Cost Accounting Project Report: Job Costing and Variance

This cost accounting project report provides a detailed analysis of various cost accounting techniques. The report includes solutions for job costing problems, demonstrating the calculation of direct materials, direct labor, and overhead costs. It also covers process costing, joint costing, and variance analysis, including material price and usage variances, and labor rate variances. Additionally, the report presents a business report with an executive summary, introduction, and analysis of overhead variance. The project further incorporates budgeting exercises, including the creation of a purchase budget and cost of goods sold calculations, along with formula solutions and managerial suggestions. This comprehensive report is designed to aid in understanding key cost accounting principles and their application in financial management.

Running Head: Cost Accounting
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Project Report: Cost accounting

Cost Accounting
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Job costing:
Normal Solution:
Direct material control
Debit credit
Particulars amount Particulars amount
balance b/d 25898 WIP 820
Purchase 4922 balance c/d 30000
30820 30820
Work in process
Debit credit
Particulars amount Particulars amount
Balance b/d 9700
Direct Material 820 Finished goods 21120
Labour 7400 balance c/d 8800
Factory
overhead 12000
29920 29920
Finished Goods
Debit credit
Particulars amount Particulars amount
Balance b/d 12780 Sales 48000
WIP 21120 balance c/d 18900
gross profit 33000
66900 66900
Accounts Payable
Debit credit
Particulars amount Particulars amount
Cash 8700 Balance b/d 5678
balance c/d 1900
Direct material
(purchase) 4922
10600 10600
Cost of goods sold
Debit credit
Particulars amount Particulars amount
sales 88000 Gross profit 33000

Cost Accounting
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Balance c/d 55000
88000 88000
Formula solution:
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B C D E
Debit credit
Particluars amount Particluars amount
balance b/d =C9-C7 WIP =C15
Purchase =E32 balance c/d 30000
=E9 =SUM(E6:E7)
Debit credit
Particluars amount Particluars amount
Balance b/d 9700
Direct Material =C18-(C16+C17+C14) Finished goods =C24
Labor =3700*2 balance c/d =(1200+7000+600)
Factory overhead 12000
=E18 =SUM(E15:E16)
Debit credit
Particluars amount Particluars amount
Balance b/d 12780 Sales 48000
WIP =C26-(C23+C25) balance c/d 18900
gross profit =88000*(60/160)
=E26 =SUM(E23:E24)
Debit credit
Particluars amount Particluars amount
Cash 8700 Balance b/d 5678
balance c/d 1900 Direct material (purchase) =E34-E31
=SUM(C31:C32) =C34
Debit credit
Particluars amount Particluars amount
sales 88000 Gross prrofit =C25
Balanc c/d =E41-E39
=C39 =C41
Direct material control
Work in process
Finished Goods
Accounts Payable
Cost of goods sold

Cost Accounting
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Cost Accounting
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Management accounting & history:
Roman colesium is one of the ancient places of Roman. It was a theatre and it was
known for its architecture and the various activities which have been played in the place.
History (2018) explains that in former time, the building was one of the highest visited place
in the roman but with the time, people have lose their interest in the place and until 18th
century, people were using the place for building material. In 18th century, two third part of
the place had been destroyed and then the related parties made few changes into the place to
make it attractive again and made it in such a manner that people could use it.
It explains that the changes are the part of everything in the world. Every place, thing,
item, tool, techniques, machineries etc must be changed with time. If it doesn’t happen than

Cost Accounting
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the thing loses its importance. Same has happened with the cost accounting, in last few
decades, the managers have lost their interest in the cost accounting techniques due to its non
practice tools and techniques. But few innovation and the modern technologies have helped
the manager to develop the trust again and manage the better performance of the company on
the basis of modern cost accounting.
.
Figure 1
Process costing:
Normal Solution:
Casablanca Limited
Production Report
Process 1 Physical Equivalent Units Total
Flows Material Labour
Units to account for:
From beginning WIP 5600
Units started during the year 45600
Total units to account for 51200

Cost Accounting
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Units accounted for:
Completed and transferred out 32800 32800 32800
Ending WIP 18400 5520 1656
Total units accounted for 51200 0 0
Total equivalent Units 38320 34456
Summary of cost to be accounted for
Cost of beginning WIP 45600
Cost incurred during the period 118700 187700
Total cost to be accented for 45520 118700 187700
Calculation of cost per equivalent
unit
Total cost to be accounted for 45520 118700 187700
Total equivalent units 45680 49544
2.60 3.79
Assign cost to unit transferred out and
units in ending WIP
Cost assigned to unit transfer out 85231.17 124264.5 209496
cost assigned to ending WIP inventory 25569 37279 62849
Total cost accounted for 272344
Formula solution:

Cost Accounting
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C D E F G H
Process 1 Physical Total
Flows Material Labour
Units to account for:
From begining WIP 5600
Units started during the year 45600
Total units to account for =E11+E12
Units accounted for:
Completed and transferred out 32800 =E16 =F16
Ending WIP =E13-E16 =E17*0.3 =F17*0.3
Total units accounted for =E13 =F13 =G13
Total equivalent Units =F16+F17 =G16+G17
Summary of cost to be accounted for
Cost of begining WIP 45600
Cost incurred during the period 118700 187700
Total cost to be accunted for =E12+F17-E11 =F24 =G24
Calculation of cost per equivalent unit
Total cost to be accounted for =E25 =F25 =G25
Total quivalent units =E18-F17 =E18-G17
=F29/F30 =G29/G30
Assign cost to unit transferred out and units in ending WIP
Cost assigned to unit transfer out =F31*F16 =G31*G16 =F35+G35
ost assined to ening WIP inventory =(32800*30%)*F31 =(32800*30%)*G31 =F36+G36
Total cost accounted for =H35+H36
Casablanca Limited
Production Report
Equivalent Units

Cost Accounting
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C D E F G H
Process 1 Physical Total
Flows Material Labour
Units to account for:
From begining WIP 5600
Units started during the year 45600
Total units to account for =E11+E12
Units accounted for:
Completed and transferred out 45600 =E16 =F16
Ending WIP
Total units accounted for =E13
Total equivalent Units =F16+F17 =G16+G17
Summary og cost to be accounted for
Cost of begining WIP 45600
Cost incurred during the period 118700 187700
Total cost to be accunted for =E23 =F24 =G24
Calculation of cost per equivalent unit
Total cost to be accounted for =E25 =F25 =G25
Total quivalent units 45600 45600
=F29/F30 =G29/G30
Assign cost to unit transferred out and units in ending WIP
Cost assigned to unit transfer out =F31*F16 =G31*G16 =F35+G35
ost assined to ening WIP inventory =(32800*30%)*F31 =(32800*30%)*G31 =F36+G36
Total cost accounted for =H35+H36
Opening balance 5600 Closing balance =D42+D43
transfer =32800*70%
=D42+D43 =F42
Casablanca Limited
Production Report
Equivalent Units
Work in process a/c

Cost Accounting
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Cost Accounting
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Joint costing:
Normal Solution:
A)
Product A Product B
Material 60000 40000
Cost
$
1,87,500
$
1,62,500
Further
Processing
$
45,000
$
25,000
Total cost
$
2,32,500
$
1,87,500
Total units 60000 40000
Cost per unit
$
3.88
$
4.69
Selling price per
unit
$
4.50
$
5.44
Gross margin rate 16.13% 16.13%
B)

Cost Accounting
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The case explains that the company has received an offer which says that if the
company wants to sell the product A without any further processing than $ 2 per product
would be paid to the company. However, through the analysis, it has been measured that the
cost per unit of the company before any further processing is $ 3.13, so if the company would
sell the product A to the dealing company without any further cost than the company would
have to face -36% losses.
It suggests that the offer must not be accepted by the company.
Product A Product B
Material 60000 40000
Cost
$
1,87,500
$
1,62,500
Total cost
$
1,87,500
$
1,62,500
Total units 60000 40000
Cost per unit
$
3.13
$
4.06
Selling price per
unit
$
2.00
$
4.72
Gross margin rate -36.00% 16.13%
$ -
67,500.00
Formula solution:
A)
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B C D
Product A Product B
Material 60000 40000
Cost 187500 =350000-C5
Further Processing 45000 25000
Total cost =C5+C6 =D5+D6
Total units =C4 =D4
Cost per unit =C7/C8 =D7/D8
Sellinf price per unit 4.5 =D9*116.13%
Gross margin rate =(C10-C9)/C9 =(D10-D9)/D9
b)