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A product passes through two distinct processes X and Y. From the following information, you are required to prepare the Process Accounts, Abnormal Loss and Abnormal Gain Accounts. Units issued Process X - 10,000 units at Rs. 10 each
| Process X | Process Y | |
| Materials added (Rs.) | 40,000 | 30,000 |
| Direct labour (Rs.) | 20,000 | 24,000 |
| Overhead (Rs.) | 13,500 | 22,610 |
| Nonnal wastage (Rs.) | 5% | 5% |
Scrap value of normal loss Rs. 5 per unit Rs. 10 per unit
Concept: undefined >> undefined
Product 'X' is obtained after it is processed through Process A, B and C. The following cost information is available for the month ended 31.03.2018 :
| Particulars | A | B | C |
| No. of Units introduced in the Process | 500 | - | - |
| Rate per Unit of Units Introduced (Rs.) | 04 | - | - |
| Cost of Material | 2,600 | 2,000 | 1,025 |
| Direct Wages | 2,250 | 3,680 | 1,400 |
| Production Overheads | 2,250 | 3,680 | 1,400 |
| Normal Loss | 10% | 20% | 25% |
| Value of Scrap per Unit | 02 | 04 | 05 |
| Output in Units | 450 | 340 | 270 |
There is no Stock in any Process.
You are required to prepare (1) Process B A/c, (2) Abnormal Loss A/c, (3) Abnormal Gain A/c.
Concept: undefined >> undefined
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A factory engaged in producing 'Plastic Buckets' in working to 40% capacity and produces 10,000 buckets p.a.
The present cost break-up for one bucket is as under:
| Material | (Rs.) 10 |
| Labour Cost | (Rs.) 3 |
| Overheads | (Rs.) 5( 60% Fixed Cost) |
| Selling Price | (Rs.) 20 Per Bucket |
If it is decided to work the factory at 50% capacity, the selling price falls by 3%. At 90% capacity, the selling price falls by 5% accompanied by the similar fall in the prices of materials. You are required to calculate the profit at 50% and 90% capacity and also calculate the BEP for the same capacity productions.
Concept: undefined >> undefined
A cost structure of a Company is expressed by the following equation :
T = Rs. 30,000 + 0.70X
where,
T =Total Cost
X =Sales Value.
CalCulate :
(a) Break-even Point Sales in Rupees.
(b) Profit on the present Sales of 1,200 units @ Rs. 100 per unit.
(c) Margin of Safety in :
(i) Rupee Value, (ii) Units, (iii) As a Percentage of Sales.
Concept: undefined >> undefined
The Sales Turnover and Total Cost of M/s. ABC Ltd. are as under :
| Year | Sales(Rs.) | Total Cost (Rs.) |
| 2017 | 1,50,000 | 1,20,000 |
| 2018 | 1,80,000 | 1,42,500 |
You are required to calculate:
(a) Profit Volume Ratio, (b) Fixed Cost, (c) Break-even Point, (d) Sales to earn a Profit of Rs. 45,000.
Concept: undefined >> undefined
The following are the details for a job which is expected to be completed within 50 weeks.
| Grade of Workers | Standard | Actual | ||
| No. of Workers | Wage Rate Per Worker (Weekly) (Rs.) | No. of Workers | Wage Rate Per Worker (Weekly) (Rs.) | |
| Skilled | 80 | 75 | 70 | 80 |
| Semi-skilled | 40 | 50 | 40 | 60 |
| Unskilled | 50 | 35 | 50 | 20 |
55 weeks were taken to complete the job.
Calculate the various Labour Variances.
Concept: undefined >> undefined
A gang of workers normally consists of 30 men, 15 women and 10 boys. They are paid at standard hourly rates as under :
| Men | Re. 0.80 |
| Women | Re. 0.60 |
| Boys | Re. 0.40 |
In a normal working week of 40 hours, the gang is expected to produce 2000 units of output.
During the week ended 31st December 2017, the gang consists of 40 men, 10 women and 5 boys. The actual wages paid were @ Rs. 0. 70, Rs. 0.65 and Rs. 0.30 respectively. 4 hours were lost due to abnormal idle time, and 1,600 units were produced.
Calculate all the Labour Variances.
Concept: undefined >> undefined
From the following information calculate:
(i) Labour Cost Variance,
(ii) Labour Rate Variance,
(iii) Labour Efficiency Variance.
| Gross direct wages | Rs. 3,000 |
| Standard hours for production | 1,600 Hrs. |
| Standard rate per hour | Rs. 1.50 |
| Actual hours for Production | 1,500 Hrs. |
Concept: undefined >> undefined
From the following details, Calculate :
(i) Labour Cost Variance,
(ii) Labour Rate Variance,
(iii) Labour Efficiency Variance,
(iv) Labour Mix Variance.
| Workers | Standard | Actual | ||||
| Hours | Rate(Rs.) | Total(Rs.) | Hours | Rate(Rs.) | Total(Rs.) | |
| Skilled | 30 | 5.00 | 150 | 32 | 5 | 160 |
| Unskilled | 40 | 4.00 | 160 | 32 | 4.25 | 136 |
| 70 | 310 | 64 | 296 | |||
Concept: undefined >> undefined
In Bhagwati Mills Ltd. Thane standard labour cost of producing 500 metres of cloth has been specified as follows :
• Men Workers : 20 Hours @ Rs. 15 per hour
• Women Workers : 30 Hours @ Rs. 10 per hour
The actual cost data for producing 500 metres of cloth is as follows :
• Men Workers : 30 Hours @ Rs. 17 per hour
• Women Workers : 30 Hours@ Rs. 10 per hour
You ate required to calculate :
(i) Labour Cost Variance,
(ii) Labour Rate Variance,
(iii) Labour Efficiency Variance,
(iv) Labour Mix Variance.
Concept: undefined >> undefined
From the following particulars, calculate :
(i) Labour Cost Variance,
(ii) Labour Rate Variance,
(iii) Labour Efficiency Variance.
Verify your results
Standard Hours per unit of output = 20 hours
Standard Rate per hour = Rs. 50.
Actual Production = 2,000 units.
Actual Hours = 35,000 hours.
Actual rate per hour = Rs. 40.
Concept: undefined >> undefined
Modern Contractors have undertaken the following two contracts on 1st January, 2017.
| Particulars | Contract A(Rs.) | Contract B(Rs.) |
| Materials sent to sites | 85,349 | 73,267 |
| Labour engaged on sites | 74,375 | 68,523 |
| Plant installed at sites at cost | 15,000 | 12,500 |
| Direct expenditure | 3,167 | 2,859 |
| Establishment charges | 4,126 | 3,852 |
| Materials returned to stores | 549 | 632 |
| Work certified | 1,95,000 | 1,45,000 |
| Materials in hand on 31st Dec. 2017 | 1,883 | 1,736 |
| Cost of work not certified | 4,500 | 3,000 |
| Wages accrued on 31 51 Dec. 2017 | 2,400 | 2,100 |
| Direct expenditure accrued on 31 Dec. 2017 | 240 | 180 |
| Value of plant on 31st Dec. 2017 | 11,000 | 9,500 |
The contract prices have been agreed at Rs. 2,50,000 for Contract A and Rs. 2 00 000 for Contract B. Cash has been received.from contractors as follows:
Contract A Rs. l,80,000 and Contract B Rs. 1,40,000.
Prepare Contract Accounts, Contractee's Account and show how the Work-in-Progress will appear in the Balance Sheet of the contractor.
Concept: undefined >> undefined
X Ltd. is engaged in two contracts, A and B during the year .
The following information is available at 31st Dec. 2017.
| Date of Commencement | Contract - A (Rs.) | Contract - B (Rs.) |
| Contract Price | 6,00,000 | 5,00,000 |
| Materials delivered to site | 1,20,000 | 50,000 |
| Material issued from store | 40,000 | 10,000 |
| Material returned to store | 4,000 | 2,000 |
| Material on site 31st Dec. 2017 | 22,000 | 8,000 |
| Direct labour payments | 1,40,000 | 35,000 |
| Direct expenses | 60,000 | 30,000 |
| Architect's fees | 2,000 | 1,000 |
| Establishment charges | 25,000 | 7,000 |
| Plant installed at cost | 80,000 | 70,000 |
| Value of Plant on 31st Dec. 2017 | 65,000 | 64,000 |
| Accrued wages 31st Dec. 2017 | 10,000 | 7,000 |
| Accrued expenses 31st Dec: 2017 | 6,000 | 5,000 |
| Cost of contract not certified by architect | 23,000 | 10,000 |
| Value of contract certified by architect | 4,20,000 | 1,35,000 |
| Cash received | 3,78,000 | 1,25,000 |
During the period, materials amounting to Rs. 9,000 have been transferred from Contract A to Contract B. You are required to show :
(a) Contract Alc,
(b) Contractee 's Alc, and
(c) Extract from Balance Sheet as on 31st Dec. 2017 showing the calculation of WIP.
Concept: undefined >> undefined
M/s PQR gives following details in respect of a unit of a particular Product :
| Particulars | (Rs.) |
| Selling price | 200 |
| Direct material | 50 |
| Direct labour | 40 |
| Variable expenses | 30 |
Number of units produced and sold in a month of August 2018 are 1,000. Fixed overheads in a month are 30,000.
You are required to calculate for August 2018 ;
(i) P/V Ratio.
(ii) Break even point (in Units).
(iii) Margin of Safety (in Units), Actual Sales (Units) and BEP Sales Units.
(iv) If Selling price is increased by 10%, calculate the Revised Break-even Point (in units) and Margin of Safety.
Concept: undefined >> undefined
The budgeted production of Alfa Ltd. is 60,000 units, the Variable cost per unit is Rs.16 and Fixed Cost per unit is Rs. 4. Selling price is to be fixed to fetch a profit of 20% on cost.
(i) Calculate BEP and P/V ratio at budgeted selling price.
(ii) If selling price is reduced by 10%, what will be the BEP and P/V ratio ?
(iii) Company desires 10% increase in budgeted profits at revised selling price mentioned in (ii) above, calculate required Sales volume in units and rupees.
Concept: undefined >> undefined
A company producing single article sales at Rs. 10 each. The Marginal Cost of Production is Rs. 6 and Fixed Cost is Rs. 400 p.a.
Calculate : (a) P/V Ratio, (b) Break-even Sales, (c) The Sales to earn Profit of Rs. 500, and (d) Profit at Sales of Rs. 3,000.
Concept: undefined >> undefined
Deepankar Engineers undertook a contract of building construction which commenced on 1/4/2017. The following details are available for the year ending
3113/2018.
You are required to prepare :
(a) Contract Account for the year ending 31/3/2018, and
(b) Balance-sheet extract as on that date.
| Particulars | (Rs.) | Particulars | (Rs.) |
| Contract price | 3,50,000 | Direct Wages Paid | 40,000 |
| Work certified | 1,7,500 | Material Returned From site | 2,500 |
| Cash received | 1,20,000 | Plant hire charges | 17,500 |
| Materials issued to site | 42,000 | Indirect Wages | 5,000 |
| Planning and Estimating Cost | 10,000 | Site Office Costs | 6,780 |
| Direct Expenses | 9,020 | Head Office Exps. apportioned | 3,750 |
| Work not Certified | 1,490 |
The contractor's own plant, original cost Rs. 20,000, has been continuously in use for this contract throughout the year. The residual value of the plant after 5 years of life is expected to be Rs. 5,000. Straight line method of depreciation is in use. As on 31/03/2018, outstanding wages amounted to Rs. 27,000 and material at site was estimated at Rs. 20,000.
Concept: undefined >> undefined
The following information is obtained from ABC Ltd. and XYZ Ltd. in a year.
| Particulars | ABC Ltd.(Rs.) | XYZ Ltd.(RS.) |
| Sales | 3,00,000 | 3,00,000 |
| (-) Variable Cost | 2,00,000 | 2,25,000 |
| (- ) Fixed Cost | 50,000 | 25,000 |
| Estimated Profit | 50,000 | 50,000 |
You are required to calculate for each company.
(i) Profit Volume Ratio and Break Even Point.
(ii) Margin of Safety.
Concept: undefined >> undefined
The Directors of Steel Manufacturing Co. gives the following information.
| Sales - (1,00,000 units) | (Rs.) 1,00,000 |
| Variable Costs | (Rs.) 40,000 |
| Fixed Costs | (Rs.) 50,000 |
(i) Find out PN Ratio, Break Even Point & Margin of Safety.
(ii) In case of 20% increase In Physical Sales Volume, calculate P/V Ratio, Break Even Point & Margin of Safety.
Concept: undefined >> undefined
The following figures are extracted of incomplete contract from the books of Sahara Construction Limited, Mumbai for the year ended 31st March, 2018 :
| Contract price | Rs.10,00,000 |
| Work certified | Rs. 7,50,000 |
| Work uncertified | Rs. 50,000 |
| Cash received from contractee. | 80% of work certified |
| Notional profit | Rs. 3,00,000 |
You are required to find out the amount of Profit and reserve.
Concept: undefined >> undefined
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