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Brief Answer Questions:
[6 × 1 = 6]Define management accounting.
Write the meaning of product cost.
Define the meaning of cost sheet.
The following cost and output details are provided to you:
| Cost (Rs) | 60,000 | 90,000 |
| Output units | 4,000 | 7,000 |
Required: Total cost for 5,000 units.
The sales revenue and earned profit of a special industry during two years were as follows:
| Year | Sales Revenue (in Rs) | Profit (in Rs) |
| 2018 | 10,00,000 | 2,00,000 |
| 2019 | 12,00,000 | 3,00,000 |
Required: Profit volume ratio.
The cash flows during the expected life of the machine are given below:
| Years | 0 | 1 | 2 | 3 | 4 |
| Cash flows (Rs) | (30,000) | 11,000 | 12,000 | 10,000 | 10,000 |
Required: Payback period.
Descriptive Answer Questions:
[6 × 3 = 18]What are the differences between financial accounting and cost accounting.
Explain Job Order Costing with example.
The net loss as shown by the financial account of a company is Rs 30,000. On the reconciliation following facts were disclosed:
➤ Income tax paid Rs 40,000 shown in financial account only.
➤ Administrative expenses over charged in financial account Rs 20,000
➤ Interest on investment credited in financial account Rs 5,000
➤ Depreciation charged in financial account Rs 10,000 and in cost account Rs 8,000.
Required: Cost Reconciliation Statement
Manufacturing company has the following relevant information:
Direct material Rs 10
Direct labour Rs 8
Variable manufacturing cost per unit Rs 5
Selling price per unit Rs 30
Fixed manufacturing overhead per unit Rs 5
Fixed selling expenses Rs 72,000
Variable selling expenses Rs 6% of sales
Normal capacity 30,000 units
Production 28,000 units
Sales 30,000 units
Required: Income statement under variable costing.
The following information of production at 80% capacity i.e. 8,000 units is provided:
| Items of cost | Cost (in Rs) |
| Direct materials | 120,000 |
| Direct labour | 80,000 |
| Factory overhead (40% fixed) | 80,000 |
| Selling and administrative overhead(60% fixed) | 60,000 |
Required: Flexible budget for the production level at 60% and 90% capacity.
A Manufacturing Company has furnished following information:
Direct materials Rs 70,000 Direct labour Rs 120,000
Direct expenses Rs 30,000 Factory rent Rs 30,000
Salaries Rs 10,000 Sales commission Rs 5,000
Office rent Rs 20,000 Advertising expenses Rs 20,000
Net profit 20% of cost
During the year, the company produced 10,000 units of finished product.
Required: Cost sheet showing total cost and profit or loss.
Problem Solving Questions:
[4 × 6 = 24]"The break-even analysis is a useful device of profit planning". Discuss.
"Management reporting provides adequate business information to various levels of management in the form of reports and statements at regular intervals". Comment.
The following information of sales, purchase and expenses are given below:
Sales of different months are:
| Ashadh | Rs 150,000 | Bhadra | Rs 200,000 |
| Shrawn | Rs 100,000 | Aswin | Rs 250,000 |
50% of sales are for cash and rest on credit which will be collected next months of sales.
All purchase and expenses are paid on same months which are as follows:
| Month | Shrawn | Bhadra | Aswin |
| Expenses | Rs 30,000 | Rs 30,000 | Rs 30,000 |
| Purchases | Rs 40,000 | Rs 80,000 | Rs 100,000 |
The company would like to purchase a computer at a cost of Rs 80,000 in the month of Shrawn. The company would like to maintain a uniform cash balance of Rs 20,000 which the company has maintaining in the past. If there is any deficit company can borrow from the commercial bank. The company can borrow and repayment of loan on a multiple of Rs 10,000 with 12% interest rate, which will be paid at the time of loan repaid.
Required: Cash budget for three months Shrawan, Bhadra and Ashwin.
The information of Process B are given below:
➤ 7,000 units (@ Rs 12 per unit) of output were transferred from Process A to Process B.
➤ Normal loss in the Process B is estimated 10% (Scrap value per unit Rs 8 each.)
➤ Expenses incurred in Process B:
Direct material cost (2,500 units) Rs 30,600
Direct labour cost Rs 102,000
Factory overheads @ Rs 5 per unit of material consumed
➤ 8,700 units transferred to process C.
Required:
a. Process B account.
b. Normal loss account.
c. Abnormal gain account.
Comprehensive Answer Question:
[1 × 12 = 12]The Himalayan Fertilizer Corporation manufactures fertilizer after completing three processes. The following information is related to the three processes.
| Particulars | Process P1 | Process P2 | Process P3 |
| Raw materials introduced | 5,000 | - | - |
| Cost of material per units (Rs) | Rs 25.5 | - | - |
| Direct wages | Rs 78,800 | Rs 69,640 | Rs 30,000 |
| Factory overheads | Rs 30,000 | Rs 25,000 | Rs 10,550 |
| Weight loss | 5% | 10% | 20% |
| Normal loss | 40 units | 36 units | 20 units |
| Scrap value of normal loss | Rs 20 | Rs 15 | Rs 100 |
| Actual output | 4,710 units | 2,770 units | 1,120 units |
| Selling price per units of output | Rs 40 | Rs 150 | Rs 200 |
| Output transferred to next process | 2/3 | ½ | - |
| Output sold at the end of each process | 1/3 | ½ | 100% |
Required: Process account by showing profit of each process.