NIT Roll Nowseseeeseeseeees Maximum Marks - 100 Total No. of Questions - 6 Total No. of Printed Pages - 4 Time Allowed - 3 Hours Marks All questions are compulsory. Working notes should form part of the answer. Make assumptions wherever necessary. we Ltd. is manufacturer of office cabinets, During the FY 2076/77, it sold 12,000 units of cabinets at the price of Rs.15,000 per unit. At the beginning of the year there were 1,500 units of finished goods in stock which was 800 units at the end of the year. Similarly there was work in progress of 400 units in the beginning of the year and 700 units at the end of the year. Opening WIP was 100% complete in respect of materials and 40% complete in respect of labour and overhead. Closing WIP was 100% complete in respect of materials and 50% complete in respect of labour and overhead. During the year following expenses were incurred: Expenes Amour Rs. Direct Material 81,200,000 Direct Labour 13,788,000 Variable Overhead 11,490,000 Fixed Overhead 22,980,000 In comparison to last year, the cost per unit have increased as follows: Direct Material 11% Direct Labour ™% Variable Overhead 5% Fixed Overhead 44% Selling Administration cost of Rs. 1,500 per unit sold is incurred by G Ltd. and it incurs fixed selling and administration cost of Rs. 700,000 per year. Required: a) Profitability Statement as per Absorption Costing b) Profitability Statement as per Marginal Costing ¢) Statement showing element wise cost per unit assuming FIFO basis 20 2. 9) Kermponen' for an assembly are produced under the control of the production ‘manager. These are assembled and sold under the supervision of the sales manager. The production manager is entitled for a bonus payment for himself at | 1/8" and the workers at 7/8" of the difference between the notional value and cost ‘duction of the delivered components. The notional value is assessed at apr ‘ sess “518,500 for the components issued to assembly. The sales manager is entitled Fo a bonus of 22% of the profits for himself and 12:96 is distributed among his sales staff. The sales during a period amount to Rs, 65,000. From the under se milioned particulars, detail the calculations involved in arriving at the bonus for and the staf. Also, find the impact of such bonus as a peresniage = Rs. 22,800 16,400 248,600 of sales. _ Raw materials at the beginning of the period Raw materials at the end of the period during the periodQ) Wages — Production 46,200 ‘Wages — Assembly 18,100 Overheads ~ Production 212,500 Overheads ~ Sales 45,200 Credit for scrap realized pertaining to components 8,700 Work-in-progress of production at the beginning 12,500 Work-in-progress of production at the end 18,200 Completed assemblies at the beginning 36,000 Completed assemblies at the end 24,030 Net realization on assemblies sold 650,000 jepal Lever Ltd. has three production departments *P’, ‘Q” and ‘R’ and two service departments ‘X’ and *Y’. Details pertaining to which are as under: P Q R x Y Direct Wages (Rs.) 5,000 | 1,500 | 4,500 | 2,000 800__| meee Working Hours 13,191 7,598 14,995, < : Value of Machine (Rs.) | 100,000 | 80,000 | 100,000 | 20,000 | 50,000 |3#2°° HP of Machines 100 80 100 20 so | 3 Light points (Nos.) 20 10 15 5 10 |@ Floor Space (sq. ft.) 2,000 2,500 3,500 1,000 1,000} \ooo? ‘The expenses are as follows: Particulars Amount Rs. Rent and Rates - 10,000 General Lighting _ 600 Indirect Wages 3,450 Power 3,500 Depreciation on Machines 70,000 ‘Sundries (apportionment on the basis of direct wages) 13,800 The expenses of Service Departments are allocated as under: P Q R x Y x 45%. 15% 30% - 10% Y 35% 25% 30% 10% : Product ‘A’ is processed for manufacture in Departments P, Q and R for 6, 5 and 2hours respectively. . Direct cost of Product A are: Direct material cost is Rs, 65 per unit and Direct labour cost is Rs. 40 per unit Direct maters a You are required to: 10 i) Prepare a statement showing distribution of overheads among the production and service departments. ii) Calculate recovery rate per hour of each production department after redistributing the service departments costs. iii) Find out the total cost of Product ‘A’. ' Ps P.T.O.E} GB) Kone Contraction Ltd. undertook a contract for Rs. 500,000 on 1* Shrawan 2075. On Ashadh 31" of 2076, when the accounts were closed, the following details about the contract were gathered. Rs. Rs. Material Purchased 100,000 | Wage accrued 31° 5,000 Ashadh 2076 ‘Wage paid 45,000 | Work certified 200,000 General Expenses 10,000 | Cash received 150,000 Plant Purchased 50,000 | Work uncertified 15,000 Material on Hand 31* 25,000 | Depreciation of plant 5,000 Ashadh 2076 ‘The above contract contained an escalation clause "In the event of price of materials and rate of wage increase by more than 5%, the contract price would increase accordingly by 25% of the rise in the cost of materials and wages beyond 5% in each case" . It was found that since the date of signing the agreement the price of materials and wages rate increased by 25%. The value of work certified does not take into account the effect of the above clause. Prepare the contract account. Working should form part of answer. b) ARG Company manufactures int nt milk supplement, The shelf life of the supplement ig 6 months and it follows suitable inventory policy as per shelf life. 000 packets as on I*' Shrawan 2077 and expects to produce 75.000_packets which is same as that produced in previous year. Variable cost of the opening stock is Rs. 20 per packet. For the FY 2077/78, PRG expects fo sale 75,000 packets of the supplement. wut escalation in cost by 25% on variable PRG has an opening sto Costing department of PRG has worked o cost_and 10% on fixed cost for the FY Rs. 1,500,000, Based on the estimation of cost, sales supplement is announced for FY 2077/78. Required: a cecoratin in cost by 25 7/78. The estimated fixed costs is i) Break even volume for FY 2077/78, and ij Estimate of profit that would be realised in FY 2077/78 hat are the advantages of Perpetual Inventory System ? 4, price of Rs. 50 per packet of VA manufacturing company has disclosed a net loss of Rs. 213,000 as per their cost accounting records for the year ended March 31, 2020. However, their financial accounting records disclosed a net loss of Rs. 258,000 for the same period. A scrutiny of data of both the sets of books of accounts revealed the following information: Factory overheads under-absorbed ‘Administration overheads over-absorbed iii) | Depreciation charged in financial accounts + iv) | Depreciation charged in cost accounts NIT P.T.O,@) v) | Interest on investments not included in cost accounts 20,000 vi) | Income-tax provided in financial accounts 65,000 vii) | Transfer fees (credit in financial accounts) 2,000 viii) | Preliminary expenses written off 3,000 ix) | Over-valuation of closing stock of finished goods in 7,000 cost accounts repare a Memorandum Reconciliation Account. 5 PAKHSI Ltd. produces two products, C and D using same raw materials i.e Cream and Flour. One unit of C uses 3 liters of Cream and 4 Kg. of Flour. One unit of D uses $ liters of Cream and 2 Kg. of Flour. Cream and Flour can be purchased at unit price of Rs. 800 and Rs. 60 respectively. Budgeted Sales for FY 2077/78 are 8,300 units of C and 5,800 units of D. As on 1/4/2077 there is.a stock of 400 units of C, 300 units of D, 600 liters of Cream and 280 Kg. of flour. Considering the market demand, the PAKHSI plans to maintain stock of 600 units of C, 600 units of D, 5,000 liters of Cream and 3,500 Kg. of flour at the end of the yeat. Owing to the experience in handling stores, store manager cum purchase ‘manager estimates that following provision is required for damage of raw materials and produce of the company: * 6 40. Units D 20. Units Cream 800. Liter Flour 300 Kg. Prepare material purchase budget. 5 oF From the following information, calculate employee tumover rate using- (i Separation Method, (ii) Replacement Method, (iii) New Recruitment Method, and (iv) Flux Method: No. of workers as on 01.01.2020 = 3,600 - . No. of workers as on 31.12.2020 = 3,790 During the year, 40 workers left while 120 workers were discharged. 350 workers were recruited during the year, of these 150 workers were recruited because of exits and the rest were recruited in accordance with expansion plans, 5 5. fk automobile company purchases 27,000 spare parts for its annual requirements. ‘The cost per order is Rs. 240 and the annual carrying cost of average inventory is 12.5%. Each spare part costs Rs. 50. ‘At present, the orgler size is 3,000 spare parts. (Assume that number of days ina year = 360 days) Find out: 7 i) How much cost of the company would be saved by opting the EOQ model? The reorder point under EOQ model, if lead time is 12 days. Ffow frequently should orders for procurement be placed under EOQ model?” ine the circumstances under which a Cost Audit ordered. iscuss the treatment of by-product cost in Cost Accounting. 4 (4%2.5=10) (6. Jie sts nates: AY puted cost ot Sy Restos lity accounting © SG Cost reduction 4) Prati costing nar