Conceptual case: 1. A prctising CA now spends Re.90 per km on taxi fares for his clients work.

HE is considering two other alternatives, the purchase of a new small car or an old bigger car.The estimated cost figures are: Iteams Purchase price Sale price after 5 years Repairs and servicing per annum Taxes and insurance per annum Petrol consumption per litre Petrol price per liter New small car Rs.35000 Rs.19000 Rs.1000 Rs.1700 10 km Rs.3.50 Old big Car Rs.20000 Rs.12000 Rs.1200 Rs.700 7 Km Rs.3.50

HE estimated that he does 10000 Kms annually.Which of the three alternatives will be cheaper?If his practice expands and he has to do 19000 km pe annum,what should be his decision?At how many km per annum will be cost of the two cars break even and why? Ignore interest and income tax. Business Application Case Tasty Bread Manufacturing Tasty Bread makes and supplies bread throughout the state of Gujarath .Three types of bread produced: loaves, rolls and buns.Seven operations describe the production process. 1. Mixing: Floour, milk, yeast, salt, butter and so on are mixed in a large vat. 2. Shaping: A conveyor belt transfers the dough to a machine that weights it and shapes it into loaves, rolls or buns, depending on the type being produced. 3. Rising: The individually shaped dough is allowed to sit and rise. 4. Baking: The dough is moved to a 100 feet long funned oven (The dough enters the oven on racks and spend 20 minutes moving slowly through the oven.

5. Cooling: The bread is removed from the oven and allowed to cool. 6. Slicing:For loaves and buns(hamburger and hot dog) the bread is sliced 7. Packing :The bread is wrapped(packaged) Tasty bread produces its products in batches.The size of the batch depends on the indivisual orders that must be filled (orders come from retail grocers throughout the state).The production is contineous. Assume that operating costing is the best approach for this bread manufacturer.Describe in detail how you would use opersting costing.Use a batch of dinner rolls( consisting of 1000 packages of 12 rolls ) and a batch of whole wheat loaves(consisting of 5000,24-oz,sliced loaves )as examples.