Answer the following :- Which of the following is a part of office cost ? 1. A. Salary B. Factory Rent C. Direct expenses D. Selling expenses If variable cost increases then P/Vratio at same level of sales? 2. A. Increases B. Decreases C. No change D None of the above Which of the following is part of operating costing? 3. A. Steel industry B. Cement industry C. Transportation D. None of the above If actual loss is greater than normal loss then it is called 4. A. Normal loss B. Abnormal gain C. None of the above? D. Abnormal loss Budget at different level of output is known as 5. A. Fixed budget B. Standard Budget C. Flexible Budget D. None of the above In make or buy decision which of the following cost is ignored? 6. A. Variable cost B. None of the above C. Both fixed & Variable D. Fixed Cost
[6 marks]Explain the following: 1) Job Costing 2) Direct Cost 3) Period Cost 4) Standard Cost
[4 marks]The sales of a company are @ Rs. 200 per unit = Rs. 20,00,000 Variable cost 12,00,000 Fixed cost 6,00,000 The capacity of the factory 15,000 units Determine the BEP. How much profit is the company making?
[4 marks]Difference between cost and financial accounting
[7 marks]Shanker has been promised a contract to run a tourist car on a 20 km. long mute for the chief executive of a multinational firm. He buys a car costing Rs.1,50,000. The annual cost of insurance and taxes are Rs. 4,500 and Rs.900 respectively. He has to pay Rs.500 per month for a garage where he keeps the car when it is not in use. The annual repair costs are estimated at Rs.4,000. The car is estimated to have a life of 10 years, at the end of which the scrap value is likely to be Rs.50,000. He hires a driver who is to be paid Rs.300 per month plus 10% of the takings as commission. Other incidental expenses are estimated at Rs.200 per month. Petrol and oil will cost Rs.100 per 100 kms. The car will make 4 round trips each day. Assuming a profit of 15% on takings is desired and that the car will be on the road for 25 days on an average per month what should he charge per round-trip?
[7 marks]The following information has been obtained form the records of ABC Co. Ltd. for the month of January, 2014: Cost of raw materials on 1/01/2014 30,000 Purchase of raw materials during the month 4,50,000 Wages paid 2,30,000 Factory overheads 92,000 Cost of work-in-progress on 1/01/2014 12,000 Cost of raw materials on 30 /01/2014 25,000 Cost of work-in-progress on 30 /01/2014 15,000 Cost of stock of finished goods on 1 /01/2014 60,000 Cost of stock of finished goods on 30 /01/2014 55,000 Administration overheads 30,000 Selling and distribution overheads 20,000 Sales 9,00,000 Prepare: (i) Cost sheet showing the cost of production of goods manufactured, and (ii) Statement showing the cost of sales and the profit earned.
[7 marks]Explain the characteristics of process costing
[7 marks]In a manufacturing process, the following standards apply: Standard Price: Raw material A Rs.1 per kg. Raw materials B Rs. 5 per kg. Standard Mix 75% A; 25% B (by weight) Standard Yield : 90% In a period the actual costs, usage and output were as follows: Used: 4,400 kgs. of Acosting Rs. 4,650 1,600 kgs. of Bcosting Rs. 7,850 Output: 5,670 kgs. of products
[7 marks]Explain any one method used in costing of “Joint product”.
[7 marks]Calculate the machine hour rate from the following: ` Cost of machine 18,000 Cost of installation 2,000 , Scrap value after years 2,000, Rates and rent for a quarter for the shop 600, General2 lighting 200 p.m. Shop supervisor’s salary 6,000 per quarter Insurance premium for a machine 120 p.a. Estimated repair 200 p.a. Power 2 units per hour @ Rs.150 per 100 units Estimated working hours p.a. 2,000. The machine occupies 1/4th of the total area of the shop. The supervisor is expected to devote 1/6th of his time for supervising the machine. General lighting expenses are to be apportioned on the basis of floor area
[10 marks]What is CVP Analysis? How does it help management ?
[7 marks]The cost accountant of ABC Manufacturing attended a workshop on activity-based costing and was impressed by the results. After consulting with the production personnel, he prepared the following information on cost drivers and the estimated volume for each driver. A B C Units produced 25,000 15,000 5,000 Direct materials Cost 40 30 55 Per Unit in Rs. Direct labour Rs. 15 15 Cost driver Cost driver volume A B C Number of setups 125 75 50 250 Machine Hours 2500 1500 2000 6000 Direct labour hours 25000 15000 5000 45000 Number of 50 25 25 100 Inspection The cost accountant also determined how much overhead costs were incurred in each of the four activities as follows: Activity Overhead costs in: Machining: Setup 1,50,000 Machining 7,50,000 Total of Machining Overhead Cost 9,00,000 Assembly : Assembly 360,000 Inspection 90,000 Total of Assembly Overhead Cost 4,50,000 Total Overhead Cost 13,50,000 Required: 1. Determine the cost driver rate for each activity cost pool. 2. Use the activity-based costing method to determine the unit cost for each product.
[7 marks]Explain advantages and limitations of standard costing
[7 marks]Sales are Rs. 1,50,000, producing a profit of Rs.4,000 in period I. Sales are Rs.1,90,000, producing a profit of Rs.12,000 in period II. Determine the BEP.
[7 marks]The product of a company passes through 3 distinct process. The following information is obtained from the accounts for the month ending January 31, 2018. Particulars Process – A Process – B Process – C Direct Material 7800 5940 88863 Direct Wages 6000 9000 12000 Production Overheads 6000 9000 12000 3000 units @ Rs. 3 each were introduced to process – I. There was no stock of materials or work in progress. The output of each process passes directly to the next process and finally to finished stock A/c. The following additional data is obtained: Process Output Normal Loss in % Realisable Value of Scrap Process 1 2,850 5% Process 2 2,520 10% Process 3 2,250 15% Prepare Process Cost Account, Normal Loss Account and Abnormal Gain or Loss Account
[5 marks]Following information is available from the records of Jay Ltd. for the year end 31st March 2018. Fixed Expenses in lakhs are as follows:- Wages and salaries 9.5 , Rent, rates and taxes 6.6, Depreciation 7.4 Sundry administrative expenses 6.5 Semi-Variable Expenses (at 50% of capacity) in lakhs are:- Maintenance and repairs 3.5, Indirect labour 7.9, Sales department salaries 3.8 , Sundry administrative expenses 2.8 Variable Expenses (at 50% of capacity) in lakhs are:- Materials 21.7 , Labour 20.4, Other expenses 7.9 Assuming that the fixed expenses remain constant for all levels of production, semi-variable expenses remain constant between 45% and 65% of capacity increasing by 10% between 65% and 80% and by 20% between 80% and 100%. Sales at various levels are : (lakhs) 50% capacity 100 60% “ 120 75% “ 150 90% “ 180 100% “ 200 Prepare a flexible budget for the year and forecast the profits at 60%, 75%, 90% and 100% of capacity.
[14 marks]