replacement cost with example. [Marks:3*2=6] [CLO 1 Level 2] [CLO 1 Level 2] [CLO 1 Level 2] Question 2: [CLO 4 Level 5] [Marks 5] In a factory workers are paid on a differential piece rate system where 90% piece rate below standard and 130% piece rate at or above standard. From the following particulars determine the earnings of the worker A,B,C. Standard production 10 units per hour Time rate Tk 1 per hour Production in a day of 9 hours A 80 units B 90 units C 110 units. Question 3: [CLO 2 Level 3] [Marks 4] Develop a stores ledger under the LIFO method of pricing the issues of stores using the following information: 2025 Units Jan 1 Balance in hand @ Tk. 1.20 per unit 100 2 Received @ Tk. 1.30 per unit 200 10 Issued 150 23 Returned from the issues on 10th January 30 30 Wastage 10 < 31 Lost found 10 Question 4. [CLO 4 Level 5] [Marks 5] Annual Usage 2400 units. Cost of placing an order Tk 100. Carrying cost as a percent of inventory 10%. Cost per unit of material Tk 10. Rent, Insurance, Taxes etc per unit per annum Tk 2. Required: Estimate the Economic Order Quantity using formula and in tabular form. Question 5. [CLO 2 Level 3] [Marks 5] A factory has two service departments (P and Q) and three production departments (A, B and C). In March, the departmental expenses were as follows: Department Expenses (Tk.) A 6,50,000 B 6,00,000 C 5,00,000 P 1,20,000 Q 1,00,000 The service department expenses are allocated on a percentage basis as follows: Service Production Service Dept. A B C P Q P 30% 40% 15% — 15% Q 40% 30% 25% 5% — Required: Construct a statement showing the distribution of the two service department expenses to the three production departments (A, B and C) using the Algebraic Method.