Q1Material cost calculation with GST and ancillary expenses
0 marks easy
Sky & Co., an unregistered supplier under GST, purchased material from Vye Ltd. which is registered under GST. The following information is available for one lot of 5,000 units of material purchased: Listed price of one lot ` 2,50,000; Trade discount @ 10% on listed price; CGST and SGST (Credit Not available) 12% (6% CGST + 6% SGST); Cash discount @ 10% (Will be given only if payment is made within 30 days.); Toll Tax paid ` 5,000; Freight and Insurance ` 17,000; Demurrage paid to transporter ` 5,000; Commission and brokerage on purchases ` 10,000; Amount deposited for returnable containers ` 30,000; Amount of refund on returning the container ` 20,000; Other Expenses @ 2% of total cost; 20% of material shortage is due to normal reasons. The payment to the supplier was made within 21 days of the purchases. You are required to CALCULATE cost per unit of material purchased by Sky & Co.
Q2Wage calculation with overtime and dearness allowance
0 marks easy
A total of 108 labour hours have been put in a particular job card for repair work engaging a semi-skilled and skilled labour (Mr. Deep and Mr. Sam respectively). The hours devoted by both the workers individually on daily basis for this particular job are given below: Monday 10.5, Tuesday 8.0, Wednesday 10.5, Thursday 9.5, Friday 10.5. The skilled labour also worked on Saturday for 10 hours. Sunday is a weekly holiday and each worker has to work for 8 hours on all week days and 5 hours on Saturdays; the workers are however paid full wages for Saturday (8 hours for 5 hours worked). Semi-skilled and skilled worker is paid ordinary wage @ ` 400 and ` 600 respectively per day of 8 hours labour. Further, the workers are also paid dearness allowance @ 20%. Extra hours worked over and above 8 hours are also paid at ordinary wage rate however, overtime premium of 100% of ordinary wage rate is paid if a worker works for more than 9 hours in a day AND 48 hours in a week. You are required to COMPUTE the wages payable to Mr. Deep (Semi-skilled) and Mr. Sam (Skilled).
Q3Overhead apportionment and service department redistribution
0 marks easy
Pretz Ltd. is a manufacturing company having two production departments, 'A' & 'B' and two service departments 'X' & 'Y'. The following is the budget for March, 2022 with detailed information on Direct material, Direct wages, Factory rent, Power (Machine), Depreciation, General Lighting, and Perquisites for all departments; and apportionment bases including Area (Sq. ft.), Capital value of assets (` lakhs), Light Points, Machine hours, and Horse power of machines. A technical assessment of the apportionment of expenses of service departments is provided for both Dept. X and Dept. Y.
Q4Activity-based costing and profitability analysis by distrib
0 marks hard
Case: PCP Limited evaluates profitability of two supermarket segments (A dealing in Adults' garments and B dealing in Kids' garments) using activity-based costing for April operations.
PCP Limited belongs to the apparel industry. It specializes in the distribution of fashionable garments to two different supermarkets: (i) Supermarket A dealing in Adults' garments (Age group 15 - 30); (ii) Supermarket B dealing in Kids' garments (Age group 5 - 10). Data for April includes Average revenue per delivery, Average cost of goods sold per delivery, and Number of deliveries for both supermarkets. The company has operating costs (other than cost of goods sold) of ` 16,55,995 assigned to five activity areas: Store delivery, Cartons dispatched to store, Shelf-stocking at customer store, Line-item ordering, and Customer purchase order processing. Additional data includes total number of store deliveries, average cartons shipped per delivery, average hours of shelf-stocking per delivery, average line items per order, and total number of orders for both supermarkets.
Q5Cost sheet preparation and productivity metrics computation
0 marks easy
A Ltd. produces a single product X. During the month of December 2021, the company has produced 14,560 tonnes of X. The details for the month include: Materials consumed ` 15,00,000; Power consumed 13,000 Kwh @ ` 7 per Kwh; Diesels consumed 1,000 litres @ ` 93 per litre; Wages & salary paid ` 64,00,000; Gratuity & leave encashment paid ` 44,20,000; Hiring charges paid for HEMM ` 13,00,000; Hiring charges paid for cars used for official purpose ` 80,000; Reimbursement of diesel cost for the cars ` 20,000; The hiring of cars attracts GST under RCM @5% without credit; Maintenance cost paid for weighing bridge ` 7,000; AMC cost of CCTV installed at weighing bridge ` 6,000 and at factory premises ` 18,000 per month; TA/DA and hotel bill paid for sales manager ` 16,000; The company has 180 employees working for 26 days in a month.
Q6Cost ledger control accounts in non-integrated accounting sy
0 marks easy
X Ltd. maintains a non-integrated accounting system for the purpose of management information. The following are the data related with year 2021-22: Opening balances include Stores ledger control A/c ` 48,000; Work-in-process control A/c ` 12,000; Finished goods control A/c ` 2,58,000; Building construction A/c ` 6,000; Cost ledger control A/c ` 3,24,000. During the year, transactions include: Materials purchased ` 24,000 and issued to production ` 30,000, general maintenance ` 3,600, and building construction ` 2,400. Wages include gross wages paid ` 90,000, indirect wages paid ` 24,000, and for building construction ` 6,000. Factory overheads include actual amount incurred ` 96,000, absorbed in building construction ` 12,000, and under-absorbed ` 4,800. Royalty paid ` 3,000. Selling distribution and administration overheads ` 15,000. Sales ` 2,70,000. At year-end, raw material stock ` 3,30,00,000 and work-in-process ` 15,00,000. The loss in raw material account is treated as factory overheads. Building was completed during the year. Gross profit margin is 20% on sales.
Q7Economic batch quantity and inventory holding cost optimizat
0 marks easy
Brostom Ltd. manufactures 'Stent' that is used by hospitals in angioplasty, a procedure used to open blocked coronary arteries without open-heart surgery. As per the estimates provided by Pharmaceutical Industry Bureau, there will be a demand of 1 crore 'Stents' in the coming year. Brostom Ltd. is having a market share of 10% of the total market demand of the Stents. It is estimated that it costs ` 3.00 as inventory holding cost per stent per month and that the set-up cost per run of stent manufacture is ` 450.
Q8Job costing with overhead recovery rates and quotation
0 marks easy
KJ Motors Ltd. is a manufacturer of auto components. Following are the details of expenses for the year 2020-21: Opening Stock of Material ` 15,00,000; Closing Stock of Material ` 20,00,000; Purchase of Material ` 1,80,50,000; Direct Labour ` 90,50,000; Factory Overhead ` 30,80,000; Administrative Overhead ` 20,50,400. During the FY 2021-22, the company has received an order from a car manufacturer where it estimates that the cost of material and labour will be ` 80,00,000 and ` 40,50,000 respectively. The company charges factory overhead as a percentage of direct labour and administrative overheads as a percentage of factory cost based on previous year's cost. Cost of delivery of the components at customer's premises is estimated at ` 9,50,000.
Q9Process costing with normal loss and work-in-progress valuat
0 marks easy
A company produces a component, which passes through two processes. During the month of December, 2021, materials for 40,000 components were put into Process-I of which 30,000 were completed and transferred to Process-II. Those not transferred were 100% complete as to materials cost and 50% complete as to labour and overheads cost. Process-I costs incurred: Direct Materials ` 6,00,000; Direct Wages ` 7,00,000; Factory Overheads ` 4,90,000. Of those transferred to Process II, 28,000 units were completed and transferred to finished goods stores. There was a normal loss with no salvage value of 200 units in Process II. There were 1,800 units remained unfinished with 100% complete as to materials and 25% complete as regard to wages and overheads. Costs incurred in Process-II: Packing Materials ` 1,60,000; Direct Wages ` 1,42,250; Factory Overheads ` 1,70,700. Packing material cost is incurred at the end as protective packing to completed units.
Q10Service costing for vehicle fleet comparing fuel and electri
0 marks hard
Case: Navya LMV Pvt. Ltd compares ownership costs of CNG and EV vehicles for rental service operations with detailed cost components and usage parameters.
Navya LMV Pvt. Ltd, operates cab/car rental service in Delhi/NCR providing service to offices of Noida, Gurugram and Faridabad. It operates CNG fuelled cars but is considering upgrade to Electric vehicle (EV). Ownership details for CNG Car include: purchase price ` 9,20,000, life 15 years, residual value ` 95,000, mileage 20 km/kg, annual maintenance ` 8,000, annual insurance ` 7,600, battery replacement cost (8-year) ` 12,000, tyre replacement (5-year) ` 16,000, CNG cost ` 60 per kg. For EV Car: purchase price ` 15,20,000, govt. subsidy ` 1,50,000, life 10 years, residual value ` 1,70,000, mileage 240 km per charge, electricity consumption 30 Kwh per full charge, power cost ` 7.60 per Kwh, annual maintenance ` 5,200, annual insurance ` 14,600, battery replacement cost (8-year) ` 5,40,000, tyre replacement (5-year) ` 16,000. Additional information: Average distance per month 1,500 km, Driver's salary ` 20,000 p.m, Garage rent ` 4,500 p.m, Office & Administration cost per car ` 1,500 p.m.
Q11Standard costing labour variances analysis
0 marks easy
The standard output of a Product 'D' is 50 units per hour in manufacturing department of a Company employing 100 workers. In a 40 hours week, the department produced 1,920 units of product 'D' despite 5% of the time paid was lost due to an abnormal reason. The hourly wage rates actually paid were ` 12.40, ` 12.00 and ` 11.40 respectively to Group 'A' consisting 10 workers, Group 'B' consisting 30 workers and Group 'C' consisting 60 workers. The standard wage rate per labour is same for all the workers. Labour Efficiency Variance is given ` 480 (F).
Q12Marginal costing and break-even analysis with product mix co
0 marks easy
A Limited manufactures three different products with the following information: Products S, T, U have Sales Mix 25%, 35%, 40% respectively; Selling Price ` 600, ` 800, ` 400 respectively; Variable Cost ` 300, ` 400, ` 240 respectively. Total Fixed Costs ` 36,00,000. Total Sales ` 1,20,00,000. The company proposes to discontinue the manufacture of Product U and replace it with Product M, with the following anticipated results: Products S, T, M will have Sales Mix 40%, 35%, 25% respectively; Selling Price ` 600, ` 800, ` 600 respectively; Variable Cost ` 300, ` 400, ` 300 respectively. Total Fixed Costs ` 36,00,000. Total Sales ` 1,28,00,000.
Q13Revenue and flexible budget preparation with multiple cost e
0 marks easy
Maharatna Ltd., a public sector undertaking (PSU), produces product A. The company is preparing its revenue budget for the year 2022 with the following information: (i) Anticipated 12% growth in sales volume from the year 2021 of 4,20,000 tonnes. (ii) The sales price of ` 23,000 per tonne will be increased by 10% provided Wholesale Price Index (WPI) increases by 5%. (iii) To produce one tonne of product A, 2.3 tonnes of raw material are required. The raw material cost is ` 4,500 per tonne. The price of raw material will also increase by 10% if WPI increase by 5%. (iv) The projected increase in WPI for 2022 is 4%. (v) A total of 6,000 employees works for the company. The company works 26 days in a month. (vi) 85% of employees are permanent and getting salary as per 5-year wage agreement. The earnings per manshift is ` 3,000 (excluding terminal benefits). The new wage agreement will be implemented from 1st July 2022 with a 15% increase in pay expected. (vii) The casual employees are getting a daily wage of ` 850. The wages are linked to Consumer Price Index (CPI). The present CPI is 165.17 points and it is expected to be 173.59 points in year 2022. (viii) Power cost for the year 2021 is ` 42,00,000 for 7,00,000 units (1 unit = 1 Kwh). 60% of power is used for production purpose and remaining for employee quarters and administrative offices. (ix) During the year 2021, the company has paid ` 60,00,000 for safety and maintenance works. The amount will increase in proportion to the volume of production. (x) During the year 2021, the company has paid ` 1,20,000 for the purchase of diesel to be used in car hired for administrative purposes. The cost of diesel will increase by 15% in year 2022. (xi) During the year 2021, the company has paid ` 6,00,000 for car hire charges (excluding fuel cost). In year 2022, the company has decided to reimburse the diesel cost to the car rental company. Doing this will attract 5% GST on Reverse Charge Mechanism (RCM) basis on which the company will not get GST input credit. (xii) Depreciation on fixed assets for the year 2021 is ` 80,40,00,000 and it will be 15% lower in 2022.
Q14Cost accounting concepts, contracts, accounting systems, and
0 marks easy
Miscellaneous questions on cost accounting concepts and principles.