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Brief Answer Questions Attempt ALL questions.
[10×2=20]State any two importance of cost accounting.
What is replacement cost?
Explain about "Just in Time" inventory policy.
What is budget?
Define the meaning of by-product.
The following information is available in respect of a material.
• Maximum stock level = 12,000 units
• Maximum consumption = 1,000 units
• Average consumption = 800 units
• Delivery period = 8 days - 10 days
• Re-order level = 7,200
Required: Reorder quantity
The following data are given to you:
Standard output = 1,000 units
Actual output = 1,200 units
Cost per unit = Rs.20
Required: Total wages under Gant Task Bonus Scheme
The following information are provided to you:
| Production Department A | Production Department B | |
| Factory Rent (Rs) | 1,000 | 3,000 |
| Depreciation (Rs) | 6,000 | 9,000 |
| Machine hours | 1,000 | 2,000 |
Required: Machine hour rate of the production departments
The following particulars are extracted from the records of a company:
• Beginning and ending number of employees were 350 and 450 respectively.
• Number of employees quit and discharged was 30 and 20 respectively.
• Employees replaced during the period were 30.
Required: Labour Turnover Rate under Separation Method
The following information are provided to you:
Expected price of product = Rs.1,000
Expected discount = 10% on price
Expected production cost of product = Rs.400
Expected designing cost of product = Rs.50
Required: Value of product
Short Answer Questions (Attempt any Five)
[5×10=50]a. Differentiate between flexible budget and static budget.
b. The sales forecasts for coming four months of a company are:
| Months | Chaitra | Baishak | Jestha | Ashad | Shawan |
| Outputs (Units) | 10,000 | 9,000 | 8,000 | 10,000 | 11,000 |
Each unit of finished product needs 3 kg of material @ Rs.5 per kg. The company's has a policy of keeping ending inventory of finished goods in each month that will be equal to half month's sales and raw material is 50 percent of raw material required to same month's production need.
Required: Production Budget and Material Purchase Budget for the three months from Baisakh to Ashad
a. Write down the limitations of cost volume profit analysis.
b. A company produces two products A and B. Both products are produced on the same equipment and use similar processes. The information for output and the cost of activities are given below:
| Product X | Product Y | |
| Output in units | 2,000 | 4,000 |
| Machine hour per unit | 4 | 3 |
| No. of Purchase Orders | 20 | 30 |
| No. of Set-ups | 80 | 120 |
The indirect cost of the different activities is Rs.500,000 which is apportioned as follows:
Volume Related 40%
Purchase Related 40%
Set-up Related 20%
Required: Cost Per Unit under Activity Based Costing method
The following information are given:
Standard:
| Material | Quantity | Standard Price per kg |
| A | 8 | Rs.5 |
| B | 2 | Rs.6 |
| C | 10 | Rs.7 |
Actual:
| Material | Quantity | Actual Price per kg |
| A | 120 | Rs.4 |
| B | 80 | Rs.5 |
| C | 200 | Rs.8 |
Standard Loss is 10% and Actual output is 390 kg
Required: Material Variances
The sales revenue and profit of a manufacturing company for two years were as follows:
| Year | Sales Revenue (Rs) | Profit (Rs) |
| 2077 | 200,000 | 8,000 |
| 2078 | 300,000 | 28,000 |
Required: i) Profit volume ratio
ii) Fixed cost
iii) Brake-even point in Rs.
iv) Break-even point in units if selling price per unit is Rs.10
iv) Sales to earn desired profit after tax of Rs.20,000 if tax rate is 25%
v) Profit when sales are Rs.500,000
vi) Margin of safety if profit is Rs.25,000
What do you mean by cost reduction? Also explain the tools and techniques of cost reduction.
What is variable costing? Differentiate it from absorption costing with examples.
Long Answer Questions (Attempt any Two)
[2×15=30]The following information up to 9 months i.e. 30th Magh of a renowned company who undertook a contract for erecting a sewerage treatment plant for Lalitpur Metropolitan for a total value of Rs 2,000,000 are provided:
• Material = Rs.300,000
• Wages = Rs.400,000
• Overhead = Rs.100,000
• Plant = Rs.200,000
• Work certified was for Rs.1,200,000 and 75% of the same was received in cash
• Value of work uncertified was Rs.45,000
• Material at site as on 30th Magh = Rs.30,000
• Depreciation on plant is 15% per year
• Ignore depreciation of plant for the use on uncertified portion of the work
Required:
a. Contract Account
b. Contractee's Account
c. Work in Progress Account
d. Balance Sheet
Product AB passes through two processes A and B before it is transferred to finished stock. The following information is obtained for the month of January:
| Process A (Rs.) | Process B (Rs.) | Finished Stock (Rs.) | |
| Opening Stock | 12,000 | 15,000 | 20,000 |
| Direct Material | 30,000 | 40,000 | - |
| Direct Wages | 25,000 | 30,000 | - |
| Factory Overhead | 20,000 | 30,000 | - |
| Closing Stock | 7,000 | 15,000 | 20,000 |
| Inter-process profit included in Opening Stock | - | 3,125 | 9,750 |
The output of process A is transferred to process B at 25% profit on the cost price.
The output of process B is transferred to finished stock at 25% profit on cost price.
The stocks in process are valued at prime cost. The finished stock is valued at the price at which it is received from process B. Sales during the period are Rs.300,000
Required:
a. Process Account
b. Finished Stock Account
c. Actual realized profit
d. Stock valuation for Balance Sheet purpose (5+5+3+1+1)
"Management accounting is the practice of identifying, measuring, analyzing, interpreting, and communicating financial information for achieving an organization's goals". Discuss.