Q-5 To calculate the cost per unit of the product at
production levels of 2000 units and 3000 units, we
need to use the high-low method to separate the
fixed and variable costs.
First, we need to determine the variable cost per
unit:
Variable cost per unit = (Cost at High Level - Cost
at Low Level) / (High Level - Low Level)
Variable cost per unit = (7.50 - 6.00) / (2500 -
2000)
Variable cost per unit = 0.01
Next, we can use the variable cost per unit to
determine the fixed cost:
Fixed cost = Total cost - (Variable cost per unit x
Production level)
Fixed cost = 1500000 - (0.01 x 2500)
Fixed cost = 12500
Now, we can use the variable and fixed costs to
calculate the cost per unit at production levels of
2000 and 3000 units:
At production level of 2000 units:
Variable cost = 0.01 x 2000 = Rs. 20
Fixed cost = Rs. 12500
Total cost = Rs. 12500 + Rs. 20 + Rs. 70000 + Rs.
30000 + Rs. 4000 + Rs. 1200 + 0.2Rs. 10800 +
0.5Rs. 6000
Total cost = Rs. 12500 + Rs. 89700
Total cost = Rs. 102200
Cost per unit = Total cost / Production level
Cost per unit = Rs. 102200 / 2000
Cost per unit = Rs. 51.10
At production level of 3000 units:
Variable cost = 0.01 x 3000 = Rs. 30
Fixed cost = Rs. 12500
Total cost = Rs. 12500 + Rs. 30 + Rs. 70000 + Rs.
30000 + Rs. 6000 + Rs. 2000 + 0.2Rs. 10800 +
0.5Rs. 6000
Total cost = Rs. 12500 + Rs. 124230
Total cost = Rs. 136730
Cost per unit = Total cost / Production level
Cost per unit = Rs. 136730 / 3000
Cost per unit = Rs. 45.57
Therefore, at a production level of 2000 units, the
cost per unit of the product is Rs. 51.10, and at a
production level of 3000 units, the cost per unit of
the product is Rs. 45.57.
HR Functions
Human resource (HR) is responsible for managing the
people who work for an organization. HR functions
include a range of activities that are essential to attract,
develop, retain and manage the workforce. Some of the
key HR functions are:
Recruitment and selection: This function involves
identifying the job requirements, attracting potential
candidates, screening and selecting the most suitable
candidates.
Training and development: This function involves
designing and implementing training programs to enhance
the skills, knowledge and performance of employees.
Compensation and benefits: This function involves
designing and managing the pay structure, benefits,
incentives and rewards for employees.
Performance management: This function involves
setting performance goals, providing feedback, evaluating
performance and identifying areas for improvement.
Employee relations: This function involves managing
employee relations, including addressing grievances,
resolving conflicts and promoting a positive work culture.
Compliance: This function involves ensuring that the
organization is in compliance with the legal and
regulatory requirements related to employment.
Health and safety: This function involves creating and
maintaining a safe and healthy work environment,
ensuring that employees are aware of and follow the
safety guidelines.
Succession planning: This function involves identifying
key positions and potential candidates for those positions,
and developing plans to ensure continuity in case of
retirements, resignations or other vacancies.
Overall, the HR functions are critical to the success of an
organization. They help to ensure that the organization has
the right people with the right skills, knowledge and
attitudes to achieve its goals and objectives.
HR Qualities
 Strong communication skills
 Interpersonal skills
 Organizational skills
 Attention to detail
 Ability to manage conflicts
 Knowledge of employment laws and regulations
 Strategic thinking and problem-solving skills
 Ability to handle confidential information
 Flexibility and adaptability
 Empathy and emotional intelligence
 Leadership and team management skills
 Strong decision-making abilities
 Technology proficiency
 Continuous learning and development mindset.
 Ability to build and maintain positive relationships
with stakeholders
 Strong ethical standards and integrity
 Analytical and data-driven mindset
 Excellent project management skills
 Ability to manage multiple priorities and deadlines
 Creative thinking and innovation
 Financial acumen and budgeting skills
 Commitment to diversity, equity, and inclusion
initiatives
 Customer service orientation
 Passion for employee development and talent
management
 Willingness to take risks and try new approaches
 Ability to inspire and motivate others.
Significance of HRM
HRM helps to attract and retain the right talent for an
organization
HRM helps to align employee goals with
organizational goals
HRM ensures compliance with employment laws and
regulations
HRM plays a crucial role in managing employee
performance and productivity
HRM helps to manage employee relations and
resolve conflicts
HRM facilitates employee training and development
to enhance skills and knowledge
HRM plays a critical role in managing organizational
change and transformation
HRM helps to foster a positive organizational culture
and promote employee engagement
HRM supports succession planning and career
development for employees
HRM plays a crucial role in managing compensation
and benefits for employees
HRM helps to manage health and safety risks in the
workplace
HRM supports diversity, equity, and inclusion
initiatives in the workplace
HRM plays a crucial role in managing the employer
brand and reputation
HRM helps to measure and analyze HR metrics and
data to inform decision-making.
Diff between recruitment and selection
Recruitment and selection are two key functions in
Human Resource Management (HRM) that involve
identifying, attracting, and hiring the right candidates
for available job positions. While they are related,
there are some differences between recruitment and
selection, including:
Definition: Recruitment is the process of identifying
and attracting potential candidates for available job
positions, while selection is the process of choosing
the best candidate from a pool of applicants.
Purpose: The purpose of recruitment is to create a
pool of potential candidates who meet the
qualifications for a specific job position, while the
purpose of selection is to choose the most suitable
candidate from the pool of applicants.
Activities: Recruitment activities include advertising
job vacancies, screening resumes, and conducting
initial interviews, while selection activities include
administering pre-employment tests, conducting in-
depth interviews, and checking references.
Timing: Recruitment occurs before selection and
involves attracting potential candidates to apply for
available job positions, while selection occurs after
recruitment and involves choosing the best candidate
from the pool of applicants.
Outcome: The outcome of recruitment is a pool of
qualified candidates who are interested in the
available job positions, while the outcome of
selection is the identification of the best candidate for
the job position.
In summary, recruitment is the process of identifying
and attracting potential candidates for available job
positions, while selection is the process of choosing
the best candidate from a pool of applicants who have
applied for the job.
The process of ABC (Activity Based Costing)
costing typically involves the following steps:
1. Identify all the activities required to
create the product.  involve the company. Cost accounting is helpful
2. Divide the activities into cost pools,
which includes all the individual costs
related to an activity—such as
manufacturing. Calculate the total
overhead of each cost pool.
3. Assign each cost pool activity cost
drivers, such as hours or units.  creditors, banks, financial institutions, etc, accurate
4. Calculate the cost driver rate by
dividing the total overhead in each
cost pool by the total cost drivers.  calculation by considering all factors of both
5. Divide the total overhead of each cost
pool by the total cost drivers to get the
cost driver rate.  MGT. ACCOUNTING -Better administration,
6. Multiply the cost driver rate by the
number of cost drivers.  analysis, etc., profit enhancement, secrecy of
Overall, ABC costing is a more accurate and
detailed method of cost accounting than traditional
methods, which often allocate costs based on
arbitrary factors such as direct labor or machine
hours. By assigning costs based on the actual
activities performed, ABC costing provides a more
accurate picture of the true cost of producing a
product or service.
Difference between ABC Costing and Standard
costing
ABC costing and standard costing are two different
methods of cost accounting used by businesses to
determine the cost of producing goods or services.
The main differences between ABC costing and
standard costing are:
Cost allocation basis: ABC costing allocates costs
based on the activities that are performed, while
standard costing allocates costs based on
predetermined standard costs per unit of output.
ABC costing provides a more accurate picture of
the true cost of producing a product or service,
while standard costing may not reflect actual costs
accurately.
Complexity: ABC costing is generally more
complex than standard costing as it involves
identifying and analyzing all the activities that go
into producing a product or service. Standard
costing, on the other hand, is a simpler method that
assigns costs based on predetermined standard
costs.
Flexibility: ABC costing is more flexible than
standard costing as it can be customized to fit the
unique requirements of different products or
services. Standard costing is more rigid and may
not work well for all products or services.
Focus: ABC costing focuses on the activities that
consume resources, while standard costing focuses
on the cost of producing a unit of output. ABC
costing helps to identify areas where costs can be
reduced or eliminated, while standard costing is
useful for cost control and budgeting.
Accuracy: ABC costing provides a more accurate
picture of the true cost of producing a product or
service, while standard costing may not reflect
actual costs accurately.
Overall, both ABC costing and standard costing
have their advantages and disadvantages, and
businesses may choose to use one or the other, or a
combination of both, depending on their needs and
requirements.
Cost accounting is a process of assigning costs to
cost objects that typically include a company's
products, services, and any other activities that
because it can identify where a company is spending
its money, how much it earns, and where money is
being lost.
Types of Accounting: - FINANCIAL
ACCOUNTING -Systematic method of recording
transactions, main purpose- P/L & B/S, useful to
picture of financial position.
COST ACCOUNTING -Evaluating cost, cost
manufacturing & administration, goal- price
fixation, cost control, pinpoints wastages, leakages
efficient decision making via MIS, CVP & BEP
records, useful to creditors, shareholders.
AUDITING -Auditor inspects & certifies the A/Cs
for accuracy, internal audit by the co. employee also
performed
TAX ACCOUNTING -Preparation & filing of tax
returns, compliance of laws, tax reports preparation,
reduction of taxes in legal way, verification,
considering different aspects of taxes.
FUND ACCOUNTING -Keeping records of funds
of NPOS, separate funds maintained for separate
works for assurance of usage.
GOVT. ACCOUNTING -Keeping records for
central & state govt. for allocations & utilization of
various budgets to ensure proper usage.
FORENSIC ACCOUNTING -Calculates damages or
settling disputes in legal matters, investigations
carried out, also called legal accounting.
FIDUCIARY ACCOUNTING -Accounting &
evaluation of a third party's business & property
maintained under the care of another person.
Difference between Cost Accounting and
Management Accounting
1. Cost Accounting is all about the Cost and it
includes things like Cost control, Cost computation
and Cost reduction. Whereas Management
Accounting is about managing the organization and
making effective decisions.  Product A:
2. Cost Accounting has a narrow scope whereas
Management Accounting has much broader scope. 
3. Cost Accounting helps the Business in preventing
irrelevant spending which sometimes goes beyond
the budget. Whereas Management Accounting gives
an idea about how Management should strategize.  = Rs. 9,435
4. Cost Accounting is quantitative in nature whereas
Management Accounting is both quantitative and
qualitative in nature. 
5. Cost Accounting is used for shareholders,
Management and vendors whereas Management
Accounting is only used for Management of the
Business. 
A. Traditional Method:
Total overheads = Rs. 550,000 + Rs. 820,000 + Rs.
618,000 = Rs. 1,988,000
Total machine hours = 160 + 384 + 2,000 = 2,544
Overhead rate per machine hour = Total overheads /
Total machine hours
= Rs. 1,988,000 / 2,544 = Rs. 781.60
Now, we can calculate the cost per unit of each
product as follows:
Product A:
Direct materials = 20 units x Rs. 1,200 = Rs. 24,000
Direct labor = 20 units x Rs. 2,400 = Rs. 48,000
Machine hours = 160
Overheads = 160 x Rs. 781.60 = Rs. 125,056
Total cost = Direct materials + Direct labor +
Overheads
= Rs. 24,000 + Rs. 48,000 + Rs. 125,056 = Rs.
197,056
Cost per unit = Total cost / Annual output
= Rs. 197,056 / 20 = Rs. 9,853.20
Product B:
Direct materials = 5,000 units x Rs. 1,200 = Rs.
6,000,000
Direct labor = 5,000 units x Rs. 2,400 = Rs.
12,000,000
Machine hours = 2,000
Overheads = 2,000 x Rs. 781.60 = Rs. 1,563,200
Total cost = Direct materials + Direct labor +
Overheads
= Rs. 6,000,000 + Rs. 12,000,000 + Rs. 1,563,200 =
Rs. 19,563,200
Cost per unit = Total cost / Annual output
= Rs. 19,563,200 / 5,000 = Rs. 3,912.64
B. Activity Based Costing:
Volume-related activity costs = Rs. 550,000 + Rs.
820,000 = Rs. 1,370,000
Setup-related costs = Rs. 544,000
Purchase-related costs = Rs. 44,000
We can allocate the overhead costs to each product
as follows:
Volume-related activity costs = (20 / 5000) x Rs.
1,370,000 = Rs. 5,480
Setup-related costs = (44 / 544) x Rs. 544,000 = Rs.
44,262
Purchase-related costs = (544 / 2,544) x Rs. 44,000
Total cost = Direct materials + Direct labor +
Overheads
= Rs. 24,000 + Rs. 48,000 + Rs. 5,480 + Rs. 44,262
+ Rs. 9,435
= Rs. 131,177
Cost per unit = Total cost / Annual output
= Rs. 131,177 / 20 = Rs. 6,558.85
Product B:
Volume-related activity costs = (5000 / 5000) x Rs.
1,370,000 = Rs. 1,370,000
Setup-related costs = (140000 / 544) x Rs. 544,000
= Rs. 14,086,029
Purchase-related costs = (120000 / 2,544) x Rs.
44,000 = Rs. 2,070,423
Total cost = Direct materials + Direct labor +
Overheads
= Rs. 6,000,000 + Rs. 12,000,000 + Rs. 1,370,000 +
Rs. 14,086,029 + Rs. 2,070,423
= Rs. 35,526,452
Cost per unit = Total cost / Annual output
= Rs. 35,526,452 / 5000 = Rs. 7,105.29