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Cost accounting Assignment Help

Step 1

A) Storage department:

How many types/volume of raw materials have been received/or rejected?

(i) The raw material is the base of finished goods and the quality of finished goods is based on the quality of raw material. Therefore, the raw material is received and rejected as the quality of the product. The record of purchases made and purchase returns made of the manufacturer provided details of types and quantities of raw material have been received and rejected.

How to ensure the quality of the raw materials meet the standard upon receipt?

(ii) The quality of raw materials should be following the standards maintained by the purchasing department or with the standards prescribed by the quality control department. So we have to check with the standards about the qualities of the raw materials. Apart from these storage conditions should also complied to ensure that whether the quality of raw material is maintained or not. Quality should be checked at the time of receiving material as well when it is issued to the production department.

How many/types of raw materials are issued out to production?

(iii)The raw material register is maintained by the storage manager which contains the details of raw material received and issued for productions. With the help of these records, we can know the types and quantities of raw material issued for the production of finished goods. How the waste is kept and disposed (iv) A team is set up by the manufacturer to check the raw material and handle the waste material. The team design and update a system by which raw material is checked and a process is followed for disposing of waste material. We can also ask questions from the waste management team in respect of management and disposal as per the policy.

B) Production Department:

How many types of work-in-progress have been completed?

(i) To control the production process and monitoring of productivity, production managers keep records of opening WIP, WIP converts in finished goods, and closing WIP. With the help of these records, we can get information about work-in-progress have been completed.

How many machines/equipment break down?

(ii) To control the expenses of repair and maintenance along with monitoring the production capacity of machines and equipment, a record is maintained by the production manager. The record contains details of working hours of production, break-down happens during the production process. The records provide details of machines and equipment break-down during the production process.

How many types of raw materials sent from Storage department are defective?

(iii) The raw material received from the storage department is checked and recorded by the production manager that contains details of raw material received and used in production. A team is set up by the production manager to check the quality and defects of raw material. The team prepares a record of defective raw material received from the storage department. With the help of these records and by asking questions from the team we can know the types of raw material found defective.

How many types of work-in-progress become defective when the whole assembly line break down?

(iv) To check the productivity of machines, the production manager makes a record of daily production that includes details of daily production including defective work-in-progress due to the break-down of machines. We can ask questions from the production manager and can check the record for getting information related to defective work-in-progress due to break-down.

C) Maintenance:

How many types (quantities) of new parts used up for each round of repair/maintenance?

(i) At the time of purchase of new parts, a unique identification number is provided by the production manager to control and monitoring of assets of the company. The records are also maintained based on these unique identification numbers. With the help of these unique identification numbers and records, we can know the quantities used in the repair & maintenance of machines.

How many types (quantities) of new parts are still available?

(ii) With the help of a unique identification number allotted to each new part and disposal record of parts of machines, we can get information on quantities of new parts still available.

What are the reason(s) that the machine/tools/equipment needed for maintenance/repair?

(iii) Machines& equipment are regularly used for products that cause break-down and decrease the efficiency of machines. To minimize break-down and to increase the efficiency of the machines repair & maintenance is required.

D) Quality Control:

How many/or types of finished goods have gone through the checking process(es)?

(i) For maintaining the quality of finished goods a checking is required that is conducted by a team. For monitoring the checking process, a record is made in respect of finished goods those are checked and those are unchecked. With the help of these records, we can know the types of finished goods that have gone through the checking process.

What are the types of checking methods used to check the finished goods’ quality?

(ii) The finished goods are prepared and checked based on customers' expectations and market demand. The checking methods used by the production manager is also based on it. The methods used in checking are related to the quality of the product, safety, efficiency, and effectiveness of the product.

What types/possible errors of each checking method used?

(iii) There is much possible error in checking methods such as the expectation set by the production manager is different from the customers' demand. There is no proper monitoring for the detection, prevention, and control of defects in finished goods.

How is the quality control process being carried out either on individual unit or batch by batch?

(iv) In case when a high amount of production is processed, individual unit testing is not possible. In the case of condom production, batch by batch testing is more preferable in place of individual unit testing.

E) Warehouse:

How many/or types of finished goods delivered to customers?

(i) An SOP is developed by the warehouse manager that contain the detail of orders received from the customer and finished goods delivered against these orders. By asking the questioners from the warehouse manager and the details of systems, we can know the quantities and types of finished goods delivered to customers.

How many/or types of finished goods received from production department?

(ii) A system of inward supplies and outward supplies of finished goods is maintained by the warehouse manager. The production department provides finished goods to the warehouse department after production. Based on the receipt voucher and register of inward supplies, we can know the quantities and types of finished goods received from the production department.

How many/or types of finished goods packed and not yet delivered?

(iii) For timely completion of orders received from customers, warehouse managers maintained a record of orders received from customers, orders under process such as packing of goods, and the process of delivery. With the help of these records, we can know the quantities and types of finished goods that are packed and not delivered to customers.

What is/are the balance(s) of finished goods still available in the warehouse?

(iv) The warehouse is the place where all finished goods are stored by the businessman. For proper monitoring of the finished goods, a record is maintained in respect of opening finished goods, supplies received from the production department, finished goods delivered to customers, and closing finished goods in the warehouse. With the help of these records, we can know the types of finished goods available in the warehouse.

Step 2:

Direct material cost

Direct material cost is the cost of acquiring raw materials for production in the industry of condom manufacturing rubber and oil is the main direct material cost. It is the basic material required for production thus cost related with this is direct material cost.

Direct labor cost:

Labor cost that is directly related to the production process and associated with manufacturing work is known as direct labor cost. In the production process of condoms, labor is required at each step such as collecting the raw material, compounding of chemical additives with the liquid latex, adding paste to dipping machine, putting the condoms in tumbling machine and testing the final product. A fixed amount is paid to labor associated with the production process. Direct labor cost is the second most important part of the production process and difficult to manage in production.

Direct Expense cost:

Direct expense is the expenses other than direct material cost and other than direct labor cost which are directly related with the production. For example job work related with production of condom is direct expense cost.

Direct factory overhead

Direct factory cost is the cost related with factory directly factory maintenance, cleaning and security expense are direct factory overheads.

Major problems in the production process in the factory:

The production process includes various steps that help convert the raw material into the finished goods. Each step has many problems in the production process these are as follows:

• The raw material has many problems such as shortage or excess storage of raw material, defect in raw material, the issue with a major supplier, high ordering cost and high carrying cost, etc.

• Labor has problems such as labor strikes, working conditions of labor, high demand for labor, the management cost of labor and production capacity of labor, etc.

• The machine production problem such as break down of machines, high repair, and maintenance cost of machines, high investments in machines as per requirements.

• The expectations of customers and the final product differ as in the short time and at low cost, the manufacturer is not able to produce the final product as per the expectations of customers that are reasons for the reduction in demand and decrease in revenue.

Step 3:


The business of any manufacturing company is based on the production process of the company and steps taken at each level of the production process of finished goods. The production process starts from collecting raw material, processing of raw material by labor and machines, maintenance of machines and equipment, storage of work-in-progress and finished goods, quality checking of finished goods as per expectations, packing of finished goods and delivery of finished goods to customers. At every level of the production process, some expenses are incurred by the manufacturer is known as production cost which is part of the cost of goods manufactured. Every level of production has some major issues that are needed to control for the smooth processing of the manufacturing process.

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