pathfinder - The Institute of Chartered Accountants of Nigeria

PATHFINDERMaterials on site as at end of the yearMaterials transferred to project 204 855Site wages paid 1,070Sub –contract costs 850Fuel and diesel 400Other expenses 340Insurance paid 180Cost of work certified 4,750Value of work certified 5,200Progress payment 4,680The contract sum is N7.5 million and estimated cost to completion is put at N960,000.Depreciation is calculated at 20% per annum on cost, site wages unpaid as at dateamounted to N250,000 while insurance paid was for a period of 2 years due to thediscount offered. 10% of work certified is retained by the Local Government.Required:Prepare the contract account for project 101 and show whether profit can be taken.Show balance sheet entries.(Total 15 Marks)QUESTION 3Ogbuefi Limited produces three products, all of which use the same machine withavailable 55,000 hours per period. The standard costs of the products per unit are:Bak1 Bak II Bak IIIMaximum demand(units) 3,000 5,000 3,500Direct labour N N N-processing(N 7.50/hr) 30 45 45-finishing(N 4.50/hr) 18 9 18Variable overhead 42 36 32Total variable cost 130 140 140Selling price 200 250 225Price of complimentaryProduct 185 215 200Fixed cost for the period is N650,000INTERMEDIATE EXAMINATION - NOVEMBER 201012