BBS Cost and Management Accounting

State any two importance of cost accounting.

Define direct cost with suitable examples?

Write any two motives of holding inventory.

Write any two causes of labour turnover.

What do you mean by service costing?

Following information is given :

Annual requirement: 3600 units @ Rs. 20 each
Carrying cost: 10 % of inventory value
Cost of placing an order: Rs. 400
Required: Number of order of EOQ.

Difference in total cost is Rs. 100,000 between 40,000 units and 20,000 units. The total fixed cost is Rs. 200,000. Required : Total cost for 30,000 units.

The following data are given to you:

• Standard output = 1,000 units

• Actual output = 1,200 units

• Normal price rate = Rs. 20

Required: Total wages under Taylor's differential piece rate system.

Following information are supplied to you :

Consumption per day: 800 - 1200 units
Re-order period: 3 - 5 days
Maximum stock level: 6000 units
Required: Re-order quantity.

Following particular are provided :

Cost of selection: Rs. 25,000

Training cost: Rs. 20,000

Cost of welfare services: Rs. 22,000

Pension scheme: Rs. 15,000

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

Average no. of workers: 1000

No. of workers replaced: 200

Required: Preventive cost per employee.

(a) What is job order costing? Explain the importance of job order costing. 

(b) Following are the particulars of an industry manufacturing two products X and Y . 

The overhead cost and cost drivers are as follows:

Required: Cost per unit under Activity Based Costing method.

(a) Explain the characteristics of joint product and by-product. 

(b) The following information are given:

Standard loss is 10% and actual output is 280 kg.
Required: Material variances.

A manufacturing company with normal capacity of 30,000 units provides the following particulars:

Productions units:           25,000

Sales units:                   26,000

Closing stock units:      4,000

Direct material per unit:     Rs. 6

Direct labour per unit:    Rs. 4

Variable manufacturing cost per unit:   Rs. 5

Variable selling expenses per unit:    Rs. 2

Selling price per unit: Rs. 30

Fixed manufacturing OH per unit: Rs. 5

Fixed administrative and selling expenses: Rs. 72,000

Required:

 a. Income statement under absorption costing system.

b. Reconciled profit under variable costing system.

The sales revenue and total cost of a manufacturing company for two years were as follows:

Required:

a. Profit volume ratio

b. Fixed cost

c. Break-even point in Rs.

d. Break-even point in units if selling price per unit is Rs. 10

e. Sales to earn desired profit after tax of Rs. 75,000 if tax rate is 25%

f. Profit when sales are Rs. 80,000

g. Margin of safety if profit is Rs. 125,000

"Budget is an important tool for the development of organizations." Explain.

Define management accounting. Explain the importance of management accounting in the modern business world.

The following is a summary of the entries in a contract ledger as on \( 31^{\text{st}} \) Chaitra 2081.

The additional information are as follows:
i. 5% of the value of work certified still remained to be certified.
ii. Material returned to store Rs. 8,000.

iii. Material costing Rs. 15,000 sold at a profit of Rs. 1,000. iv. Depreciation on plant @ 15 % p.a. v. Material at site Rs. 10,000 vi. Cash received from contractor Rs. 540,000 being 90% of work certified. vii. Contract price Rs. 900,000.

Required:

a. Contract account

b. Contractee's account

c. Work in progress account

d. Balance sheet

The following details are given to you:

Required: a. Process accounts b. Normal loss account c. Abnormal gain account d. Abnormal loss account

"Cost reduction is the accomplishment of a permanent and real reduction in per unit cost of goods without compromising the value it is intended to deliver." Comment. And also differentiate between cost reduction and cost control.