Home 
About
Blog
Brief Answer Questions:
[10 * 1 = 10]Define management accounting.
Explain semi-variable cost.
What is break-even point?
Write the meaning of payback period.
Define contribution margin.
Mention any two objectives of budgeting.
What is relevant cost?
What is contribution margin?
If the Sales unit = 20,000 unit, Production unit = 22,000 unit, Opening stock = 3,000 unit.
Required: Closing stock unit
The following information are given to you:
| Fixed cost | Rs 150,000 |
| Production unit | 15,000 units |
| Variable cost per unit | Rs 5 |
Short Answer Questions:
[6 * 5 = 30]What are the difference between variable costing and absorption costing?
What is cost account? Why it is needed?
The cost structure of a company at different level of working hours has been given below:
| Months | Baishakh | Jestha | Ashadh | Shrawn | Bhadra |
| Machine hours | 200 | 400 | 600 | 800 | 1,000 |
| Supervision cost | 1,500 | 2,300 | 3,100 | 3,900 | 4,700 |
Required:
a. Segregation of semi variable cost into variable and fixed cost using Least Square Method.
b. Total cost for the moth of Ashwin when machine hours are expected to be 1,200.
The following figure of a company for the last two years:
| Particulars | Year I (Rs.) | Year II (Rs.) |
| Sales | 900,000 | 1,200,000 |
| Profit | 60,000 | 120,000 |
Required:
a. Profit volume ratio.
b. Annual fixed cost
c. Break-even sales for the year
d. Margin of safety for the period I and II
e. Required sakes for earning after tax profit Rs 75,000 (tax rate being 25%)
A Manufacturing Company had the following relevant information:
| Materials cost per unit | Rs 12 | Normal Capacity | 5,000 units |
| Labour cost per unit | Rs 8 | Production | 12,000 units |
| Variable manufacturing cost per unit | Rs 5 | Sales | 9,000 units |
| Selling price per unit | Rs 45 | Opening stock of finished goods | 1,000 units |
| Fixed manufacturing cost | Rs 25,000 | Fixed selling and distribution cost | Rs 50,000 |
| Variable selling and distribution expenses | Rs 4 per unit |
Required: Income statement under Absorption Costing
The following are the information of a manufacturing company.
| Output | 5,000 units | 10,000 units |
| Indirect materials | Rs 5,000 | Rs 10,000 |
| Indirect labour cost | 10,000 | 20,000 |
| Supervision | 15,000 | 20,000 |
| Depreciation | 20,000 | 20,000 |
| Maintenance cost | 10,000 | 15,000 |
Required: Budgeted overhead cost for 7,000 and 9,000 units.
Comprehensive Answer Questions:
[2 * 10 = 20]The following are the information of a organization.
| Months | Sales (Rs) | Purchase (Rs) | Wages (Rs) | Expenses (Rs) |
| Chaitra | 200,000 | 50,000 | 22,000 | 15,000 |
| Baishakh | 220,000 | 75,000 | 26,000 | 15,000 |
| Jestha | 180,000 | 55,000 | 28,000 | 16,000 |
| Ashadh | 90,000 | 40,000 | 30,000 | 18,000 |
Additional Information:
➤ 50% of sales are for cash and rest will be collected in next month.
➤ 40% of the purchase are for cash and the remaining will be paid in the next month.
➤ Wages will be paid after one month.
➤ Expenses are paid when they incurred.
➤ A plant of Rs 90,000 is planned to purchase in Baishakh and will be paid equally in three months (i.e. from Baishakh to Ashadh)
➤ Opening cash balance at Baishakh is Rs 60,000.
Required: Cash budget for Baishakh, Jestha and Ashadh.
A Water-Processing factory has finalized feasibility study of water distribution scheme. The scheme needs installation of plant that operated for 10 years. The catalogue price of the plant is Rs 700,000. The commissioning and arrangement of plant layout needs Rs 230,000. An additional amount of Rs 120,000 is needed for the registration of the factory and overall project management. The estimated book and cash salvage value of the plan after 10 years will be Rs 50,000 and Rs 80,000 respectively. The estimated sales price per bottle is Rs 20 and operating cash expenses is Rs 16 per bottle. The targeted annual production and sales is 70,000 bottles. The desired return on investment is 12 % p.a. and tax payable by the factory on overall income is 25%.
Required:
a. Initial capital outlay
b. Estimated annual cash inflows
c. Estimated final year cash inflows
d. Net Present Value
e. Desirability of the project