JANAK COLLEGE 8.

The following information were extracted from the books of ABC production house
Internal Examination – 2075 having two production department and one service department:
Rent Rs.10,000 Machine repair cost Rs.5,000
Level: BBS 2nd year Full Marks: 50 Indirect wages Rs.15,000 Depreciation Rs.20,000
Time: 1.5 Hours Sub: Cost and Management Accounting Pass Marks: 18 Power expenses Rs.16,000 Lighting expenses Rs.30,000
Other information related to the production house are:
Brief answer questions: (2 x 5 = 10)
1. Write down any two objectives of cost accounting. Particulars Production Dept. A Production Dept. B Service Dept. S
2. What do you mean by fixed and variable cost?
3. The production units and indirect wages cost for a manufacturing company is given Direct material (Rs.) 10,000 10,000 5,000
below:
Direct wages (Rs.) 4,000 6,000 5,000
Production units Indirect wages
Hp of Machine 1 3 4
3,000 22,000
8,000 42,000 Floor space (Meter) 800 500 700
Required: Segregation of variable and fixed cost by using High – Low method Cost of Machinery Rs.2,00,000 Rs.50,000 Rs.1,50,000
4. A company purchase a product for Rs.40,000 and sell on Rs.1,00,000 with profit
Rs.10,000. Calculate fixed cost for the period. Re-distribution from 40% 60% -
5. A Company annually needs 5,000 units of raw materials .The storing cost is 10% of service dept.
inventory price and procurement cost is Rs.40 per order. Machine Hours 7,000 3,000 1,000
Required: (a) Economic order quantity
Required: (a) Overhead distribution statement
Short answer questions: (9 x 3 = 27) (b) Overhead rate per machine hour
6. The following information were provided to you ;
Selling price per unit Rs.20 Comprehensive answer Questions: (1 3x 1 = 13)
Fixed cost for the period Rs.1,00,000 9.The following details are recorded from a company for the previous month:
Variable cost per unit Rs.15 Products A B C
Required: (a) Profit volume ratio (b) BE sales volume in units and Rs. (c) Sales Production units 3,000 units 2,000 units 5,000 units
amount to earn after tax profit Rs.50,000 with 20% tax rate (d) BEP in Rs. if selling price Labour hour per unit 4 1.5 1
is increased by 25% (e) What price should be charged to earn profit Rs.80,000 from Machine hour per unit 2 1 2
selling 40,000 units. Raw material cost per kg Rs.4 Rs.3 Rs.5
7. The following information were recorded while producing 19,000 units and selling Material in kg per unit 2 kg 3 kg 1kg
20,000 units. No. of set up 5 4 6
Direct material per unit Rs.4 The indirect overhead occurred during the month are as given below:
Direct labour cost Rs.2 Set - up related cost Rs.30,000 (No. of set – ups)
Variable selling overhead per unit Rs.2 Machine related cost Rs.18,000 (Machine hours)
Fixed manufacturing cost Rs.40,000 Production scheduling cost Rs.20,000 (No. of Production run)
Fixed office cost Rs.30,000 Packaging and dispatching cost Rs.34,000 (No. of dispatch)
Fixed selling expenses Rs.15,000 Additional informations:
Normal capacity 20,000 units *Output is realized in a production run of 1,000 units each.
Closing stock 2,000 units *Materials are dispatched in a lot of 500 kg each for each product.
Selling price per unit Rs.15 *Direct labour cost per hour is Rs.10
Required: (a) Income statement under variable costing Required: Calculate cost per unit under traditional costing using labour hour and under
ABC method.