ACC2350: Costing Methods, Process Costing, Economic Order Quantity

Running head: ACC2350
Acc2350
Name of the Student:
Name of the University:
Authors Note:

1ACC2350
Contents
Answer to Q1:..................................................................................................................................2
Answer to Q2:..................................................................................................................................2
Answer to Q3:..................................................................................................................................8
Answer to Q4:..................................................................................................................................8
Answer to Q5:................................................................................................................................11
References:....................................................................................................................................14

2ACC2350
Answer to Q1:
Part 1:
(i):
Taking into consideration the different types of costs incurred to manufacture motor cell it seems
that using direct tracing would be most effective method to assign cost of each activity to the
motor manufacturing cell. Tracing costs directly would result in appropriate costing of cells
manufactured.
(ii):
In case selection of driver tracing generally the quantity of raw materials used or number of
direct labour hours needed can be used as potential driver to trace costs. Generally, the
assumptions such as the costs are related to direct materials used or number of labours used is the
main foundation behind tracing manufacturing overheads to products (Ganesan, 2015).
Part 2:
Direct tracing is the method where costs are directly traced to different costs objects whereas in
driver tracing the cost drivers are traced to assign cost to products manufactured. In direct
tracing, cost of products are ascertained more accurately compared to cost of products
determined using driver tracing method.
Answer to Q2:
Part 1:
Particulars Amount Amount

3ACC2350
($) ($)
Closing raw materials in hand (30 November) 20,000.
00
Add: raw materials used in production during November 39,000.
00
59,000.
00
Less: Opening raw materials in hand (01 November) 17,000.
00
Raw materials purchased during the month of November 42,000.
00
Amount of raw materials purchased during the month of November as can be seen in the table
above is $42,000.
Part 2:
Particulars Amoun
t ($)
Amount
($)
Beginning work in process 9,000.
00