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Brief Answer Question
Attempt All question
Write any two objectives of cost accounting.
Define semi-variable cost with suitable examples.
Write in brief about ABC analysis in stock control system.
Point out the causes of labour turnover.
Write any two differences between allocation and apportionment of overhead.
Following information are given:
- Carrying cost per unit: Rs. 0.5
- Ordering cost per order: Rs. 40
- EOQ: 1,000 units
Required: Annual requirement.
A Company's cost structure of two different level of output is given below:
| Total cost : (Rs) | 40,000 | 60,000 |
| Output (units) | 2,000 | 4,000 |
Required: Total cost for 3,000 units.
A manufacturing company provide you the following information :
Standard time allowed ................... 150 hours
Time Saved by a worker ................. 20 hours
Wage rate per hour ....................Rs. 30
Required: Total earning of a worker under Rowan Premium Plan
Following information are supplied to you :
Consumption per day ................ 30,000 to 50,000 units
Re-order period ......................3 to 5 days
Maximum stock level ..................3,00,000 units
Required: Re-order quantity
Following particulars are provided :
Cost of selection ........................ ... Rs.25,000
Training cost ............................ ...Rs.20,000
Cost of welfare services ...................Rs.22,500
Loss due to inefficiency of new workers ...Rs. 20,000
Average no. of workers .....................100
No. of workers replaced ....................200
Required: Replacement cost per replacement
Descriptive Answer Question
Attempt any Five questions
Following are the particulars of an industry manufacturing two products A and B ::
| Products | Output in units | Machine hours (MH) | Production runs | No. of orders | Prime Cost (Rs.) |
|---|---|---|---|---|---|
| A | 15,000 | 2,000 | 20 | 60 | 110,000 |
| B | 20,000 | 3,000 | 40 | 90 | 90,000 |
The overhead cost and cost drivers are as follows:
| Activities | Cost drivers | Overheads |
|---|---|---|
| Maintenance cost | Machine hours | Rs.250,000 |
| Set up cost | No. of production runs | Rs. 300,000 |
| Procurement cost | No. of order executed | Rs. 300,000 |
Required: Cost per unit under Conventional method using MH and Activity Based Costing
The profit and total cost of a company during two years were as follows:
| Year | 2076 | 2077 |
|---|---|---|
| Total cost | Rs. 400,000 | Rs. 600,000 |
| Profit | Rs. 50,000 | Rs. 100,000 |
Required:
a. Profit volume ratio
b. Total fixed cost
c. Break-even point in Rs.
d. Sales to make a profit of Rs. 75,000 after tax. The corporate tax rate is 25%
e. Margin of safety if the profit of Rs. 125,000 is earned
A company had the following relevant information:
Direct material per unit: Rs. 8
Direct labour per unit: Rs. 4
Variable manufacturing cost per unit: Rs. 5
Variable selling expenses: 5% of sales
Selling price per unit: Rs. 30
Fixed manufacturing OH per unit: Rs. 5
Fixed administrative and selling expenses: Rs. 72,000
Normal capacity: 30,000 units
| Year | 2076 | 2077 |
|---|---|---|
| Production units | 25,000 | 25,000 |
| Sales units | 20,000 | 26,000 |
Required :
a. Income statement under absorption costing system for year 2077
b. Profit from variable costing system
(a) Harati Yatayat Sewa provides the following information to you:
Cost of bus ................................... Rs. 660,000
Scrap value after 10 years ............... Rs. 60,000
Drivers Salary ............................... Rs. 20,000 per month
Helper Salary ................................ Rs. 10,000 per month
Insurance and Taxes ........................ Rs. 360,000 per annum
Other administrative expenses ............ Rs. 240,000per annum
Diesel and other lubricating oil .......... Rs. 20 per km
The bus will run 25 days in a month with 6 round trips of 15Km a day.
Required: Operating cost statement showing standing and running charges
(b) Give the meaning of joint product, main product and by product with examples.
(a) A trading company has presented the following information:
| Months | January | February | March | April |
|---|---|---|---|---|
| Sales in Rs. | 800,000 | 700,000 | 600,000 | 6,000,000 |
The gross profit margin on sales will be 40%. The merchandize inventory will be equal to meet next months sales need. The operating expenses and selling expenses will be 10% and 20% of sales revenue respectively including depreciation 10,000 per month.
Required :
• Merchandize purchase budget for 1st three months ending March
• Operating and selling expenses budget for 1st three months ending March
(b) What is standard costing? Explain any two difference between standard cost and estimated cost.
Define management accounting. Explain the reasons for gaining popularity by management accounting in modern business world.
Analytical Answer Question
Attempt any Two questions
The following details are taken from a factory
| Particulars | Process | Finished stock | |
|---|---|---|---|
| I | II | ||
| Opening stock ................ (Rs) | 20,000 | 25,000 | 40,000 |
| Direct material ............... (Rs) | 90,000 | 60,000 | - |
| Direct wages ............... ...(Rs) | 50,000 | 40,000 | - |
| Factory overheads ............ (Rs) | 30,000 | 20,000 | - |
| Closing stock valued at prime cost .........................(Rs) | 50,000 | 60,000 | - |
| Inter process profit on opening stock ...................(Rs) | — | 5,000 | 10,000 |
The output of process I is transferred to process II at a profit of 25% on cost price and that of process II to finished stock at a profit of 20% on transfer price. The factory sold 80% of the finished goods for Rs. 350,000.
Required :
• Process I and II account
• Finished stock account
• Actual realized profit
A company adopts standard cost practices for it's direct labour cost and factory overhead cost. The activities level and cost per direct labour hour are summarized below:
| Activities level in DLH | 20,000 | 40,000 |
|---|---|---|
| Direct labour cost (Rs) | (Rs) | (Rs) |
| 2 Skilled labour @ Rs.2.0 per hour | 80,000 | 160,000 |
| 3 Semi-skilled labour @ Rs.1.0 per hour | 60,000 | 120,000 |
| 4 Unskilled labour @ Rs. 0.5 per hour | 40,000 | 80,000 |
| Total labour cost | 180,000 | 360,000 |
| Factory overheads : | (Rs.) | (Rs.) |
| Indirect materials | 60,000 | 80,000 |
| Supervision cost | 40,000 | 60,000 |
| Repairs and maintenance | 60,000 | 100,000 |
| Rent and taxes | 20,000 | 20,000 |
| Depreciation | 40,000 | 40,000 |
Normal capacity: 35,000 DLH
Hours worked and paid: 32,000 DLH
Hours produced: 28,000 DLH
Actual overhead incurred: Rs. 300,000
Actual Wages paid :
1 Skilled labour @Rs. 2 per hour .............. Rs. 128,000
2 Semi-skilled labour @ Rs. 1.5 per hour ...... Rs. 96,000
5 Unskilled labour @ Rs. 0.90 per hour ....... Rs. 144,000
Rs. 368,000
Required :
• Direct labour cost and factory overhead budget for 30,000 DLH
• Analysis of variance showing direct labour efficiency, rate and cost
• Three overhead variances
(a) What is job order costing? Mention its features.
(b) Define Cost Reduction. How does it differ from cost control?