Cost and Management Accounting

Write any two objectives of cost accounting.

Define semi-variable cost with suitable examples.

Write in brief about ABC analysis in stock control system.

Point out the causes of labour turnover.

Write any two differences between allocation and apportionment of overhead.

Following information are given:

- Carrying cost per unit Rs. 0.5

- Ordering cost per order Rs. 40

- EOQ 1,000 units

Required: Annual requirement.

A Company's cost structure of two different level of output is given below:

Total cost : (Rs) 40,000 60,000Output (units) 2,000 4,000

Required: Total cost for 3,000 units.

A manufacturing company provide you the following information :

Standard time allowed ………150 hours

Time Saved by a worker ………20 hours

Wage rate per hour ………Rs. 30

Required: Total earning of a worker under Rowan Premium Plan

Following information are supplied to you :

Consumption per day ......30,000 to 50,000 units

Re-order period ......3 to 5 days

Maximum stock level ......3,00,000 units

Required: Re-order quantity

Following particulars are provided :

Cost of selection ...... Rs.25,000

Training cost ......Rs.20,000

Cost of welfare services ......Rs.22,500

Loss due to inefficiency of new workers ...Rs. 20,000

Average no. of workers ......100

No. of workers replaced ......200

Required: Replacement cost per replacement

The profit and total cost of a company during two years were as follows:

A company had the following relevant information:

Direct material per unit Rs. 8

Direct labour per unit Rs. 4

Variable manufacturing cost per unit Rs. 5

Variable selling expenses : 5% of sales

Selling price per unit : Rs. 30

Fixed manufacturing OH per unit : Rs. 5

Fixed administrative and selling expenses Rs. 72,000

Normal capacity : 30,000 units

Required: 

a.-Income statement under absorption costing system for year 2077 

b.-Profit From variable costing system . 

Following are the particulars of an industry manufacturing two products A and B :

 The overhead cost and cost drivers are as follows:

       Required: Cost per unit under Conventional method using MH and Activity Based Costing  [10 ]

(a) Harati Yatayat Sewa provides the following information to you:

Cost of bus ...... Rs. 660,000Scrap value after 10 years ...... Rs. 60,000Drivers Salary ...... Rs. 20,000 per monthHelper's Salary ...... Rs. 10,000 per monthInsurance and Taxes ...... Rs. 360,000 per annumOther administrative expenses ...... Rs. 240,000per annumDiesel and other lubricating oil ......Rs. 20 per kmThe bus will run 25 days in a month with 6 round trips of 15Km a day.**Required**: Operating cost statement showing standing and running charges [5](b) Give the meaning of joint product, main product and by product with examples. [5]

(a) A trading company has presented the following information:

The gross profit margin on sales will be 40%. The merchandize inventory will be equal to meet next months sales need. The operating expenses and selling expenses will be 10% and 20% of sales revenue respectively including depreciation 10,000 per month.

**Required**:

• Merchandize purchase budget for 1st three months ending March

• Operating and selling expenses budget for 1st three months ending March [3+2=5];

(b) What is standard costing? Explain any two difference between standard cost and estimated cost. [5]

Define management accounting. Explain the reasons for gaining popularity by management accounting in modern business world.( H ) [10]

The following details are taken from a factory

The output of process I is transferred to process II at a profit of 25% on cost price and that of process II to finished stock at a profit of 20% on transfer price. The factory sold 80% of the finished goods for Rs. 350,000.

**Required** :

   -**Process I and II account**

   - Finished stock account

  - Actual realized profit

A company adopts standard cost practices for it's direct labour cost and factory overhead cost. The activities level and cost per direct labour hour are summarized below:Activities level in DLH 20,000 40,000Direct labour cost (Rs) (Rs) (Rs)2 Skilled labour @ Rs.2.0 per hour 80,000 160,0003 Semi-skilled labour @ Rs.1.0 per hour 60,000 120,0004 Unskilled labour @ Rs. 0.5 per hour 40,000 80,000Total labour cost 180,000 360,000Factory overheads : (Rs.) (Rs.)Indirect materials 60,000 80,000Supervision cost 40,000 60,000Repairs and maintenance 60,000 100,000Rent and taxes 20,000 20,000Depreciation 40,000 40,000Normal capacity 35,000 DLHHours worked and paid 32,000 DLHHours produced 28,000 DLHActual overhead incurred Rs. 300,000Actual Wages paid :2 Skilled labour @ Rs. 2 per hour ……… Rs. 128,0002 Semi-skilled labour @ Rs. 1.5 per hour ……… Rs. 96,0005 Unskilled labour @ Rs. 0.90 per hour ……… Rs. 144,000Rs. 368,000Required :• Direct labour cost and factory overhead budget for 30,000 DLH• Analysis of variance showing direct labour efficiency, mix, rate and cost• Three overhead variances [5+5+5=15]

(a) What is job order costing? Mention its features.(b) Define Cost Reduction. How does it differ from cost control?[7+8=15]