CMA

1(a) Profit as shown by the cost books of M/s Mehta Brothers for the year 2004 is rs. 80700. Com arison of the cost books an! financia" books re#ea"e! the fo""owin$% &tem )e reciation C"osin$ stock of finishe! $oo!s (actory *+ enses ,ffice *+ enses &nterest on Bank !e osits -oss on .a"e of (/rnit/re )i#i!en! recei#e! 0!#ertisement Cost Book 's. 10000 80000 122000 72000 3 3 3 480000 (inancia" Books 's. 12000 42000 120000 72000 5200 1400 5100 42400

Pre are reconci"iation statement an! a certain rofit as er financia" book 1(b) 0 com any6s tra!in$ an! rofit an! "oss acco/nt was as fo""ows% Trading and Profit & Loss A/c Particulars 7o /rchases 22210 -ess c"son$ stock 4080 7o !irect wa$es 7o works *+ enses 7o se""in$ e+ enses 7o a!ministrati#e e+ enses 7o !e reciation 7o net rfit Rs. 21130 10500 12130 7100 5340 1100 2300 77600 Particulars By .a"es 20000 /nits 8 's. 1.20 each By )isco/nt recei#e! By rofit on sa"e of "an! Rs. 75000 260 2340

77600

7he rofit as er cost acco/nts was on"y 's. 15770. 'econci"e the financia" an! cost rofit /sin$ the fo""owin$ information% (0) Cost acco/nts #a"/e of c"osin$ stock was 's. 4280 (B) 7he works e+ enses in cost acco/nts were taken as 1009 of the !irect wa$es (C) .e""in$ an! a!ministrati#e e+ enses were char$e! in cost acco/nts at 109 on sa"es an! 's. 0.10 er /nit res ecti#e"y. ()) )e reciation in the cost acco/nt was 's. 800 1(c) :a"son -t!. ro!/ce! an! so"! 1;000 :ashin$ machines !/rin$ the year en!in$ 11st March 2007. 7he s/mmari<e! 7ra!in$ 0n! Profit 0n! -oss 0cco/nt is $i#en be"ow% 's. 7o Cost of Materia"s Cons/me! 7o )irect :a$es 7o :orks *+ enses 7o =ross Profit c/! 7o se""in$ an! )istrib/tion *+ enses 7o >et Profit 200000 By .a"es 200000 100000 100000 800000 By =ross Profit b/! 100000 200000 100000 100000 's. 800000

800000 100000

7he mana$ement estimates the fo""owin$ for te year en!in$ 11st March 2008% 1. ,/t /t an! .a"es wi"" be of 2;000 washin$ machines 2. Prices of materia"s an! wa$es :i"" $o / by 229 on the re#io/s year6s "e#e". 1. :orks e+ eriences wi"" rise in ro ortion to the combine! cost of materia" an! wa$es 4. .e""in$ an! !istrib/tion e+ enses er /nit are e++timste! at 's. 20 Pre are a cost statement showin$ the rice at washin$ machines co/"! me markete! so as to yie"! a rofit of 109 on se""in$ rice. 2(a)

7he Ben$a" chemica" com any -t!. ro!/ction asses thro/$h two rocesses 0? B. &t is ascertaine! that in each rocess norma""y 2 9 of the tota" wt is "ost an! 109 is scra which from Process 0 an! B rea"i<es 's. 80 an! 's. 200 er ton res ecti#e"y. 7he fo""owin$ are the fi$/res re"atin$ to both the rocesses% &tems Process 0 Materia"s in tons 1000 Cost of Materia"s in 's. Per ton 122 :a$es in 's. 28000 Man/fact/rin$ e+ enses in 's. 8000 ,/t /t in tons 810 Pre are rocess cost 0/c showin$ Cost er ton of each rocess. 2(b) 0 man/fact/rer transfers 409 of ro!/ction of e#ery rocess to ne+t rocess an! 409 ro!/ction to stores at a rofit of 209 on cost for sa"e @o/ are $i#en the fo""owin$ information an! aske! to re are rocess && acco/nt% Anits bro/$ht in from Process & 200 /nits at accost of 's. 40000 Anit intro!/ce! (in Process &&) 200 /nits 8 's. 10 :a$es 's. 12200; o#erhea!s 's. 12200 >orma" "oss is 109 of in /t 2(c) 7h econtract "e!h$er of the com any showe! the fo""owin$ e+ en!it/re on acco/nt of contract n/m#er142 at 11st )ec 2001 Materia"s P"ant :a$es *stab"ishment char$es :a$es 0ccr/e! 54000 12000 101000 4000 700 Process B 70 200 10000 2220 780

7he contracts commence! on 1st Ban 2001 an! a contract rice was 's. 400000

Cash recei#e! on acco/nt to !ate was 's. 172000 re resentin$ 809 of the work certifie!; the remainin$ 209 bein$ retaine! /nti" com "etion. 7he #a"/e of materia" in han! was 's. 4200 an! the work finishe! b/t not certifie! was 's. 4000 Pre are an acco/nt in the res ect of the contract ass/min$ !e reciation on "ant 8 109 an! state the ro ortion of rofit to be taken to the cre!it of rofit an! "oss acco/nt an! a"so show the artic/"ars re"atin$ to the contract wo/"! a ear in the ba"ance sheet of the com any as on 11st )ec 2001.

1(a) =i#en the fo""owin$ information% (i+e! Cost Break3e#en sa"es Profit .e""in$ rice er /nit @o/ are reC/ire! to ca"c/"ate% 1. .a"es an! mar$ina" cost of sa"es 2. >ew break3e#en oint if se""in$ rice is re!/ce! by 109 1(b) 7he fo""owin$ information is e+tracte! by a financia" ana"yst from the books of a man/fact/rin$ com any Partic/"ars .a"es Dariab"e cost % )irect Materia" )irect -abo/r (actory o#erhea!s Marketin$ e+ enses 0!ministrati#e e+ enses Contrib/tion (i+e! cost% (actory o#erhea!s Marketin$ e+ enses 0!ministrati#e e+ enses 's. 100000 100000 80000 70000 20000 20000 10000 20000 's. 1000000 's. 4000 's. 20000 's. 1000 's. 20

800000 200000

100000

>et rofit a) Com /te% i) PD ratio ii) Break3e#en oint

100000

b) 7here is a ro osa" to increase fi+e!cost by 's. 10000; sa"se an! #ariab"e cost remainin$ /nchan$e!. Com /te new break3e#en oint c) 0noother ro osa" is to increase fi+e! cost by 's. 22000 i) ii) .a#in$ 's. 22000 from !irect -abo/r .a#in$ 's. 22000 from !irect materia"s

Com /te re#ise!% i) ii) iii) 1(c) =i#en be"ow are the financia" statement of 0BC com any a) Ba"ance sheet as on 11st )ec 2007 -iabi"ities .hare Ca ita"% 79 Pref. .hares (2400 shares 8 's. 10) *C/ity .hares (1100 shares 8 's. 100) 'eser#e (/n! -on$ term "oans Cre!itors ,ther c/rrent -iabi"ities Pro#ision for ta+ 0ssets (i+e! 0ssets Cash 24000 &n#estment(short term) )ebtors 110000 &n#entories 104000 182000 41400 2400 11800 220000 Profit an! -oss 0cco/nt for the year en!in$ 1131232002. 's. 's. 118000 11000 15000 22000 78000 PD ratio Break3e#en oint Profit of the com any

220000 's. 150000 112400 24400 22720 11820 2820 24000

Partic/"ars >et .a"es -ess% Cost of =oo!s so"! -ess% 0!ministration *+ enses , eratin$ rofit -ess% &nterest Profit before ta+(PB7)

-ess% 7a+ >et Profit after ta+(P07) Ca"c/"ate the fo""owin$ ratios% a) =ross rofit ratio b) >et rofit 'atio c) E/ick 'atio !) , eratin$ 'atio e) C/rrent 'atio f) )ebt *C/ity 'atio $) *P.(*arnin$ er *C/ity share)

10400 12400

4(a) (rom the two ba"ance sheets as on 1131232000 an! 1131232001; yo/ are reC/ire! to re are statement showin$ the ("ow of (/n!s% Partic/"ars -iabi"ities% 7ra!e Cre!itors .hort term -iabi"i"ities ,/tstan!in$ *+ enses Mort$a$e -oan .hare Ca ita" 'etaine! *arnin$s 0ssets% Cash )ebtors .tock &n#estment (i+e! 0ssets =oo!wi"" 0!!itiona" &nformation% (1) )/rin$ the year 2001 !e reciation ro#i!e! on fi+e! 0ssets 's. 1720. 12000 21200 14200 2000 42720 2000 125720 5000 22000 42000 3 71000 3 145000 2000 11200 14100 7200 10000 20000 14720 125720 2001 25100 14500 8000 12000 42000 17000 145000

(2) =oo!wi"" written off by 'etaine! earnin$s (1) )/rin$ the year 2001 )i#i!en! ai! 's. 1200/3. 4(b) (rom the fo""owin$ Ba"ance .heet re are a (/n! ("ow .tatement with a s/ :orkin$ Ca ita". 2002 0ssets% Cash Bi""s 'ecei#ab"e -an! ? B/i"!in$ .tock -iabi"ities% .hare Ca ita" Payab"e .ec/rities(short term) Bi""s ayab"e Profit ? -oss 0/c Pro#. (or )e reciation 4(c) 7he e+ enses b/!$ete! for ro!/ction of 10000 /nits in a factory is f/rnishe! be"ow% Per Anit 's. 70 22 20 10 2 11 7 2 122 10000 20000 10000 20000 110000 72000 20000 12000 10000 10000 110000 ortin$ .che!/"e of 2001 42000 42000 80000 11000 200000 52000 40000 12000 14000 15000 200000

Materia"s -abo/r Dariab"e o#erhea!s (i+e! o#erhea!s Dariab"e e+ enses .e""in$ e+ enses(109 fi+e!) )istrib/tion e+ enses(209 fi+e!) 0!ministrati#e *+ enses 7ota" cost of sa"e er /nit(to make an! se"") Pre are a f"e+ib"e b/!$et for ro!/ction of% a) 8000 /nits b) 4000/nits an! show the res/"t are er /nit.

0ss/me that a!ministrati#e e+ enses are ri$i! for the a"" "e#e" of ro!/ction

2.

(a) :rite in short; !ifferent metho!s of a""ocatin$ works o#erhea!. (b) :hat !o yo/ mean by F'etention Money6G (c) *+ "ain the obHecti#es of Mana$ement 0cco/ntin$. (!) *+ "ain the factors affectin$ workin$ ca ita".