THE BEACON ACADEMY

Cost accounting / Test / 07-10-2022 / 75 Marks

Q1) M/s. Vishal Manufacturing Company manufactures two types of products viz. A and B. The
information for the year ended on 31st March 2004 is as under. [08]
Products
Particulars A B
Rs. Rs.
Direct material per unit 100 120
Direct Labour per unit 60 50
Direct expenses per unit 40 80
Additional information:
(1) Factory expenses are charged at 20% of prime cost.
(2) Office expenses are charged at 25% of works cost.
(3) 2,000 units of product A were produced of which 1,500 units were sold and 5,000 units of
product B were produced of which 4,500 units were sold.
(4) Selling expenses are Rs. 15 per unit for product A and Rs. 20 per unit for product B.
(5) Company charges a profit at 20% on sales for both the products.
Prepare a cost sheet showing the cost and profit in total as well as in per unit.

Q2) KT Manufacturing company gives you the following particulars for the year 2004. Production
and sales during the year was 10,000 units. [07]
Particulars Rs.
Materials 2,50,000
Direct Wages 1,50,000
Administrative overheads (fixed) 1,00,000
Sales 12,00,000
Profit 2,50,000
Factory Overheads: -
Fixed 1,00,000
Variable 2,00,000
Selling and Distribution Overheads:-
Fixed 60,000
Variable 90,000
The company has worked to its maximum capacity of 10,000 units during 2004. The management
has decided increase production capacity to 15,000 units for the year 2005 and it is estimated
that:
(i) There will be all-round rise in all variables by 10%.
(ii) There will be increase of 20% in all fixed overheads.
(iii) There will be no need to change the selling price for the year 2005.
Prepare a statement showing total as well as unit cost and profit for 2004. Also prepare a
statement showing estimated profit for 2005 taking into considering the changes in 2005.
Q3) Anivash is an employee of RIL gets the following emoluments and benefits:
a) Basic pay Rs. 12000 p.m.
b) Dearness allowance Rs. 2500 p.m.
c) Bonus Rs. 12% of salary and Dearness Allowance
d) Other allowances Rs. 1000 p.m.
e) Employee’s contribution to P.F. 8% of salary and Dearness Allowance.
‘X’ works for 3000 hours per annum, out of which 600 hours are non-productive and treated as
normal idle time. You are required to find out the effective hourly cost of employee ‘X’. [07]

Q4) From the following information, calculate Labour turnover rate and Labour flux rate.
No. of workers as on 01-01-2021 = 15200
No. of workers as on 31-12-2021 = 16800.
During the year, 160 workers left while 640 workers were discharged 3000 workers were
recruited during the year of these, 500 workers were recruited because of exists and the rest
were recruited in accordance with expansion plans. [08]

Q5) Calculate normal overtime and total wages payable to a worker from the particulars given
below: [07]
Days Hours Worked
Monday 10
Tuesday 9
Wednesday 8
Thursday 12
Friday 9
Saturday 4
Normal Working hours = 8 per day
Normal rate = Rs. 50 per day
Overtime rate = Up to 9 hours per day-single rate; beyond 9 Hours a day-double rate.

Q6) The complete Gardener is deciding on the on the economic order quantity for two brands of
lawn fertilizers: Super Grow and Nature’s Own. The following information is collected.
Fertilizer
Particulars
Super Grow Nature’s Own
Annual Demand 2000 Bags 1280 Bags
Relevant ordering cost per purchase order `1200 `1400
Annual relevant carrying cost `480 `650
Required:
i. Compute EOQ for Super Grow and Nature’s Own.
ii. For the EOQ what is the sum of the total annual relevant ordering cost and total annual
relevant carrying cost for Super Grow and Nature’s Own?
iii. For the EOQ, compute the number of deliveries per year for Super Grow and Nature’s
Own. [08]
Q7) The purchase department of your organization has received an offer of quantity discounts
on its order of materials as under.
Price per Tonne Tonnes
1400 Less than 500
1380 500 and less than 1000
1360 1000 and less than 2000
1340 2000 and less than 3000
1320 3000 and above
The annual requirement of the material is 5000 tonnes. The delivery cost per order is ` 1200
and the annual stock holding cost is estimated at 20 per cent of the average inventory.
The purchase department wants you to consider the following purchase option and advise which
among them will be the most economical ordering quantity, presenting the relevant information in
the tabular form.
The purchase quantity options to be considered are 400 tonnes, 500 tonnes, 1000 tonnes, 2000
tonnes and 3000 tonnes. [15]

Q8) The following are the details of receipts and issues of a material of stores in a manufacturing
company. The company has the stock of 2000 units @ Rs. 7 per kg. on 1st April, 2018
Receipts:
Date Quantity (kg) Rate (kg)

April 10 1,600 5.00

Issues:
Date Quantity (kg)

April 14 1,100
April 24 1,600
May 10 1,500
May 26 1,700
June 15 1,500
June 25 1,200

Prepare stock Ledger as per FIFO and Weighted Average. [15]