BITM Cost and Management Accounting

Write any two objective of cost accounting.

What is ABC analysis in stock control system?

Write about the relevant and irrelevant cost.

What is Rowan premium plan of wages payment system?

The difference in total cost is Rs 150,000 between the activity level of 60,000 units and 30,000 units of repairing cost. The total fixed cost is Rs 160,000.

Required:

(a) Variable cost per unit

(b) Total cost for 40,000 units

Following information are provided:

Required:

a) Economic order quantity.

b) The annual total cost of the optimum purchasing policy.

The following overheads are exacted from the company.

Other information:

Required: Total Overhead of departments A and B.

A worker has taken 150 hours to complete a job. The rate of wages per hour is Rs 40. He got a bonus is Rs 400 under the Halsey premium plan.

Required: Standard time allowed and total wages payable under the Rowan premium plan.

One unit of a production requires 80 kg of raw material @ Rs 16 per kg. The actual output was produced 280 units with actual material consumption 10,000 kg @ Rs 20 per kg.

Required: Material Price and Cost Variance

The following information is available to you:

Required:

(a) Re-order level

(b) Re-order quantity

Differentiate between direct cost and indirect cost? With example.

Differentiate between Static budget and Flexible budgets.

What are the limitations of Cost Volume Profit Analysis?

The standard labour mix and actual labour mix of product AB is shown below:

40 hours in a week needed to work and paid. Standard output per gang hour 25 units and actual output was realized 1,050 units.

Required: Calculate the Labour variances. (Rate, Mixed, Yield, Efficiency, and Cost)

The following information are provided to you:

The company is running at 100% capacity and produced 20,000 units of output with the following costs data:

Required:

(a) Flexible budget for 80% and 90% output to be attained in the next month.

(b) Profit of product, if profit is 25% on cost.

Alfa Beta manufacturing company has sufficient idle capacity therefore, it would like to see the possibility of manufacturing a component used in its final products. The company has been buying the component from an outside supplier at the rate of Rs.120 per unit. The other data have been given below:

The company has followed a system of defining its plant capacity in terms of direct labour hours. The normal capacity is 50,000 DLH. The annual budgeted fixed manufacturing overhead is Rs 400,000. One unit of output requires two direct labour hours.

Required: Differential cost analysis to decide whether the company should continue to buy the component.

A Manufacturing Company with a normal capacity of production of 350,000 units supplied the following information for the year have been given below:

Required:

a) Income Statement under Absorption Costing.

b) Reconciliation statement.

"The objectives of management accounting are far wider than that of financial accounting." Comment on this statement.

"The main objective of inventory management is to supply all kind of inventory regularly in such a manager that there is no shortage of materials and production may not have to be stopped", discuss.

Following is the information about the Bisal Hotel in Kathmandu:

• Total number of single rooms = 50 (100% for 2 months and 60% for 10 months)
• Total number of double rooms = 40 (60% for 4 months and 50% for 8 months)

Annual expenses and other information are given below:

• Room attendants staff salary = Rs 50,000 per month.
• Administrative 3 staff salary = Rs 30,000 per month per staff.
• Laundry and Other staff 2 salary = Rs 20,000 per month per staff.
• Electricity charge = Rs 120,000 per year.
• Communication and telephone = Rs 12,000 per month
• Repair charge = Rs 40,000 per year.
• Insurance premium = Rs 120,000 per year.
• Depreciation on furniture = 25% of Rs 500,000.
• Depreciation on building = 5 % of 9,000,000.
• Miscellaneous expenses = Rs 120,000 per year.
• Profit 25% on the cost of sales.

Assumed that the double bad room shall be regarded as 1.50 of the single room for the fixing the rate of the room.

Required:

(a) Statement of operating cost

(b) Room charge for single and double rooms per day.

A manufacturing company record has the following trading results for two periods.

Required:

a. Contribution margin per unit and contribution margin ratio

b. Fixed cost

c. Break-even point in units and Rs.

d. Margin of safety ratio

e. Sales in Rs. to earn a desired profit after tax of Rs 120,000 of the tax rate is 40%.

f. Required sales in Rs. if desired Profit Rs 200,000.

g. How many units must be sold to earn profit 10% on sales?

The Monaj manufacturing company is planning to prepare the functional budget for the decision purpose from the following information:

Total sales for 7 months are 200,000 units. Selling price per unit of Rs 60.

Other detailed information is given below:

Purchase: One unit of finished goods required 2 kg of raw material at the cost of Rs 10 per kg.

Wages: Per unit of finished goods will need 3 labour hours and the cost per labour hour will be Rs 2.

Overhead: Variable manufacturing overhead will be Rs 5 per unit of production and fixed manufacturing cost Rs 120,000 per year. Administrative expenses 5% of sales and selling expense @ Rs 2 Per unit sold.

Inventory management policy:

Raw materials are required to meet of the next month's consumption of material and finished goods are 80% of the following month's sales units.

Required:

Following the four-month Budget from Baishak to Shrawan:

a. Sales Budget

b. Production budget

c. Material consumptions and purchase budget

d. Labour cost budget

e. Manufacturing overhead budget

f. Operating expenses budget (Administrative expenses and selling expense)

g. Cost of goods sold budget

h. What is the operating budget? What are the main component?