Cost and Management Accounting (CMA) — Summer 2018

Explain the advantages of and objections against Cost Accounting.

Explain in detail the classification of costs according to Variability and Controllability.

Mr. Manish furnishes the following data relating to the manufacture of X- standard products during the month of April: Raw Materials Consumed Rs. 15,000 Direct Labour Charges Rs. 9,000 Machine Hours Worked 900 hours Machine Hour Rate Rs. Administrative Overheads 20% on works cost Selling Overheads 50 paise per unit Units Produced 17,100 units Units Sold 16,000 @ Rs. 4 per unit You are required to prepare a cost sheet from the above, showing

Cost per unit (ii) Profit per unit sold

What do you understand by Job Order Costing? Under what conditions, it is suitable?

What do you mean by Activity Based Costing? Explain different stages involved in ABC system of costing?

Define by products and joint products, what are the distinctions between them? Give examples.

The cost records show the following expenses of manufacturing 200 units of Product Xin a process: Material Rs. 4000/- Labour Rs. 1500/- Overhead Rs. 500/- The standard normal wastage in production is 10% and it can be sold in the market at Rs.15 per unit. The actual production is 150 units which is attributable to gross carelessness of the workers. Prepare Process A/c and Abnormal Wastage A/c.

What do you mean by Operating Costing? Explain characteristics, features and types of cost units used in operating costing.1

Kamlesh Company Ltd. is divided into four department A, B, & Cproduction department and Dis service department. The actual costs for October, 2009 are as follows: Rent Rs. 1000 Repairs to plants Rs. 600 Depreciation of plant Rs. 450 Light Rs. 100 Supervision Rs. 1500 Fire insurance stock Rs. 500 Power Rs. 900 Employees state insurance contribution Rs. 150 The following information is available in respect of four departments. Departments A B C D Area sq ft. 1500 1100 900 500 No. of employees 20 15 10 Total wages Rs. 6000 4000 3000 2000 Value of Plant Rs. 24000 18000 12000 6000 Value of stock Rs. 15000 9000 6000 - Apportion the cost to the various departments by preparing overhead distribution chart.

Define decision-making. Explain the various steps involved in the decision- making process.

Shah Industries manufactures small capacity motors. The cost break-up of a motor is as under: Material Rs. 50 Labour Rs. 80 Variable Overheads 75% of labour cost Fixed overheads of the company amount to Rs. 2,40,000 p.a. The sales price of the motor is Rs. 230 each.

Determine the number of motors that have to be manufactured and sold in a year in order to break even. (ii) How many motors to be made and sold to make a profit of Rs. 1,00,000. (iii) If the sale price is reduced by Rs. 15 each, how many motors have to be sold to break even.

Explain the concept of transfer price. Elaborate in detail the different techniques available to work out the transfer price.

From the following details, which product would be recommended if time is the limiting factor? Particulars Product A Product B Direct Material Per Unit Rs. 24 Rs. Direct Labour @ Rs. 2 per hour Rs. 20 Rs. 30 Variable Overheads (% of labour cost) 200% 300% Selling Price Per Unit Rs. 150 Rs. 200

Define Budget. Elaborate in detail the necessary features of budgets.

Find out labour rate variance, labour efficiency variance and labour cost variance using the following data: Standard: 48 hours @ Rs. 3 per hour Actual: 50 hours @ Rs. 3.50 per hour

Explain in detail the advantages of standard costing system.

Adepartment attaints a sale of Rs. 6,00,000 at 80% of its normal capacity and its expenses are given below: Administrative Rs. Selling Rs. Expenses Costs Office Salaries 90,000 Salaries 8% of sales General Expenses 2% of sales Travelling Expenses 2% of sales Depreciation 7,500 Sales Office Expenses 1% of sales Rates & Taxes 8,750 General Expenses 1% of sales The distribution costs are: Wages – Rs. 15,000, Rent – 1% of sales, and other expenses – 4% of sales. Draw up a flexible administration overhead, selling and distribution overhead costs budget, operating at 80%, 90%, 100% and 110% normal capacity.