4027 2 1. @© Enumerate the practical difficulties invotved in installing a costing system in a manufacturing concern. 7) © Keshav Ltd, Manufactures picture tubes of T.V. The following particulars are available for the year 2022. Average monthly market demand 2000 tubes Ordering costs £200 per order Inventory carrying cost 20% per annum Cost of tubes £260 per tube Normal u 100 tubes per week Minimum usage 50 tubes per week Maximum usage 150 tubes per week Re-order period 6-8 weeks Compute the following (@ Economic order quantity (i) Re-order level (ii) Maximum stock level (iv) Minimum stock level OR (a) From the following transactions, prepare a of July 2022, ag(b) 3 July Opening stock 200 units @ 45 per unit — July4 Purchases GRN-574 150 units @ 46 per unit July S Issued SR-220 100 units July 10 Purchases GRN- 578 200 units @ 46.50 per unit July 20 Issued, SR- 140 units July25 Purchases. GRN-S60 150 units @ 48 per unit July 30 Issued SR- 224 150 units July 31 Return of 10 units purchased on July 25 é Find out the value of stock as on 31" July 2022 if company follows perpetual: m inventory method by FIFO Distinguish between ( Sunk cost and Out-of-pocket cost (ii) Opportunity cost and Imputed cost (iii) Controllable and Uncontrotlable cost (iv) Variable and Fixed cost 0 semetea(Gi) Employer's contribution to provident fund 8% of salary and D.A. to ESI 4% of salary and D.A. (iv) Bonus 20% of salary and D.A. (¥) Other allowances 22,725 per annum A, an employee works for 2000 hours per annum, out of which 175 hours are non-productive but are treated as normal idle time. You are required to (s) find out effective hourly cost of A ® X furnishes the following data related to the product red’s manufacturing for May 2022 Stock of raw material as on 1" May 265,000 Stock of raw material as on 31" May 291,000 Direct labour charges 764,500 Indirect labour charges 256,400 Purchase of raw materials 245,000 Freight inward %115,600 Other expenses on purchases 212,500 Freight outward 210,500 Advertising 228,000 Sale of scrap ° 81,800 Office rent and rates 254,000, Commission on issue of shares Serene15,400 317,00 222,850 11,000 66,000 54,600 248,000 he ratio of 20:80) (a0) following expenditure Sundry Expenses 215,000 Establishment Charges 210,000 The contract was started on |* Jan. 2 and the contract price was %10,00,000. Cash received on account to date was %4,80,000 representing 80% of work certified, the remaining 20% being retained until completion. The value of plant on 31st December, 2022 was %20,000 and the value of materials in hand was £6,000. The cost of work finished but not certified on the said date was 850,000. Some of the matetials costing £20,000 were found unsuitable and were sold {16,000 and a part of the plant costing 85,000 unsuited to the contract, (Seer4027 6 for the year that proportion of the estimated net profit to be realised on the contract which the value of work certified bore to the contract price. The estimates of further expenditure were as follows @) That the contract would be completed by 30th June, 2023 G@) That a further sum of £30,000 would have to be spent on the plant and the residual value of the plant on the completion of the contract would be 712,000. (ii) That material in addition to those in hand on 31st Dec., 2022 would eost 1,00,000 and that further sundry expenses of 87,000 would be incurred. (iv) Those further wages, for the completion of the contract, would amount to 21,69,900. (+) That the establishment charges would cost the same amount per month as in the previous year (vi) That 718,000 would be sufficient to provide for contingencies. Prepare contract account for the y sd 31st December 2022 and show the ulation of the amount to be credited to the Profit & Loss A/c for the year. Also show how the relevant figures would appear in balance sheet as on 31° Dec, 2022 as) (a) AB Ld is a manufacturing company having three production departments, A, B and C and two service departments X and Y. The overhead departmental distribution summary is as follows Total overhead as pet Primary distribution 6,300 7,400 A technical assessment departments is as under :© Dep. X Deptt. ¥ 20° pent’s expenses. k policy.” Elaborate and obsolete () o timated scrap value of 0 years. Annually the & hours every day of which About 1/7th of the total prod: up the machines Various costs relating to the working of the machine are as follows (@ Two units of power are consumed every hour at the rate of &7 per unit (i) Monthly cleaning and oiling expenses for the machine is €1,400 (iii) Annual maintenance of machine amounts to €14,000,8 ‘Compute machine hour rate in each of the following cases (@ Setting up time is regarded as productive but power is not consumed during setting up during setting up time (@) Setting up time is not regarded as productive but power is consumed ss with example 8) 220, 00,000. The effective life es for the bus insurance 260,00 215,000 26,000 pm Sala inductor (two conductors are engaged in one bus) 26,000 pm each Repair charges 210,000 pm. Office expenses 800 pm Petrol and oil cost is %5 per km. Normal capacity of passengers 50 Bus occupies 70% of the capacity and is expected to run $ round trips during 20 days in a month, In addition of above, driver and conductors are entitled to a commission of 5% ‘on takings. Calculate total and passenger fare per km, allowing 15% profit on takings F it Se9 oR The following data are available in respect of process | for March 2023 @ Opening stock of work in progress: 800 units at a total cost of 24,000 Degree of completion of opening work in progress Materials 100% Labour 60% Overheads 60) Input of materials at a total cost 236,800 for 9,200 units Direct wages incurred 216,740 Production overheads %8,370 Units scrapped: 1,200 units. The state of completion of these units was: Materials 100% Labour 80% Overheads 80% Closing work-in-process: 900 units, The stage of completion of these units was Materials 100% Labour 70% Overheads 70% °4027 Prepare (a) Statement of equivalent production, (b)_ Statement of cost, (c) Statement of evaluation using the FIFO method and (is) ) Process account ABC Ltd. has furnished the following information from the financial books for the year ended 31" March 2022 Particulars Amount (%) | Particulars ‘Amount @) Opening stock (500 Sales (10,250 units) | 28,70,000 units at 2140 each) 70,000 | C losing stock (250 Material consumed 10,40,000 | units at £200 each) Wates 6,00,000 | Interest actory overhead 3,79,000 | Rent received Administration 4,24,000 overhead Selling expenses 2,20,000 Bad debts 16,000 Preliminary 20,000 expenses Net profit 1,92,000 29,61,000 29,61,000, The cost sheet shows the cost of material at 7104 per unit and the labour cost at 260 per unit, The factory overheads are absorbed at ae abou ian(® A statement showing profit as per cost accounts for the year ended 31" march 2022 ¢ (ii) A statement showing the reconciliation of profit as disclosed in cost accounts with the profit shown in financial accounts. ° (b) Explain the treatment of following items in cost accounts (@ Packing charges Gi) Research and development cost. (iii) Royalty and patent fees (a) Write a note on (@ Methods of absorption of factory overheads. Gi) Activity based costing approach (S*2=10) (b) Pass journal entries in the cost books (integrated and non-integrated system) for the following transactions. (i) Purchase of raw materials (ii) Productive wages paid (ii) Material issued for repairs iv) Office expenses (Seer