Accounts Assignment

Q1. A critical study of past expense incurred in the manufacturing of two kind of acid containers is as
follows-

Direct Material
Direct Wages
Plant and Machine Usage
General O\Hs opportunities @200%
of Direct Wages
Cost per Container (Total)

X
3.5
1
2
2

Y
6.5
1.5
3
3

8.5

14

Direct Material
Direct Wages
Plant and Machine Usage
General O\Hs
Total

Total
10
2.5
5
5

26500
5850
16250
11700
60300

Containers produced, X=2000 units and Y=3000 units.

Prepare a consolidated cost sheet distributing the total production cost between the two types of
containers according to different elements of cost and also showing the cost per container of each
type.
Ans:
Particulars
Direct Material
Direct Wages
Plant and Machine Usage
General O\Hs

Cost Sheet as on...

Particulars
Direct Material
Direct Wages
Plant and Machine Usage
General O\Hs
Total Cost

X (2000 Units)
7000
2000
4000
4000

X (2000 Units)
7000
1800
5000
3600
17400

Y (3000 Units)
19500
4500
9000
9000

Total
26500
6500
13000
13000

Y (3000 Units)
19500
4050
11250
8100
32900

Working Note:
Direct Material:
X: 2000*3.5=7000
Y: 3000*6.5

Direct Wages:
X: (2000*5850)/6500= 1800
Y: (4500*5850)/6500= 4050
Plant and Machine Usage:
X: (4000*16250)/13000= 5000
Y: (9000*16250)/13000= 8100
General Overheads:
X: (4000*11700)/13000= 3600
Y: (9000*11700)/13000= 8100
__________________________________________________________________________________
Q2. A company manufactures a single product having a marginal cost of Rs 0.75/unit. Fixed cost=
12000. The market is such that upto 40000 units can be sold @ Rs 1.5/unit, but any additional sales
must be made at Re 1/unit. There is a planned profit of Rs 20000. How many units must be made
and sold?
Ans: Variable Cost/Material Cost= 0.75/unit
40000 units= 1.5
Contribution= FC+ Profit
Contribution= 12000+20000=32000
To earn a profit of 20000, the company has to generate 32000 contribution.
Contribution/unit= Sales/unit-Variable cost/unit
= 1.5-0.75= 0.75..................................(a)
Therefore, Material cost= Variable Cost
40000*0.75= 30000
Contribution= Sales/unit- Material cost
=1-0.75=0.25.................................................................(b)
From (a) and (b)-

Unit*0.25= 2000
2000/0.25= 8000 units
40000+8000= 48000 units

Q3. A co. Is expecting to have 35000 cash in hand on April 2012 & it requires to prepare a budget for
3 months.
Months
Feb
March
April
May
June

Sales
70000
80000
92000
100000
120000

Purchases
40000
50000
52000
60000
55000

Wages
8000
8000
9000
10000
12000

Expenses
6000
7000
7000
8000
9000

Period of credit allowed by suppliers is two months. 25% of the sales are for cash and period of
credit to customers is 1 month. Delay in payment of wages and expenses is one month. Income tax
of 20000 is to be paid in June 2012.
Ans:
Particulars
Opening Balance
Receipts
Cash Sales
Debtors
A
Payments(-)
Purchases
Wages
Expenses
Income Tax
B
Closing Balance(A-B)

April
35000

May
63000

June
91000

23000
60000
118000

25000
69000
157000

30000
75000
196000

40000
8000
7000
55000
63000

50000
9000
7000
66000
91000

52000
10000
8000
20000
90000
106000

Working Note:
Debtors:
April: 80000*75%= 60000
May: 92000*75%= 69000
June: 100000*75%= 75000

Q4.
Grade of
Workers
A
B
Total

Standard for 100 Units

Hour
Rate
3000
2000
5000

Calculate LCV, LRV and LEV.

Ans:
LCV= SC-AC
=6000-4800=1200(F)
LRV= AH(SK-AK)
A=3200*0.5=1600(F)
B=1900*(-1) =1900(A)
LEV= (SR*SH)-AH
A=2*(-200) =400(A)
B=3(2000-1900) =300(F)

2
3

Amount

Actuals for 100 Units

Hour
Rate

Amount

6000
6000
12000

3200
1900
5100

4800
7600
12400

1.5
4