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Brief Answer Questions:
[10 * 1 = 10]Give the meaning of cost accounting.
What is financial accounting?
Define semi-variable cost.
Lalitpur company provides data for two different level of output and costs:
| Production units | Mixed costs (Rs) |
| 350 | 800 |
| 410 | 1,400 |
Required: Variable cost per unit (VCPU)
What is variable cost?
What is make or buy decision?
Following information is given to you:
Variable cost per unit is Rs 85
Selling Price per unit Rs 102
Required: Contribution margin per Unit
What is relevant cost?
Define breakeven point.
Briefly define menu costing.
Short Answer Questions:
[6 * 5 = 30]Distinguish between controllable and uncontrollable cost.
What are the different between cost and management accounting?
The cost of Indirect materials of a division for different levels of activities are given below:
| Production in Units | Cost (Rs) |
| 110 | 225 |
| 100 | 210 |
| 140 | 290 |
| 130 | 255 |
| 120 | 235 |
Required: Segregates fixed and variable costs by using Least Square Method.
The following data of a company are given to you.
| Fixed Cost | Rs 90,000 |
| Selling price per unit | Rs 22 |
| Variable cost per unit | Rs 17 |
Required:
i. P/V Ratio
ii. BEP Sales in Units and Rupees.
iii. Sales volume in Rs to earn after tax profit Rs 300,000 at a current tax rate of 25%
The budget for manufacturing overhead of a concern for two levels of activity were as:
| Capacity | 50 % | 100 % |
| Level of activity | 1,000 units | 2,000 units |
| Indirect wages | Rs 2,000 | Rs 4,000 |
| Consumable store | Rs 1,500 | Rs 3,000 |
| Maintenance cost | Rs 1,900 | Rs2,700 |
| Power and fuel | Rs 1,800 | Rs 2,200 |
| Depreciation | Rs 8,000 | Rs 8,000 |
| Insurance | Rs 5,000 | Rs 5,000 |
Required: Flexible Budget for 60 % and 80 % level of activity in units.
Golden co. has provided following cost and revenue information.
| Sales | 11,000 units |
| Production: | 7,000 units |
| Direct Material cost: | Rs 8 per unit |
| Direct labor cost: | Rs 4 per unit |
| Fixed Administrative cost: | Rs 30,000 |
| Fixed Selling cost: | Rs 10,000 |
| Fixed Manufacturing cost | Rs 30,000 |
| Variable selling cost | Rs 2 per unit |
| Opening Stock: | 5,000 units |
| Sales Price per unit: | Rs 40 |
| Normal output: | 10,000 units |
Required: Income statement under absorption costing for external reporting purpose.
Comprehensive Answer Questions:
[2 * 10 = 20]Prepare a cash budget of a business firm for Jan, Feb, and March from the information given below:
| Months | Sales (Rs) | Purchase (Rs) | Wages (Rs) | Expenses (Rs) |
| December | 120,000 | 50,000 | 20,000 | 13,000 |
| January | 110,000 | 60,000 | 25,000 | 14,000 |
| February | 10,000 | 70,000 | 22,000 | 11,000 |
| March | 110,000 | 40,000 | 20,000 | 9,000 |
Additional information:
➤ 60 % of the sales are for cash and remaining is collected in next month.
➤ 50 % of the purchases are for cash and balance is paid in next month.
➤ Wages are paid in same month.
➤ Bank loan installment of Rs 12000 need to be paid on February.
➤ Opening cash balance Rs 15,000
Super shine company ltd. Is thinking about an investment on the following:
| Cost of electric machine | Rs 1,400,000 |
| Installation cost | Rs 50,000 |
| Life of a machine | 5 years |
| Book salvage value | Rs 80,000 |
| Cash salvage value | Rs 50,000 |
| Operating expenses per year is estimated | Rs 2,50,000 |
| Machine produces | 11,000 units per year |
| Selling price per unit | Rs 85 |
| Corporate tax rate | 25 % |
| Cost of capital | 10 % |
Required:
a. Net cash outlay
b. Annual depreciation amount
c. Annual Cash flow after tax
d. Final year's cash flow after tax
e. Net present value and desirability of machine