NAHATA PROFESSIONAL ACADEMY
Time:-
Test Series 4th (Cost )
M.M.:- 56
Q.1. HTC Ltd. is a manufacturer of Laptops and for this it requires microprocessors. A Laptop requires
one microprocessor. The current market demand for the HTCs laptop is 140000 units per annum.
The cost of placing an order is Rs. 13500
Purchase price per unit inclusive of shipment charges is Rs. 6000
Annual cost of storage per unit is Rs. 32.5
Orders are delivered within 4 to 8 weeks and for emergency purchase it takes 2 weeks.
Rate of usage of microprocessor is 1500 units to 2800 units per week.
From the above details you are required to calculate
(1) Re-order quantity
(2) Re-ordering level
(3) Maximum level
(4) Minimum level and
(5) Danger level.
[5 Marks]
Q.2. NM Ltd. is a manufacturing company having three production Dept. X, Y and Z and two service
Dept. P and Q.
The following is the budget for the year 2012-13:
Total (Rs.) X (Rs.) Y (Rs.) Z (Rs.) P (Rs.) Q (Rs.)
Direct Materials
20000 35000 40000 15000 25000
Direct Wages
35000 48000 26000 25000 28000
Factory rent
42000
Power
30000
Depreciation
24000
Other overheads
84000
Additional Informations:
Area (Square Feet)
1200
600
900
150
150
Capital value of Assets (Rs. In lakh)
15
30
15
10
5
Machine hours
1500
3000
4200
1200
900
Hours power of Machines
120
80
40
30
30
A technical assessment of the apportionment of expenses of service Dept. is as under:
X
Y
Z
P
Q
Service Dept. P
40%
20%
25%
15%
Service Dept. Q
55%
15%
10%
20%
You are required to compute:
(i)
A statement showing distribution of overheads to various Dept.
(ii)
A statement showing re-distribution of service Dept. expenses to production Dept.
[8 Marks]
Q.3. The following balances were extracted from a company’s ledger as on 31st Dec 2011.
Rs.
Rs.
Raw Materials control A/c
42000
Work-in-progress control A/c
16000
Finished stock control A/c
24000
Nominal ledger control A/c
82000
82000
82000
Further transactions took place during the following quarter as follows:
Factory overhead allocated to WIP
11500
Goods finished at cost
38800
Raw Materials purchased
32400
Direct wages allocated to WIP
19300
Cost of goods sold
46000
Raw materials issued to production
21000
Raw materials credited by suppliers
1200
Inventory audit raw material losses
1000
WIP rejected (With no scrap value)
1300
Customer’s returns (At cost) of finished goods
Prepare all ledger Accounts in cost ledger.
3400
[12 Marks]
Q.4. While manufacture of the main product ‘A’ two by-products ‘P’ and ‘Q’ emerge. The joint expenses
of manufacture amount to Rs. 167550. All the three products are processed further separation and sold
as per details given below:
Main Product
By Product
‘A’
‘P’
‘Q’
Sales (Rs.)
130000
70000
50000
Cost incurred after separation (Rs.)
8000
7000
6000
Profit as percentage on sales (%)
20
10
15
Total fixed selling expenses are 10% of total cost of sales which are apportioned to the three products in
ratio of 5:3:2.
Prepare a statement showing the appointment of joints costs to the main product and two by-products.
[5 Marks]
Q.5. Broyhill furnitures make curio cabinets for various museums and art galleries. It makes 7 curio
cabinets per hour by employing 5 skilled, 10 semiskilled and 20 unskilled workers. The standard wage
rate is Rs. 24 per labour hour. During the last week workers worked for 56 hours and made 400 curio
cabinets. 2% of the time paid was lost due to the abnormal reasons. The actual hourly rate paid to
skilled, semiskilled and unskilled workers were Rs. 30, Rs. 24 nd Rs. 18 respectively. You are required to
calculate
(i) Labour cost variance
(ii) Labour rate variance
(iii) Labour efficiency variance and
(iv)Idle time variance.
[5 Marks]
Q.6. Marlboro Ltd. has two factories for producing cigarettes of identical quality. The figures of F/Y
2011-12 are as follows:
Factory A
Factory B
Selling price per packet (Rs.)
75
75
Variable cost per packet (Rs.)
60
65
Fixed cost (Rs.)
310000
215000
Sales (Units)
35000
40000
Production capacity (Units)
40000
45000
Fixed cost includes Depreciation on plant and machinery in factory A and factory B Rs. 40000 and Rs.
38000 respectively. You are required to calculate:
(i)
Break-even point in sales and units for each factory separately
(ii)
Cash BEP in units for each factory separately
(iii)
BEP in units for company as a whole. Current product mix of factory A and factory B is 1:2.
[8 Marks]
Q.7. MTK Ltd. purchased 10000 Kgs of a basic material @ Rs. 12 per Kg and issued it for further
processing in purifying Dept. In purifying Dept. wages paid amounted to Rs. 4200 and overhead was
applied @ 150% of the labour cost. Indirect materials costing Rs. 1500 were introduced into the process.
The normal yield from the process is 90%. 9100 kgs output was obtained from this purifying process.
Any difference in weight between the input of basic material and output of purified material can is sold
@ Rs. 1.50 per Kg.
The process is operated under a licence for which royalty @ Rs. 0.20 per Kg. of purified material
produced is paid.
You are required to prepare:
(i)
Purifying process A/c
(ii)
Normal loss A/c
(iii)
Abnormal loss/gain A/c
(iv)
Royalty payable A/c.
[5 Marks]
Q.8.
(a) Define the terms ‘Cost Centre’ and ‘Cost Unit’.
(b) Distinguish between variable cost and direct cost.
(c) Define product cost. Describe three different purposes for computing product costs.
(d) Explain briefly the procedure for the valuation of work-in-process.
[2 Marks each point]