Practice Paper Basic Costing

BCCG (Level 2) – Practice Answers

Section 1

Task 1.1

· Financial Accounting

· Management Accounting

· Financial Accounting

Task 1.2

· Material

· Overhead

· Labour

· Overhead

Task 1.3

· Direct

· Indirect

· Direct

Task 1.4

· Production Cost

· Selling and Distribution Cost

· Administration Cost

· Production Cost

Task 1.5

· Variable

· Fixed

· Semi-variable

· Variable

Task 1.6

· 300/200

· 400/200

· 100/100

· 100/200

· 200/100

· 200/200

Task 1.7

· B100

· C200

· B200

· A200

· A100

Task 1.8

· True

· False

· True

Task 1.9

· Variable

· Fixed

· Variable

· Fixed

Task 1.10

Units / Fixed Costs / Variable Costs / Total Costs / Unit Cost
2,000 / £12,000 / £6,000 / £18,000 / £9.00
3,000 / £12,000 / £9,000 / £21,000 / £7.00
4,000 / £12,000 / £12,000 / £24,000 / £6.00

Task 1.11

Element / Total Cost / Unit Cost
Materials / £40,000 / £2.00
Labour / £60,000 / £3.00
Overheads / £80,000 / £4.00
Total / £180,000 / £9.00

Task 1.12

Element / Unit Cost
Materials / £5.00
Labour / £4.00
Overheads / £2.00
Total / £11.00

Section 2

Task 2.1

Manufacturing Account Y/e 31 December

£
Opening Stock of Raw Materials / 7,000
Purchases of Raw Materials / 50,000
Closing Stock of Raw Materials / 10,000
Direct materials used / 47,000
Direct Labour / 97,000
Prime cost / 144,000
Manufacturing Overheads / 53,000
Factory cost / 197,000
Opening Stock of Work in Progress / 8,000
Closing Stock of Work in Progress. / 10,000
Factory cost of goods manufactured / 195,000
Opening Stock of Finished Goods / 30,000
Closing Stock of Finished Goods / 25,000
Cost of goods sold / 200,000

Task 2.2

· LIFO

· AVCO

· FIFO

Task 2.3

· False

· True

· False

Task 2.4

Method / Issue Cost / Closing Stock
FIFO / £2,300 / £4,400
LIFO / £2,900 / £3,800
AVCO / £2,580 / £4,120

Task 2.5

· True

· False

Task 2.6

· Piecework

· Time-rate plus bonus

· Time-rate

Task 2.7

· Time-rate

· Piecework

· Time-rate plus bonus

Task 2.8

Worker / Hours Worked / Basic Wage / Overtime / Gross Wage
A Singh / 35 / £350 / £0 / £350
S Callaghan / 40 / £350 / £75 / £425

Task 2.9

Worker / Units Produced in Week / Gross Wage
G Patel / 300 / £240
A Jones / 400 / £320

Task 2.10

Worker / Hours / Units Produced / Basic Wage / Bonus / Gross Wage
A. Smith / 35 / 150 / £420 / £0 / £420
J O’Hara / 35 / 175 / £420 / £0 / £420
M Stizgt / 35 / 210 / £420 / £35 / £455

Task 2.11

· True

Task 2.12

Cost Type / Variance / Adverse/Favourable
Direct Materials / £1,700 / A
Direct Labour / £1,200 / F
Production Overheads / £4,100 / A
Administration Overheads / £2,900 / A
Selling and Distribution Overheads / £1,100 / F

Task 2.13

Variance / Significant / Not significant
Direct Material / Not Significant
Direct Labour / Significant
Production Overheads / Not Significant
Administration Overheads / Significant
Selling and Distribution Overheads / Not Significant

Task 2.14

Variance / Relevant Manager
Direct Labour Cost / HR Manager OR
Production Manager
Administration Overheads / Administration Manager

BCCG (Level 2) – Practice Answers