FMS – Parul University

Semester. II
Cost and Management Accounting
Total Marks: 50

This is an individual basis hand written assignment. Please submit it by 30th March 2020.

Instructions:
All questions are compulsory
Each question carries 10 Marks

1. The following Direct costs were incurred for Job No. 15 of a factory.

Materials – Rs. 6010

Labour Variable Overhead

Dept A - 60 Hours @ Rs. 30 per hr Dept A- Rs. 15000 for 1500 Labour hrs
Dept B - 40 Hours @ Rs. 20 per hr Dept B- Rs. 4000 for 200 Labour hrs
Dept C- 20 Hours @ Rs. 50 per hr Dept C- Rs. 12000 for 300 Labour hrs

Fixed Overheads are estimated at Rs. 40000 for 2000 hours. You are required to calculate the cost of the Job and the
price to be quoted which would give a profit of 20% on selling price.

2. A company follows Process Costing and Manufactures a product in one process. The work in progress at the
end of each month and is valued according to FIFO method. At the beginning of the month April 2015, the
inventory of WIP showed 400 units, 40% completed, valued as follow:

Material 3600
Labour 3400
Overheads 1000
In the month of April material of Rs. 68500 was purchased, wages and overheads amounted to Rs. 79800 and 21280
respectively. Finished production taken in to stock in the month was 2500 units. There was no loss in the process.

At the end of the month the work in progress inventory was 500 units, 80% completed as regards material and 60%
completed as regards Labour and overhead.

You are required to compute equivalent production and prepare a process Account.

3. A shoe company manufactures two types of shoes X & Y. the production costs for the year ended 31 st March
2014 were:

Particulars Amount
Direct Materials 1500000
Direct Wages 840000
Production Overheads 360000
Total 2700000
There was no WIP at the beginning or at the end of the year. It is ascertained that:

a) Direct material in type X shoe consist twice as much that in Y,

b) The direct wages for type Y shoe was 60% of those of type X shoe,
c) Production overhead was same for Pair X & Y,
d) Administrative overhead for each type was 150% of direct wages.
e) Selling cost was Rs. 1.5 per pair,
f) Selling price: X – 44 & Y – 28 Rs per pair,
 g) Production during the year:
 Type X – 40000 pairs out of which 36000 were sold,
 Type Y – 120000 pairs out of which 100000 were sold.

Prepare a Statement showing Cost & profit.

4. A chemical Company supplies you the following details from the cost records:

Particulars Amount
Stock of Raw Materials on 1st September 2014 188,000
th
Stock of Raw Materials on 30 September 2014 200,000
Material Purchased 832000
Direct Wages 238400
Indirect Wages 16000
Salaries 40000
Freight – Inward 32000
Freight – Outward 20000
Sales 1579800
Cash discount allowed 14000
Bad debts written off 18800
Repairs of Plant 42400
Rent- Factory 12000
Rent – Office 6400
Travelling expense 12400
Salesman Commission 33600
Depreciation – plant 28900
Depreciation – furniture 2400
Director’s fee 24000
Electricity 48000
Fuel 64000
Sale of scrap 500
General charges 24800
Manager’s salary 48000
Prepare a Cost Sheet giving maximum possible break up of cost and profit.

5. The following particular relate to a new machine purchased:

Purchased price of machine Rs. 400,000
Installation expenses Rs. 100,000
Rent per quarter Rs. 15000
General lighting for the total area Rs. 1000 p.m
Foremen salary Rs. 30,000 p.a.
Insurance premium for the machine RS. 3000 p.a.
Estimated repairs for the machines Rs. 5000 p.a.
Estimated consumable stores Rs. 4000 p.a.
Power – 2 units per hour at Rs. 50 per 100 Units
Estimated life of the machine is 10 years and the estimated value at the end of the 10 year is Rs. 100,000. The machine
is expected to run 20000 hours in its life time. The machine occupies 25% of the total area. The foreman devotes 1/6
of his time for the machine. Calculate the machine hour rate for the machine.