1. a) The following is the Trial Balance of Confidence India Ltd. as on 31 st March, 2018.

You are
asked to prepare the Trading and Profit & Loss Accounting for the year ended 31 st March,
2018 and Balance Sheet as on that date:-

Dr. Cr.
Rs. Rs.
Share Capital 216,000
Stock as on 01/04/2017 93,600
Sales and Sales Return 17,200 579,200
Purchases and Purchase returns 486,200 11,600
Freight and Carriage 37,200
Rent and Taxes 11,400
Salaries and Wages 18,600
Sundry Debtors 48,000
Sundry Creditors 29,600
Bank Loan (at 12% p.a.) 40,000
Bank Interest on above 3,800
Printing and Advertisement 20,200
Income from Investments 1,000
Cash at Bank 23,000
Discount received 7,480
Misc. Income 580
Investments 10,000
Furniture and fittings 13,600
Discount allowed 5,080
General Expenses 7,820
Audit Fees 1,400
Insurance 1,200
Travelling Expenses 4,660
Postage and Telegram 1,740
Cash in hand 20,760
Fixed Deposit with SBI (at 8% p.a.) 40,000
Tax Deducted at Source. 20,000
885,460 885,460
Additional information:-
1) Closing Stock 1,57,200
2) An amount of Rs. 6,000 is due from Poor Performance Enterprise (included in the Sundry
Debtors), out of which only Rs. 2,000 could be recovered.
3) The effect of advertisement being not yet expired, a quarter of the amount of “Printing and
advertisement” is to be carried forward to the next year.
4) Create a provision for Bad and Doubtful Debts at 3%.
5) Depreciation of 10% is to be written off Furniture and Fittings.
6) Salaries of Rs. 4,000 are outstanding as on 31.03.2018. An amount of Rs. 500 was wrongly
included in the wages which is actually spent for repairs of a furniture item.
 7) Insurance was paid in advance upto 31.03.2019.
8) Furniture which stood at Rs. 1,200 in the books on 01.04.2017, disposed of for Rs. 580 on
01.04.2017. The amount of the sale proceed was wrongly included in the “Misc. Income”
and nothing was passed in the “Furniture and Fittings” account.
9) Assume that there were no change in the credit balance of Bank Loan and debit balance of
Fixed Deposit during the year.

2.The directors of Sunshine India Ltd ask you to prepare the Profit and Loss Account for the year
ended 31st March 2008 and the Balance Sheet as on that date. The balances in the books after
closing the Trading Account are as below:
Dr. Cr.
Rs. Rs.
Equity Share Capital (authorised and subscribed in shares of Rs. 100 each) 400,000
8% preference Share Capital (authorised and subscribed in shares of Rs. 100 200,000
each)
Plant at Cost 300,000
Land & Building at Cost 500,000
Depreciation upto 31-03-2007:
On Plant 100,000
On Land & Buildings 150,000
Dividend Equalisation Reserve 10,000
Investment in Shares 200,000
Stock 70,000
Cash at Bank 60,000
Debtors 50,000
Profit & Loss Account 1-4-2007 25,000
Creditors 30,000
Establishment Expenses 15,000
Rent & Taxes 6,000
Audit Fee (including Rs. 1,000 paid for other services) 2,500
Managing Director's minimum remuneration 12,000
Director's Fees 2,000
Sundry Expenses 6,000
Interest (Net of TDS of Rs. 2,200) 7,800
Miscellaneous Receipts 2,300
Trading Account Balance 304,400
Income-tax for previous year not provided for 6,000
 1,231,700 1,231,700

You ascertain that:

i) Depreciation is to be charged on the written down value of:
Plant @ 10%
Land & Building @ 5%.
ii) The directors propose to recommend a dividend of 15% on equity shares.
iii) Provision for taxation is to be made @ 30%
iv) The MD is entitled to 5% of the net profits subject to minimum of Rs. 12,000 p.a.
v) A sum of Rs. 15,000 is to be transferred to Dividend Equalization Reserve
vi) Ignore corporate dividend tax

3 You are required to prepare the profit & Loss Account for 2009-10 and the Balance Sheet as on
31st March 2010 from the following trail balance of XYZ Ltd.

Trail Balance of XYZ Ltd as on 31st March 2010.

Particulars Debit(Rs.) Credit(Rs.)

Cash in Hand 5,400

Cash in Bank 26,300
Accounts Receivable 1,45,000
Free hold Land 1,00,000
Building 3,20,000
Machinery 1,63,000
Office Equipment 37,000
Patents 75,000
Accounts Payable 63,000
Capital 6,20,000
Drawings 52,450
Opening Stock- Raw Material 20,100
- Work in Progress 10,400
- Finished Goods 27,100
Purchases- Raw Material 3,81,500
- Consumables 25,250
Sales 9,87,800
Return Inward 6,800
Return Outward 5,000
Wages 84,800
Fuel and Power 47,300
Carriage on -Sales 20,400
- Purchases 32,000
 Salaries- Office 65,000
- Factory 85,000
General Expenses 30,000
Insurance -Factory 4,000
-Office 2,000
Rent (office) 90,000

17,65,800 17,65,800

The following adjustments are also to be taken in to account.

1. Inventory of raw material in hand on 31st March 2010 is Rs. 21,300 work in progress is
Rs. 14,300 and finished goods Rs 32,400.

2. Machinery is to be depreciated @ 10% and Office equipment @ 15%. Patents are to be

amortized @ 20%.

3. Salaries are outstanding Rs. 10,000 for Factory and Rs. 5,000 for office.

4. Insurance includes a premium of Rs. 1,700 on a policy expiring on 30 th Sept. 2010,

relating to office.

5. Wages wrongly include Rs. 10,000 paid to the technician on 01/10/2009 for installation
of a machine.

6. Bad debts to be written off are Rs. 7,250.

7. Purchases of raw-materials include Rs. 50,000 spent for procuring packing materials.

8. Rent received in advance Rs. 10,000.

9. Charge provision for bad debts at 5% and provision for discount on debtors @ 2%.

4.a)From the following Balance Sheet and Income Statement, prepare different financial ratios
and analyze.

Balance Sheet as on 31st March, 2014 (Rs. In lacs)

Liabilities 3/31/2014 3/31/2013 Assets 3/31/2014 3/31/2013
Share Capital Fixed Assets net
Equity 120 120 Gross Block 594 594
Less:
Preference 50 50 Depreciation -365 -381
Reserve &
Surplus 215 180 Intangible Assets 15 11
 Secured Loans Investments 5 5
Debentures 50 50 Current Assets
Loans/Advances 101 100 Cash-in-Bank 73 70
Unsecured Loans 30 20 Receivables 189 185
Current Liabilities Inventories 355 351
Pre-paid
Sundry Creditors 330 340 Expenses 64 64
Provisions 69 69 Misc. Exp/Losses 35 30
Total Liabilities 965 929 Total Assets 965 929

Income Statement for the year ended 31st March, 2014

3/31/2014 3/31/2014 3/31/2013
Net Sales 904 847
Cost of Goods Sold -714 -657
Stocks 366
Wages & Salaries 188
Other Manufacturing Expenses 160
Gross Profit 190 190
Operating Expenses -96 -103
Selling & Admin Expenses 71
Depreciation 25
Operating Profit 94 87
Non-operating Profit 49 11
Profit Before Interest & Tax (EBIT) 143 98
Interest -33 -26
on Bank Borrowings/Loans 29
On Debentures 4
Profit Before Tax 110 72
Tax -58 -36
Profit After Tax 52 36
Dividends -17 -12
Equity 14
Preference 3
Retained Earnings (Reserve & Surplus) 35 24

4. b)Prepare a Dupoint Analysis Statement and analyze.

Company A
Revenue 1,300.00
 EBT 112.65
EBIT 121.88
Interest Expenses 9.23 112.65
Income Tax 41.66
Net Income 70.99 112.65
Total Assets 737.05
Share-holders Equity 449.09

5. Prepare a Cash Flow Statement from CHICO Company’s Balance Sheet and Income
Statement.

CHICO COMPANY
Balance Sheets
($000 Omitted)
Assets
As of December 31
2012 2011
Current Assets
Cash $ 20 $7
Accounts Receivable ...................................................................... 40 42
Inventory ......................................................................................... 60 56
Prepaid Expenses ............................................................................ 20 20
Total Current Assets ................................................................... 140 125
Noncurrent Assets
Land ................................................................................................ $ 30 $ 30
PPE, at cost .............................................................................. $120 $108
Less Accumulated Depreciation ................................................ 7064
Goodwill and Patents ...................................................................... 10 10
Total Assets ................................................................................ 230 209
Liabilities and Equity
Current Liabilities
Accounts Payable ............................................................................ $ 30 $ 28
Accrued Wages ............................................................................... 10 11
Income Taxes Payable .................................................................... 20 20
Total Current Liabilities .............................................................. 60 59
Noncurrent Liabilities
Mortgage Bonds Payable ................................................................ $ 40 $ 34
Total Liabilities ........................................................................... 100 93
Shareholder Equity
Paid-in Capital (4,800 shares outstanding) ...................................... $ 60 $ 60
Retained Earnings ........................................................................... $ 70 $56
Total Shareholder Equity ............................................................. 130 116
Total Liabilities and Equity ......................................................... 230 209
Income Statement, 2012
($000 Omitted)
Percentage
 Sales Revenue .............................................................. $400 100.0
Less Cost of Sales ................................................... -260 65.0
Gross Margin ............................................................... 140 35.0
Less Depreciation Expense ..................................... -6 1.5
Other Expenses ........................................................ -84 21.0
Earnings before Interest and Taxes ............................. 50 12.50
Interest Expense ...................................................... -5 1.25
Earnings before Income Tax ....................................... 45 11.25
Provision for Income Taxes ................................... -15 3.75
Net Income ................................................................... 30 7.50
Less Dividends ...................................................... .. -16 4.00
Addition to Equity ....................................................... 14 3.50

6. The following is the final accounts of Maxwell India Ltd. for the year ended 31st March, 2014:
Profit & Loss Account for the year ended 31st March, 2014
Rs. In
lakhs
Sales 149.72
Interest on Investments 0.28
150.00
Raw-materials (59.31)
Sundry operating expenses (53.00)
Interest on debentures (1.80)
Loss on sales of investments (0.10)
Depreciation on plant and machinery (8.25)
Depreciation on furniture and fittings (1.50)
Cost of issue of debentures (0.08)
Net Profit before tax 25.96
Provision for income tax 7.79
Net profit after tax 18.17
Balance b/d as on 01/04/13 1.05
19.22
Appropriations:
Preference dividend paid (0.70)
Capital redemption reserve (3.00)
Debenture redemption reserve (1.50)
General reserve (1.25)
Proposed dividends and dividend tax thereon (6.16)
Balance c/d 6.61

Balance Sheet as at 31st March, 2014

As on As on
31/03/2014 31/03/2013
Rs. in lakhs Rs. in lakhs
Liabilities
Equity Share Capital 42.00 35.00
 14% Preference share capital - 10.00
Capital redemption reserve 3.00 -
Securities premium 1.40 -
Debenture redemption reserve 7.50 6.00
General reserve 23.35 22.10
Profit & loss account 6.61 1.05
12% Debentures 15.00 15.00
Sundry creditors for goods 8.57 7.92
Sundry creditors for expenses 5.40 4.90
Provision for income tax 7.79 12.00
Proposed dividend and dividend tax 6.16 6.65
126.78 120.62
Assets
Plant and machinery 51.75 50.00
Furniture & fittings 13.50 15.00
Investments - 5.00
Stock 28.14 22.75
Debtors 16.04 13.76
Advance income tax 7.80 12.00
Cash in hand & at bank 9.55 2.03
Cost of issue of debentures - 0.08
126.78 120.62
Additional information:
1) During the year, all the preference shares were redeemed at par. For this purpose, fully
paid equity shares of the nominal value of Rs. 7 lakh were issued at a premium of 20% to
the existing equity to the existing share-holders on right basis. At the time of redemption
of preference shares, preference dividend for six months till 30th September, 2013 was
also paid.
2) Proposed dividend for the year 2012-13 and dividend tax thereon were paid in July, 2013.
3) Income-tax liability for the accounting year 2012-13 was settled at Rs. 12.00 lakh.
4) New machinery was acquired by the company on 1st October, 2013 (15%).

Prepare Cash Flow Statement for the year ended 31st March, 2014 using the indirect method.

7. Following are the Balance Sheets of Dedication Wanted Ltd for the year 2007 and 2008.
(Rs. in '000)
200 200 200 200
Liabilities 7 8 Assets 7 8
Equity Share Capital 200 320 Goodwill 100 80
8% Redeemable Preference
Shares 150 90 Land & Building 200 170
 General Reserve 40 - Plant & Machinery 80 200
Capital Redemption Reserve 70
Profit & Loss Account 30 48Sundry Debtors 150 250
10% Debentures 100 90Inventories 87 59
Sundry Creditors 55 83Bills Receivable 20 30
Bills Payable 20 16Cash & Bank 25 18
Preliminary
Proposed Dividend 42 50 Expenses 15 10
Provision for Tax 40 50
677 817 677 817

Additional Information:
i) An interim dividend of Rs. 20,000 has been paid in 2008
ii) Debentures and Preference Shares were redeemed at the end of the year 2008.
Redeemable Preference Shares were redeemed at a premium of 5%. Premium
was paid of P/L account. Before redemption interest was paid on debentures. CRR
was created out of General Reserve and Profit and Loss account
iii) During the year assets of another company were purchased for a consideration of
Rs. 40,000 payable in shares. The assets purchased were:
Stock Rs. 20,000, Machinery Rs. 20,000.
iv) A part of the plant was sold for Rs. 20,000 (W.D.V. Rs. 25,000). Depreciation for the
year 2008 on Plant & Machinery Rs. 20,000 was provided.
v) Depreciate Land and Building by Rs. 10,000. Land costing Rs. 20,000 was sold for
Rs. 50,000.
vi) Bonus Shares of Rs. 10,000 were issued to the existing shareholders during the year.

Prepare a Cash Flow Statement for the year 2008.

8. Following information is extracted from the books of Moonlight India Ltd.

Sales 20,000 units
Direct Material Rs. 200,000
Direct Wages Rs. 200,000
Direct Expenses Rs. 80,000
Factory Overheads (15% variable) Rs. 400,000
Office and Administrative Overhead (80% fixed) Rs. 400,000
Selling & Distribution Expenses (75% fixed) Rs. 400,000
Commission to Dealer 4%
Tax Rate 40%

Required: Calculate the selling price in each of the following alternative cases:
Case A.: It is decided to earn an overall profit after tax of Rs. 144,000.
Case B. It is decided to earn an overall profit after tax @ 7.2% on sales
Case C. It is decided to earn 20% return on Capital Employed (Capital Employed = Fixed
Assets of Rs. 320,000 + Working Capital which is 20% on sales).
Case D. It is decided to earn profit after tax @ 10% on total cost.

9. Global Presence Ltd. provides the following information:

2011-12 2012-13
Total Sales 850,000 1,220,000
Total Cost 520,000 668,000
Required:
i) By what percentage must sales value be increased to offset 10% reduction in selling price
to maintain the same amount of contribution in the current year.
ii) By what percentage must selling price be increased to offset 25% increase in variable
cost so as to maintain the same amount of contribution
iii) By what percentage must selling price be increased to offset 25% increase in variable
cost so as to maintain the same P/V ratio
iv) By what percentage variable cost be decreased to offset 10% reduction in selling price to
maintain the same amount of contribution
v) By what percentage variable cost be decreased to offset 20% reduction in selling price to
maintain the same P/V ratio

10.Matrix India Ltd. can produce three products from the same raw material using the same
production facilities. The relevant details are as follows:
Particulars X Y Z
Maximum Market Demand (units) 6000 4000 3000
Selling Price per unit (Rs.) 125 100 200
Raw-materials as % of Sales Value 80% 60% 75%
Labour Cost per unit 12 20 6
Overhead Rate is Rs. 5 per hour of which 60% is fixed. Maximum Raw Material available:
100,000 kg @ Rs. 10 per kg. Maximum Production hours available: 18,400 @Rs. 8 per hour.
Required:
a) Find out the Product Mix to yield maximum profit and determine the Profit at the
selected Product Mix.
b) Assume, in above situation 1500 hours of overtime working is possible and additional
7000 kg of raw-material is available at 5% extra rate. It will result in additional fixed
overheads of Rs. 1,000, 50% increase in labour rates and 20% increase in variable
overheads. Do you recommend the overtime working?

11A. Far Point Spread is a top-selling electronic spreadsheet product. Far point
Technologies India is about to release Version 5.0. It divides its customers into two groups:
new customers and upgrade customers (those who previously purchased Far Point Spread 4.0
earlier versions). Although the same physical product is provided to each customer group,
sizable differences exist in selling prices and variable marketing costs:
Particulars New Customers Upgrade Customers
S.P. Rs. 10500 Rs. 6000
V.C.:
Manufacturing Rs. 1250 Rs. 1250
Marketing Rs. 3250 Rs. 4500 Rs. 750 Rs. 2000
Contribution Rs. 6000 Rs. 4000

The fixed costs of Far point Spread 5.0 are Rs. 1.4 crores. The planned sales mix in units is 60%
new customers and 40% upgrade customers.
Required:
1. What is the Far Point Spread’s BEP in units, assuming the planned sales mix is
attained.(1077 units sold to upgrade customers and 1615 units sold to new customers)
2. If the sales mix is attained, what the operating income when 20,000 units are sold? (Rs. 9
crores)
3. Show the BEP in units changes with the following customer mixes:
a) New 50% and upgrade 50%(2800 units)
b) New 90% and upgrade 10%(2414 units)
c) Comment on the results.

11 B. The existing cost structure of ‘Product Z’ of a company is as follows:

Sale Price Rs. 15,000 per unit.
Direct Materials 45% of the Total Cost
Direct Labor 25% of the Total Cost
Fixed Overhead 30% of the Total Cost.
Due to anticipated increase in the existing material price by 20% and in the existing labor
rate by 24%, the existing profit would come down by 15% if the selling price remains
unchanged. A tender for the supply of above item is to be placed.

Required:
a) Determine the present and future Total Cost and Profit per unit.
b) Suggest the tender price per unit (taking into account upward movementof costs)
so that (i) the same percentage of Profit on Cost as at the present is earned and (ii)
the same amount of Profit as at present is earned.

(a. Present Total Cost= Rs.7,500)

12. Ranbaxy Ltd manufactures pharmaceutical products that are sold through a network of
sales agents. The agents are paid a commission of 18% of revenues. The income statement for
the current year ending on March, 31 is as follows:
Ranbaxy Ltd
Income Statement
For the Current Year Ended on March, 31
 Rs. Rs.
Revenues 26000000
COGS:
Variable 11700000
Fixed 2870000 14570000
Gross Margin 11430000
Marketing Costs:
Commissions 4680000
Fixed Costs 3420000 8100000
Operating Income 3330000

Ranbaxy is considering hiring its own sales staff to replace the network of sales agents. Ranbaxy
would pay its sales people a commission of 10% of revenues and incur extra fixed costs of Rs.
20,80,000.
Required:
1. Calculate Ranbaxy Ltd’s BEP in revenues for the current year.
2. Calculate Ranbaxy Ltd’s BEP in revenues for the current year if the company had hired
its own sales force in the current year to replace the network of sales agents.
3. If Ranbaxy had hired its own staff and increased the commission paid to them to 15%,
keeping all other cost behavior pattern the same, how much revenue would Ranbaxy have
to generate to earn the same operating income as in the current year?

13. A company has margin of safety at 20% and earns a profit of Rs. 4 lakhs. If its contribution
to sales ratio is 0.4, calculate its current sales and fixed costs.

14. The following figures relate to a company manufacturing a varied range of products:
Particulars Total Sales Total Cost
Year ended 31/03/10 22,23,000 19,83,600
Year ended 31/03/11 24,51,000 21,43,200
Assuming stability in price, with variable costs carefully controlled to reflect predetermined
relationships, and an unvarying fixed costs, calculate: a) The profit/volume ratio, b) Fixed Costs
c) BEP, d) MOS for the year 2009-10 and year 2010-11.

15. Two manufacturing companies which have the following operating details decide to merge:
Rs. in lakhs
Company X Company Y
Capacity utilization 90% 60%
Total Sales 540 300
Variable Costs 396 225
Fixed Costs 80 50
Assuming that the proposal is implemented, calculate: i) BES of the merged plant and the
capacity utilization at that stage., ii) Profitability of the merged plant at 80% capacity utilization
iii) Sales turnover of the merged plant to earn a profit of Rs. 75 lakhs iv) When the merged plant
is working at previous capacity to earn a profit of Rs. 75 lakhs what percentage in increase in
selling price is required to sustain an increase of 5% in fixed overheads.(Ans.: Rs. 501.76 L,
45.61%, 11.14%, 791.23 L, 0.82%)

16. Annual sales of Product M are normally distributed with a mean of 2,000 units and a
standard deviation of 400 units. M has a selling price of Rs. 80 with a variable cost of Rs. 50.
Budgeted fixed costs are Rs. 30,000.
a) Determine the BEQ and probability of loss. (.0062)
b) What is the expected profit? (30000)
c) Determine the probability of loss greater than Rs. 5,000. (.0018)
d) Calculate a 95% confidence level for the expected profit and comment on the viability of this
product for the company. (6480 to 53520)

17. Two firms ABC Ltd. And XYZ ltd. Sell the same type of products in the same market.
Their budgeted PL A/C for the year ending 31st March, 2010 are as follows:
Rs. ABC Ltd. Rs. XYZ Ltd.
Sales 5,00,000 6,00,000
VC 4,00,000 4,00,000
Fixed Costs 30,000 4,30,000 70,000 4,70,000
Net Profit 70,000 1,30,000

Required: 1) Calculate at which sales volume both the firms will earn equal profit. 2) State which
firm is likely to earn greater profits in condition of i) heavy demand for the product ii) low
demand for the product. Give reasons. (Ans.:Rs. 3,00,000……).

18. The product mix of a company is under:

Particulars Products
A B
Units 36000 12000
S.P./unit Rs. 5 Rs. 10
V.C./unit Rs. 4 Rs. 3
Fixed Costs Rs. 30,000.
You are required to calculate the BEP in units.
Find the shift in the BEP in units, if the company discontinues product A and substitutes product
C in its place. The quantity of product C is 6000 units and its S.P. and variables costs
respectively are Rs. 12 and Rs. 6. (A= 9000 units, B= 3000 units, C = 1,500 units)

19. Unique Products Co. Ltd. owns two factories, one at Delhi and other at Noida. Both
factories produce and sell same selling price of Rs. 200 per unit. The following are the other cost
details:
Delhi Plant Noida Plant
Capacity Operated 75% 83-1/3%
Actual Sales Rs. 30 Lacs Rs. 50 lacs
Total Fixed Cost Rs. 15 Lacs Rs. 8.1 Lacs
Depreciation Rs. 3 Lacs Rs. 2.1 Lacs
Profit/(Loss) (Rs. 3 Lacs) Rs. 1.90 Lacs
 a) Calculate BEP for each plant
b) Calculate Cash BEP for each plant
c) Calculate Cost Indifference Point
d) In case total output is to be increased by 7000 units, how much output should be
increased from which plant and why?
e) In case total output is to be curtailed by 7000 units, from which plant should it be
curtailed and why?
f) Determine combined BEP for the company as a whole adopting each of the following
three approaches:
i) Constant Sales-Mix in the ratio of capacities of plants
ii) Variable Sales-Mix producing from more profitable plant first
iii) Using actual sales ration as the basis.

20. A small scale manufacturer produces an article at the operated capacity of 10,000 units
while the normal capacity of his plant is 14,000 units. Working at a profit margin of 20% on
sales realization, he has formulated his budget under:
10,000 units 14,000 units
Sales Realization Rs. 2,00,000 Rs. 2,80,000
Variable overheads 50,000 70,000
Semi-variable overheads 20,000 22,000
Fixed overheads 40,000 40,000
He gets an order for a quantity equivalent to 20% of the operated capacity and even on this
additional production, profit margin is desired at the same percentage on sales realization as for
production to operated capacity.
Assuming prime cost is constant per unit of production, what should be the minimum price to
realize this objective?

21. The costs per unit of the three products A, B and C of a company are given below:
Product A Product Product
(Rs.) B (Rs.) C (Rs.)
Direct Materials 20 16 18
Direct Labour 12 14 12
Variable Expenses 8 10 6
Fixed Expenses 6 6 4
46 46 40
Profit 18 14 12
Selling Price 64 60 52
No. of units produced 10,000 5,000 8,000

Production arrangements are such that if one product is given up, the production of the others can be
raised by 50%. The directors propose that C should be given up because the profit from that product is the
lowest.
Required:Present a suitable analysis of the data indicating whether the proposal should be
accepted.
22.Thestandard material cost for 100 kg of Chemical D is made up of:
Chemical A 30 kgs @ Rs. 4.00 per kg
Chemical B 40 kgs @ Rs. 5.00 per kg
Chemical C 80 kgs @ Rs. 6.00 per kg

In a batch, 500 kgs of Chemical D were produced from a mix of:

Chemical A 140 kgs at a cost of Rs 588
Chemical B 220 kgs at a cost of Rs. 1,056
Chemical C 440 kgs at a cost of Rs. 2,860

How do the yield, mix and the price factors contribute to the variance in the actual cost per 100
kgs of Chemical D over the standard cost.

23.The standard cost of a certain chemical mixture is:

35% Material A at Rs. 30 per kg
65% Material B at Rs. 35
A standard loss of 5% is expected in production.
During a period there is used:
125 kg of Material A at Rs. 27 per kg and
275 kg of Material B at Rs. 34 per kg.
The actual output was 365 kgs.
Calculate:
a) Material Cost Variance
b) Material Price Variance
c) Material Mix Variance
d) Material Yield Variance.

24. Calculate all the material variances from the following information
Standard Actual
Material Qty.(Kgs.) Price (Rs.) Total (Rs.) Qty.(Kgs.) Price (Rs.) Total (Rs.)
A 40 10 400 20 35 700
B 20 20 400 10 20 200
C 20 40 800 30 30 900

25. One kg. of the product K requires two chemicals, A and B. The following are the details of
the product K for the month of June, 2012.
a) Standard mix of chemical A, 50% and chemical B, 50%
b) Standard price per kg of chemical A, Rs. 12 and chemical B, Rs. 15
c) Actual input of chemical B. 70 kgs
d) Actual price per kg of chemical A, Rs. 15
e) Standard normal loss: 10% of total input
f) Material Cost Variance, total, Rs 650 adverse
g) Material Yield variance, total Rs. 135 adverse
h) Actual output, 90 kgs.
You are required to calculate: i) MMV (total), ii) MUV (total), iii) MPV (total), iv) Actual loss
of input, v) Actual input of chemical A, and vi) Actual price per kg of chemical B.

26.A gang of workers normally consist of 30 men, 15 women, and 10 boys. They are paid
standard hourly rates as under
Men: Rs. 8
Women: Rs. 6
Boys: Rs. 4
In a normal working week of 40 hours, the gang is expected to produce 2,000 units of output.
During the week ended July 31, 2012, the gang consisted of 40 men, 10 women, and 5 boys.
Actual hourly wages paid were at the rate of Rs. 7, Rs. 6.5, and Rs.3 respectively. Four hours
were lost due to abnormal idle time and 1,600 units were produced.
Calculate: i) Labour Variance, ii) Labour Rate Variance, iii) Labour Efficiency Variance, iv)
Labour Mix Variance, and v) Labour Idle Time Varaince, vi) Labour Yield Variance.