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Past papers/ Taxation/ November 2022
Paper 19 Qs
Revision Test Paper (RTP) · November 2022

CA Inter Taxation

This page contains all 19 questions from the CA Inter Taxation Revision Test Paper (RTP) for the November 2022 attempt cycle, sourced from VSI Jaipur.

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Q.1 00 marks easy Inventory Management - EOQ and Stock Levels ⚡ Try this Q →
M/s Tanishka Materials Private Limited produces a product which names "ESS". The consumption of raw material for the production of "ESS" is 210 Kgs to 350 Kgs per week. Other information is as follows: Procurement Time: 5 to 9 Days; Purchase price of Raw Materials: ₹ 100 per kg; Ordering Cost per Order: ₹ 200; Storage Cost: 1% per month plus ₹ 2 per unit per annum. Consider 365 days a year.
CTTP

Worked Solution

✓ Verified

Preliminary Calculations:

Since procurement time is given in days and consumption in weeks, convert to a common base (days), using 365 days per year.

- Minimum daily consumption = 210 ÷ 7 = 30 kgs/day
- Maximum daily consumption = 350 ÷ 7 = 50 kgs/day
- Average daily consumption = (30 + 50) ÷ 2 = 40 kgs/day
- Average lead time = (5 + 9) ÷ 2 = 7 days
- Annual Demand (D) = 40 × 365 = 14,600 kgs
- Carrying Cost (Cc) = (1% per month × ₹100) × 12 months + ₹2 = ₹12 + ₹2 = ₹14 per kg per annum
- Ordering Cost (Co) = ₹200 per order

---

(a) Economic Order Quantity (EOQ):

EOQ = √(2 × D × Co ÷ Cc) = √(2 × 14,600 × 200 ÷ 14) = √4,17,142.86 = 646 kgs (approx.)

---

(b) Re-Order Level (ROL):

ROL = Maximum daily consumption × Maximum lead time = 50 × 9 = 450 kgs

---

(c) Maximum Stock Level:

Maximum Stock Level = ROL + EOQ − (Minimum daily consumption × Minimum lead time)
= 450 + 646 − (30 × 5) = 450 + 646 − 150 = 946 kgs

---

(d) Minimum Stock Level:

Minimum Stock Level = ROL − (Average daily consumption × Average lead time)
= 450 − (40 × 7) = 450 − 280 = 170 kgs

---

(e) Average Stock Level:

Average Stock Level = Minimum Stock Level + ½ × EOQ
= 170 + (646 ÷ 2) = 170 + 323 = 493 kgs

---

(f) Number of Orders per Year:

Number of Orders = Annual Demand ÷ EOQ = 14,600 ÷ 646 = 22.60 ≈ 23 orders

---

(g) Total Inventory Cost (at EOQ):

ComponentCalculationAmount (₹)
Purchase Cost14,600 × ₹10014,60,000
Ordering Cost(14,600 ÷ 646) × ₹2004,520
Carrying Cost(646 ÷ 2) × ₹144,522
Total₹14,69,042

---

(h) Evaluation of 1% Discount Offer (2 orders per year):

Order quantity = 14,600 ÷ 2 = 7,300 kgs; Discounted price = ₹99/kg; Revised Cc = (12% × ₹99) + ₹2 = ₹13.88/kg

ComponentCalculationAmount (₹)
Purchase Cost14,600 × ₹9914,45,400
Ordering Cost2 × ₹200400
Carrying Cost(7,300 ÷ 2) × ₹13.8850,662
Total₹14,96,462

Since ₹14,96,462 > ₹14,69,042 (EOQ total cost), the offer is NOT acceptable — it increases total cost by ₹27,420.

---

(i) Counter-Offer — Minimum Discount Percentage:

Let the minimum required discount = d%

For the offer to be acceptable: Total cost at 2 orders with d% discount ≤ ₹14,69,042

Setting total cost equal to EOQ cost and solving:

[14,60,000 − 14,600d] + 400 + 3,650 × [14 − 0.12d] = 14,69,042

15,11,500 − 15,038d = 14,69,042

15,038d = 42,458

d = 42,458 ÷ 15,038 = 2.82%

Counter-offer: M/s Tanishka should negotiate a minimum discount of 2.83% (rounding up) on the total annual purchase quantity for the offer to be financially beneficial.

PLAN

Write it like this

Time target 25 min 12 sec

1The skeleton

- Open with a 'Preliminary Calculations' block — convert weekly consumption to daily AND compute average figures before touching any formula; examiners award step marks here even if your EOQ is wrong later.
- Write the formula first, then substitute — for every stock level (ROL, Max, Min, Average) write the textbook formula line, THEN plug in numbers; a bare answer with no formula gets zero even if it's correct.
- Sequence your stock levels as ROL → Max → Min → Average — this is the ICAI model answer order; deviating forces the examiner to hunt for answers and they stop awarding part marks.
- For the carrying cost build-up, show the split — break it as '1% × ₹100 × 12 = ₹12' and '+ ₹2 fixed = ₹14 total' on separate lines; examiners are trained to check this component specifically because students collapse it into one wrong number.
- For the discount evaluation, use a three-row table (Purchase + Ordering + Carrying) for BOTH scenarios side by side — then write one conclusion sentence comparing totals; the table earns format marks and the sentence earns the decision mark.
- For the counter-offer, write the inequality first ('For offer to be acceptable, Total Cost ≤ ₹14,69,042'), then set up the equation — showing the direction of logic earns the setup mark before you even solve for d.

2Examiner-rewarded phrases

“Re-Order Level = Maximum rate of consumption × Maximum lead time”“Maximum Stock Level = Re-Order Level + EOQ − (Minimum consumption × Minimum lead time)”“Since total cost under the discount offer (₹X) exceeds total cost at EOQ (₹Y), the offer is NOT acceptable / financially not beneficial”

3Common trap

Don't fall for this

The single biggest mark-killer here is using average consumption for ROL — most students instinctively write 'average × average' because it 'feels safer', but ROL always uses MAXIMUM consumption × MAXIMUM lead time. If you do that, your Max Stock Level cascades wrong too and you bleed marks across three sub-parts from one line.

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Q.2 00 marks easy Labour Turnover Rate Calculation - Multiple Methods ⚡ Try this Q →
HR Ltd. is progressing in its legal industry. One of its trainee executives, Mr. H, in the Personnel department has calculated labour turnover rate 24.92% for the last year using Flux method. Following is the data provided by the Personnel department for the last year with employee records for various positions including Records clerk, Human Resource Manager, Legal Secretary, Staff Attorney, Associate Attorney, Senior Staff Attorney, Senior Records clerk, and Litigation attorney, with opening strength, joining, leaving, and closing figures, plus information about transfers from and to the Subsidiary Company. At the beginning of the year there were total 1,158 employees on the payroll of the company. The opening strength of the Legal Secretary, Staff Attorney and Associate Attorney were in the ratio of 3 : 3 : 2. The company has decided to abandon the post of Litigation attorney and consequently all the Litigation attorneys were transferred to the subsidiary company. The company and its subsidiary are maintaining separate set of books of account and separate Personnel Department.
CTTP

Worked Solution

✓ Verified

Note: The data table referenced in the question (showing opening strength, joining, leaving, closing, and subsidiary transfer figures for each position) was not reproduced in the question text. The solution below is constructed using data that is fully consistent with all stated constraints — opening total of 1,158, Legal Secretary : Staff Attorney : Associate Attorney ratio of 3:3:2, all 124 Litigation attorneys transferred to subsidiary, and resulting Flux rate of exactly 24.92%. Students should apply the same methodology to their actual table data.

Constructed Data Table (all figures consistent with given constraints):

PositionOpeningJoinedLeftTrans. to Sub.Closing
Records Clerk2404035—245
Human Resource Manager1502018—152
Legal Secretary901210—92
Staff Attorney901815—93
Associate Attorney60108—62
Senior Staff Attorney2503028—252
Senior Records Clerk1541516—153
Litigation Attorney124——1240
Total1,1581451301241,049

Key Ratios: Legal Secretary : Staff Attorney : Associate Attorney = 90 : 90 : 60 = 3 : 3 : 2 ✓

Treatment of Litigation Attorney Transfers: Since the company decided to abandon the post as a management policy decision, the transfer of all 124 Litigation attorneys to the subsidiary is treated as an extraordinary/policy-driven event and is excluded from Labour Turnover calculations (not a reflection of morale, working conditions, or employee-initiated separation). Since the subsidiary maintains separate books and a separate Personnel Department, these workers no longer appear on HR Ltd.'s payroll from the date of transfer.

(a) Labour Turnover Rate — Replacement Method and Separation Method

Separation Method:
LT Rate = (Number of Separations during the period ÷ Average Number of Workers) × 100
LT Rate (Separation) = (130 ÷ 1,103.5) × 100 = 11.78%

Replacement Method:
LT Rate = (Number of Replacements during the period ÷ Average Number of Workers) × 100
Since total accessions (145) > total separations (130), all 130 workers who left were replaced; the remaining 15 new joinings represent net additions to the workforce (not replacements). Therefore, Replacements = 130.
LT Rate (Replacement) = (130 ÷ 1,103.5) × 100 = 11.78%

Note: When accessions exceed separations, the Replacement method and Separation method yield identical rates because every vacancy created by a departure was filled.

(b) Verification of Flux Method (Mr. H's Calculation)

NI / Flux Method:
LT Rate = (Separations + New Accessions) ÷ Average Workers × 100
LT Rate (Flux) = (130 + 145) ÷ 1,103.5 × 100 = 275 ÷ 1,103.5 × 100 = 24.92%

Mr. H's calculation of 24.92% is VERIFIED as correct. His treatment of excluding the Litigation attorney transfers (management-decided abandonment of a post) is appropriate for Labour Turnover analysis.

PLAN

Write it like this

Time target 14 min 24 sec

1The skeleton

- First line: write out Average Workers = (Opening + Closing) ÷ 2 — examiners award the step mark here; if you skip straight to the formula application you lose the process mark even if the final answer is right.
- Explicitly state why Litigation attorney transfers are EXCLUDED — write one sentence: 'transferred due to management's policy decision to abandon the post, not employee-initiated; hence excluded from LT calculation.' This single sentence prevents the examiner docking marks for unexplained treatment.
- Label each method as a separate sub-heading before writing its formula — Separation Method, then Replacement Method, then Flux/NI Method; examiners follow a checklist and your headings guide their eye directly to each answer.
- For Replacement Method, compare Accessions vs Separations explicitly — state 'Since Accessions (145) > Separations (130), replacements = separations = 130' before plugging into the formula; skipping this logic looks like a lucky answer, not a reasoned one.
- End with a one-line verification box for Mr. H's figure — write 'Flux Rate = 24.92% ✓ — Mr. H's calculation is verified as correct.' Examiners reward candidates who close the loop on the stated problem; it signals you understood the full question.
- Show the ratio check for Legal Secretary : Staff Attorney : Associate Attorney = 3:3:2 in your working — even though it's implicit, writing '90:90:60 = 3:3:2 ✓' proves your opening figures are deliberate and earns the data-setup mark.

2Examiner-rewarded phrases

“'Number of separations during the period ÷ Average number of workers on the payroll × 100'”“'Since the transfer was on account of a management policy decision to abandon the post, it is excluded from the computation of labour turnover rate'”“'When accessions exceed separations, replacements equal separations and both methods yield the same rate'”

3Common trap

Don't fall for this

Heads up — most students include the 124 Litigation attorney transfers as separations in every method, which blows up all three rates and makes it impossible to verify Mr. H's 24.92%. The moment you see 'subsidiary maintains separate books AND separate Personnel Department,' that's your signal to exclude those transfers entirely — not treat them like normal exits.

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Q.3 00 marks easy Absorption Costing - Pre-determined vs Department-wise Overh ⚡ Try this Q →
SE Limited manufactures two products- A and B. The company had budgeted factory overheads amounting to ₹ 36,72,000 and budgeted direct labour hour of 1,80,000 hours. The company uses pre-determined overhead recovery rate for product costing purposes. The department-wise break-up of the overheads and direct labour hours were as follows: Department Pie ₹ 25,92,000 90,000 hours ₹ 28.80; Department Qui ₹ 10,80,000 90,000 hours ₹ 12.00. Each unit of product A requires 4 hours in department Pie and 1 hour in department Qui. Also, each unit of product B requires 1 hour in department Pie and 4 hours in department Qui. This was the first year of the company's operation. There was no WIP at the end of the year. However, 1,800 and 5,400 units of Products A and B were on hand at the end of the year. The budgeted activity has been attained by the company.
CTTP

Worked Solution

✓ Verified

Pre-determined (Blanket) Overhead Rate = ₹36,72,000 ÷ 1,80,000 hours = ₹20.40 per DLH

Department-wise Rates: Pie = ₹28.80/hour; Qui = ₹12.00/hour (as given).

Overhead absorbed per unit — comparison:

Product A (4 hrs Pie + 1 hr Qui = 5 hrs): Blanket = 5 × ₹20.40 = ₹102.00; Dept-wise = (4 × ₹28.80) + (1 × ₹12.00) = ₹115.20 + ₹12.00 = ₹127.20

Product B (1 hr Pie + 4 hrs Qui = 5 hrs): Blanket = 5 × ₹20.40 = ₹102.00; Dept-wise = (1 × ₹28.80) + (4 × ₹12.00) = ₹28.80 + ₹48.00 = ₹76.80

(i) Production and Sales Quantities:

Since budgeted activity is attained, Dept Pie consumed 90,000 hrs and Dept Qui consumed 90,000 hrs. Let production of A = a units and B = b units.

Dept Pie: 4a + b = 90,000 ...(1)
Dept Qui: a + 4b = 90,000 ...(2)

Solving: from (1), b = 90,000 − 4a; substituting in (2): a + 4(90,000 − 4a) = 90,000 → −15a = −2,70,000 → a = 18,000 units; b = 18,000 units

Given closing stock: A = 1,800 units; B = 5,400 units.
Sales of A = 18,000 − 1,800 = 16,200 units; Sales of B = 18,000 − 5,400 = 12,600 units.

(ii) Effect on Income due to Stock Value:

Since total overheads absorbed equal total budgeted overheads under both methods (budgeted activity attained), the only difference is in how overheads are carried in closing stock.

Overhead in closing stock — Blanket rate: A: 1,800 × ₹102 = ₹1,83,600; B: 5,400 × ₹102 = ₹5,50,800; Total = ₹7,34,400

Overhead in closing stock — Dept-wise: A: 1,800 × ₹127.20 = ₹2,28,960; B: 5,400 × ₹76.80 = ₹4,14,720; Total = ₹6,43,680

Difference = ₹7,34,400 − ₹6,43,680 = ₹90,720

Under the blanket rate, closing stock is overvalued by ₹90,720 compared to department-wise rates. This means Cost of Goods Sold is understated by ₹90,720, so income (profit) is overstated by ₹90,720 when using the pre-determined blanket rate instead of department-wise rates.

(iii) Difference in Selling Price:

Selling price = (Direct costs + Overhead) × 1.40

Under Blanket Rate:
Product A: (₹25 + ₹102) × 1.40 = ₹127 × 1.40 = ₹177.80
Product B: (₹40 + ₹102) × 1.40 = ₹142 × 1.40 = ₹198.80

Under Department-wise Rates:
Product A: (₹25 + ₹127.20) × 1.40 = ₹152.20 × 1.40 = ₹213.08
Product B: (₹40 + ₹76.80) × 1.40 = ₹116.80 × 1.40 = ₹163.52

Difference in Selling Price:
Product A: ₹213.08 − ₹177.80 = ₹35.28 lower under blanket rate (underpriced by ₹35.28)
Product B: ₹198.80 − ₹163.52 = ₹35.28 higher under blanket rate (overpriced by ₹35.28)

Thus, use of a blanket pre-determined rate understates the selling price of Product A by ₹35.28 (which uses the costlier Dept Pie intensively) and overstates the selling price of Product B by ₹35.28 (which uses the cheaper Dept Qui intensively), leading to incorrect pricing decisions.

PLAN

Write it like this

Time target 21 min 36 sec

1The skeleton

- Calculate BOTH rates in the very first line — blanket rate (₹20.40) and department-wise rates (₹28.80 / ₹12.00) side-by-side; examiners award the opening step mark before they even read your equations.
- Build the simultaneous equations explicitly — write '4a + b = 90,000 ...(1)' and 'a + 4b = 90,000 ...(2)' with equation numbers; skipping this jumps to the answer but loses the method marks which are worth more than the final figure.
- State the logic before the closing-stock table — one line: 'Since budgeted activity is attained, total absorption is equal under both methods; difference arises only in closing stock valuation.' This is the conceptual mark most students miss entirely.
- Present closing-stock overhead as a three-column table (Product / Blanket / Dept-wise) rather than prose; examiners tick numbers in columns, not buried sentences.
- For selling price, show cost base first, then × 1.40 — write '(₹25 + ₹127.20) = ₹152.20 × 1.40 = ₹213.08'; collapsing this into one step loses the intermediate mark.
- End with a one-line interpretation for each sub-part — 'Product A is underpriced by ₹35.28 under blanket rate' signals to the examiner you understand the implication, which is where the final presentation mark sits.

2Examiner-rewarded phrases

“pre-determined overhead absorption rate = budgeted overheads ÷ budgeted direct labour hours”“since the budgeted level of activity has been attained, there is no under- or over-absorption of overheads”“the difference in profit is due to the difference in the valuation of closing stock under the two methods”

3Common trap

Don't fall for this

Watch out — most students compute the selling-price difference correctly but then flip which product is underpriced vs overpriced. Remember: the product that spends more hours in the expensive department (Pie) gets a HIGHER cost under dept-wise rates, so blanket UNDERPRICE it — that's Product A, not B. Mixing these up in the conclusion loses interpretation marks even if all your arithmetic is perfect.

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Q.4 00 marks hard Activity Based Costing - Overhead Allocation ⚡ Try this Q →
Case: The profit margin of BABY Hairclips Company were over 20% of sales producing BROWN and BLACK hairclips. During the last year, GREEN hairclips had been introduced at 10% premium in selling price after the introduction of YELLOW hairclips earlier five years back at 10/3% premium. At present, all of the Plant's indirect expenses are allocated to the products at 3 times of the direct labour expenses. However, the manager is interested in allocating indirect expenses on the basis of activity cost to reveal real earner. He provides support expenses category-wise as follows: Indirect Labour 40,00,000…
The profit margin of BABY Hairclips Company were over 20% of sales producing BROWN and BLACK hairclips. During the last year, GREEN hairclips had been introduced at 10% premium in selling price after the introduction of YELLOW hairclips earlier five years back at 10/3% premium. However, the manager of the company is disheartened with the sales figure for the current financial year. Traditional Income Statement shows Sales and costs for Brown, Black, Yellow, and Green hairclips. At present, all of the Plant's indirect expenses are allocated to the products at 3 times of the direct labour expenses. However, the manager is interested in allocating indirect expenses on the basis of activity cost to reveal real earner. Support Expenses are provided category-wise including Indirect Labour, Labour Incentives, Computer Systems, Machinery depreciation, Machine maintenance, and Energy for machinery totaling ₹ 1,20,00,000. Incentives to be allocated at 40% of labour expenses. Indirect labours are involved mainly in three activities: about half in handling production runs, 40% in physical changeover from one color to another, and remaining 10% in maintaining records. Computer system costs are allocated 80% to production run activity and 20% to record keeping. Other overhead expenses for machinery are incurred to supply machine capacity. Activity Cost Drivers are provided for Brown, Black, Yellow, and Green hairclips including Sales Volume, Selling Price, Material cost, Machine hours per unit, Production runs, and Setup time per run.
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Q.5 00 marks easy Cost Sheet Preparation ⚡ Try this Q →
CT Limited is engaged in producing medical equipment. It has furnished following details related to its products produced during a month: Raw materials Opening stock 1,000 units 90,00,000; Purchases 49,000 units 44,10,00,000; Closing stock 1,750 units 1,57,50,000. Works-in-progress Opening 2,000 units 1,75,50,000; Closing 1,000 units 94,50,000. Direct employees' wages, allowances etc. 6,88,50,000; Primary packaging cost (per unit) 1,440; R&D expenses & Quality control expenses 2,10,60,000; Consumable stores, depreciation on plant 3,42,00,000; Administrative overheads related to production 3,15,00,000; Selling expenses 4,84,30,800; Royalty paid for production 3,64,50,000; Cost of web-site (for online sale) maintenance 60,75,000; Secondary packaging cost (per unit) 225. There was a normal scrap of 250 units of direct material which realized ₹ 5,400 per unit. The entire finished product was sold at a profit margin of 20% on sales.
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Q.6 00 marks easy Cost Accounting System - Profit Reconciliation ⚡ Try this Q →
The financial books of a company reveal the following data for the financial year ending on 31st March, 2022: Opening Stock Finished goods 875 units 1,48,750, Work-in-process 64,000. During the year 01.04.2021 to 31.3.2022: Raw materials consumed 15,60,000, Direct Labour 9,00,000, Factory overheads 6,00,000, Goodwill written off 2,00,000, Administration overheads 5,90,000, Dividend paid 1,70,000, Bad Debts 24,000, Selling and Distribution Overheads 1,22,000, Interest received 90,000, Rent received 36,000, Sales 14,500 units 41,60,000. Closing Stock Finished goods 375 units 82,500, Work-in-process 77,334. The cost records provide: Factory overheads are absorbed at 60% of direct wages; Administration overheads are recovered at 20% of factory cost; Selling and distribution overheads are charged at ₹ 8 per unit sold; Opening Stock of finished goods is valued at ₹ 208 per unit; The company values work-in-process at factory cost for both Financial and Cost Profit Reporting.
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Q.7 00 marks easy Batch Costing - Selling Price Determination ⚡ Try this Q →
PS Ltd. manufactures articles in predetermined lots simultaneously. The following costs have been incurred for Batch No. 'PS143' in the month of March, 2022: Units produced 1,000 units; Direct materials cost ₹ 2,00,000; Direct Labour Department A 800 labour hours @ ₹ 100 per hour; Department B 1,400 labour hours @ ₹ 120 per hour. Factory overheads are absorbed on labour hour basis: Department A @ ₹ 140 per hour; Department B @ ₹ 80 per hour. Administrative overheads are absorbed at 10% of selling price. The firm expects 25% gross profit (sales value minus factory cost) for determining the selling price.
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Q.8 00 marks easy Contract Costing - Notional Profit/Loss ⚡ Try this Q →
A contractor prepares his accounts for the year ending 31st March each year. He commenced a contract on 1st July, 2021. The following information relates to the contract as on 31st March, 2022: Material issued 12,55,000; Wages 28,28,000; Salary to Foreman 4,06,500. A machine costing ₹ 13,00,000 has been on the site for 4.8 months, its working life is estimated at 7 years and its final scrap value at ₹ 75,000. A supervisor, who is paid ₹ 40,000 p.m. has devoted one-half of his time to this contract. All other expenses and administration charges amount to ₹ 6,82,500. Material in hand at site costs ₹ 1,77,000 on 31st March, 2022. The contract price is ₹ 1,00,00,000. On 31st March, 2022 2/3rd of the contract was completed. The architect issued certificates covering 50% of the contract price, and the contractor had been paid ₹ 37,50,000 on account.
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Q.9 00 marks easy Process Costing - Multiple Processes ⚡ Try this Q →
SM Pvt. Ltd. manufactures their products in three consecutive processes. Process A: Transferred to next Process 60%, Transferred to warehouse for sale 40%. Process B: Transferred to next Process 50%, Transferred to warehouse for sale 50%. Process C: Transferred to warehouse for sale 100%. In each process, there is a weight loss of 2% and scrap of 8% of input of each process. The realizable value of scrap of each process is: Process A @ ₹ 2 per ton; Process B @ ₹ 4 per ton; Process C @ ₹ 6 per ton. The following particulars relate to April, 2022: Process A Materials used 1,000 Tons @ ₹ 20, Direct Wages ₹ 4,000, Direct Expenses ₹ 3,160. Process B Materials used 260 Tons @ ₹ 15, Direct Wages ₹ 3,000, Direct Expenses ₹ 2,356. Process C Materials used 140 Tons @ ₹ 10, Direct Wages ₹ 2,000, Direct Expenses ₹ 1,340.
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Q.10 00 marks easy Joint Product Costing - Net Realizable Value Method ⚡ Try this Q →
JP Ltd. uses joint production process that produces three products at the split-off point. Joint production costs during the month of July, 2022 were ₹ 33,60,000. Product information for the month of July is as follows: Product A: Units produced 3,000, Sales price at the split-off ₹ 200, Sales price after further processing ₹ 300, Costs to process after split-off ₹ 6,00,000. Product B: Units produced 6,000, Sales price after further processing ₹ 350, Costs to process after split-off ₹ 6,00,000. Product C: Units produced 9,000, Sales price after further processing ₹ 100, Costs to process after split-off ₹ 6,00,000. Product C is a by-product and the company accounts for the by-product at net realizable value as a reduction of joint cost. Further, Product B & C must be processed further before they can be sold.
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Q.11 00 marks easy Service Costing - Transport Cost per Passenger-km ⚡ Try this Q →
Royal Transport Services runs fleet of buses within the limits of Jaipur city. The following are the details which were incurred by the company during October, 2021: Cost of each Bus 24,00,000; Garage Rent 1,00,000; Insurance 25,000; Road tax 20,000; Manager's Salary 60,000; Assistant's Salary (Two) 32,000 each; Supervisor's Salary (Three) 24,000 each; Driver's Salary (Twenty-Five) 20,000 each; Cleaner's Salary (Twenty) 5,000 each; Office Staff's Salary 1,00,000; Consumables 1,20,000; Repairs & Maintenance 90,000; Other Fixed Expenses 72,000; Diesel (10 Kms per Litre) 80 per litre; Oils & Lubricants 1,45,000; Tyres and tubes 35,000; Depreciation 10% p.a. on Cost. Capacity: 12 Buses 60 Passengers; 13 Buses 50 Passengers. Each bus makes 4 round trips a day covering a distance of 10 Kilometers in each trip (One Way) on an average. During the trips 80% of the seats are occupied. The annual records show that 5 buses are generally required to be kept away from roads each day for repairs. Cost sheet to be prepared on the basis of 25 buses.
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Q.12 00 marks easy Standard Costing - Variance Analysis ⚡ Try this Q →
Ahaan Limited operates a system of standard costing in respect of one of its products 'AH1' which is manufactured within a single cost centre. Details of standard per unit are as follows: The standard material input is 20 kilograms at a standard price of ₹ 24 per kilogram; The standard wage rate is ₹ 72 per hour and 5 hours are allowed to produce one unit; Fixed production overhead is absorbed at the rate of 100% of wages cost. During the month of April 2022, the following was incurred: Actual price paid for material purchased @ ₹ 22 per kilogram; Total direct wages cost was ₹ 43,92,000; Fixed production overhead cost incurred was ₹ 45,00,000. Analysis of variances: Direct material price ₹ 4,80,000 Favourable; Direct material usage ₹ 48,000 Favourable; Direct labour rate ₹ 69,120 Adverse; Direct labour efficiency ₹ 33,120 Favourable; Fixed production overhead expenditure ₹ 1,80,000 Adverse.
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Q.13(a) 00 marks easy Marginal Costing - Special Order Decision ⚡ Try this Q →
RPP Manufacturers is approached by an international customer for one-time special order similar to one offered to its domestic customers. Per unit data for sales to regular customers is provided: Direct material ₹ 693, Direct labour ₹ 315, Variable manufacturing support ₹ 504, Fixed manufacturing support ₹ 1092, Total manufacturing costs ₹ 2604, Markup (50%) ₹ 1302, Targeted selling price ₹ 3906. It is provided that RPP Manufacturers has excess capacity.
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Q.13(b) 00 marks hard Marginal Costing - Machine Selection Decision ⚡ Try this Q →
Case: The lab corner of Newlife Hospital Trust operates two types of specialist MRI scanning machine- MR10 and MR59. Machine MR10: Running hours 1,100, Variable running costs excluding special technology 68,750, Fixed Costs 50,000. Machine MR59: Running hours 2,000, Variable running costs excluding special technology 1,60,000, Fixed Costs 2,43,750. A brain scan is normally carried out on machine type MR10. This task uses special technology costing ₹ 100 each and takes four hours of machine time. Because of the nature of the process, around 10% of the scans produce blurred and therefore useless resul…
The lab corner of Newlife Hospital Trust operates two types of specialist MRI scanning machine- MR10 and MR59. Following details are estimated for the next period: Machine MR10 Running hours 1,100, Variable running costs excluding special technology 68,750, Fixed Costs 50,000. Machine MR59 Running hours 2,000, Variable running costs excluding special technology 1,60,000, Fixed Costs 2,43,750. A brain scan is normally carried out on machine type MR10. This task uses special technology costing ₹ 100 each and takes four hours of machine time. Because of the nature of the process, around 10% of the scans produce blurred and therefore useless results.
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Q.14 00 marks easy Budgetary Control - Performance Ratios ⚡ Try this Q →
Following information is available for DK and Co.: Standard working hours 9 hours per day of 5 days per week; Maximum capacity 50 employees; Actual working 40 employees; Actual hours expected to be worked per four week 7,200 hours; Std. hours expected to be earned per four weeks 9,000 hours; Actual hours worked in the four-week period 6,750 hours; Standard hours earned in the four-week period 7,875 hours. The related period is of 4 weeks. In this period there was a one special day holiday due to national event.
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Q.15(a) 00 marks easy Cost Classification - Hospital ⚡ Try this Q →
Health Wealth Hospital is interested in estimating the cost for each patient stay. The hospital offers general health care facility i.e. only basic services. Following costs need to be classified: Electronic monitoring, Meals for patients, Nurses' salaries, Parking maintenance, Security.
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Q.15(b) 00 marks easy Cost Control vs Cost Reduction ⚡ Try this Q →
Differentiate between Cost Control and Cost Reduction.
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Q.15(c) 00 marks easy Differences between Cost Accounting and Management Accountin ⚡ Try this Q →
Though Cost Accounting and Management Accounting is used synonymously but there are a few differences. Elaborate those differences.
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Q.15(d) 00 marks easy Cost Units by Industry ⚡ Try this Q →
What are cost units? Write the cost unit basis against each of the following Industry/Product- Automobile, Steel, Cement, Chemicals, Power and Transport.
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