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CMA Assignment

The document outlines various accounting concepts including the distinction between period and product costs, break-even analysis, and cost-volume-profit analysis. It also includes practical applications such as preparing a cost sheet, flexible budget, and cash budget based on provided financial data. Additionally, it discusses factors influencing selling prices and the importance of understanding marginal costing terms like P/V ratio and margin of safety.

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aadeeshs23
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13 views3 pages

CMA Assignment

The document outlines various accounting concepts including the distinction between period and product costs, break-even analysis, and cost-volume-profit analysis. It also includes practical applications such as preparing a cost sheet, flexible budget, and cash budget based on provided financial data. Additionally, it discusses factors influencing selling prices and the importance of understanding marginal costing terms like P/V ratio and margin of safety.

Uploaded by

aadeeshs23
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1. Distinguish between period costs & product costs?

Why is this distinction considered


important?
2. What do you understand by the term Break-even analysis? Enumerate its assumptions?
3. Discuss the following terms in relation to marginal costing:
(a) P/V ratio (b) Margin of Safety

4 What do you understand by the term Cost-Volume-Profit analysis? Enumerate its uses.
5. List the factors to be taken into consideration in fixing the selling price of a product?

6. Prepare a cost sheet from the following data:


Particulars Amt.(Rs. ‘000)
Opening Stock of Raw Materials 25,000
Office Salaries 2,500
Office Rent & rates 500
Purchase of Raw Materials 85,000
Indirect Consumption of Material 500
Carriage Inward 5,000
Direct Wages 75,000
Other Direct charges 15,000
Depreciation of Plant 1,500
Closing Stock of raw Materials 40,000
Other Office Expenses 900
Indirect Wages 10,000
Managing Director’s remuneration 12,000
Other Selling expenses 1,000
Sales 250,000
Rent & rates factory 5,000
Salesmen Salaries 2,000
Other factory Expenses 5,700
Depreciation on Office Furniture 100
Travelling expenses of salesman 1,100
Interest on borrowed funds 100
Advance income tax paid 15,000
Carriage and freight outward 1,000
Advertisement expenses 1,500
Bad debts 500
The time allotted by the managing director to visit the factory, office and selling department is
in the ratio 4:2:6
7. Brilliant Ltd. is engaged in production of certain products. 100% capacity being 10,000 units
per month. Following is the information for the just concluded previous two months:
Month 1 Month 2
Units Produced 6,000 9,000
Costs (other than Direct material and Direct labour) Rs. Rs.
Salaries 30,000 30,000
Power 30,000 39,000
Consumable Stores 30,000 45,000
Repair 40,000 46,000
Indirect Shop Labour 15,000 22,500
Depreciation 25,000 25,000
Inspection 10,000 13,000

Following is the further information:


1. Rate of production per hour is 10 units
2. Direct material costs are Rs. 20 per unit
3. Direct labour costs are Rs. 80 per hour
Prepare a Flexible budget, showing distinctly fixed cost, variable cost and semi variable costs
separately at 100%, 80% & 50% capacity utilization levels respectively. (10
marks)

8 Taurus Ltd. produces three products A, B & C from the same manufacturing facilities. The
cost and other details of the three products are as follows:
A B C
Selling price per unit (Rs.) 200 160 100
Variable Costs per unit (Rs.) 120 120 40
Maximum production per month (units) 5,000 8,000 6,000
(Total hours available for the month –
200 hours)
Budgeted Production in units (based on 2,000 4,000 2,400
maximum demand per month)
Total Fixed Costs per month: Rs. 276,000
Required: (10 marks)
a. Assuming the same proportion of units of the products as budgeted is maintained,
compute the BEP in units and Rupees (Total & by product line).
b. If the processing hours available per month is restricted to 200 hours, determine the
optimal product mix and the profit.

9 From the following information you are required to prepare a Cash Budget for the period Jan
– Apr:
Month Sales Materials Wages Selling & Production Administration
(Rs.) (Rs.) (Rs.) Distribution Overheads Overheads
Overheads (Rs.) (Rs.)
(Rs.)
Dec 72,000 25,000 10,000 4,000 6,000 1,500
Jan 97,000 31,000 12,100 5,000 6,300 1,700
Feb 86,000 25,500 10,600 5,500 6,000 2,000
Mar 88,000 30,600 25,000 6,700 6,500 2,200
Apr 102,500 37,000 22,000 8,500 8,000 2,500
May 108,700 38,800 23,000 9,000 8,200 2,500

Following is the additional information:


Cash Balance as on Jan 1st is Rs. 72,500
i. 50% of the sales are on cash basis. Credit sales are collected in the month following
the sale.
ii. Creditors (for goods, services, and overheads) grant one month credit.
iii. Sales commission @ 3% on sales is to be paid (lag of 1 month)
iv. Assets of Rs 8,000 and Rs 25,000 to be acquired in Feb and April respectively
v. An application for loan of Rs. 30,000 has been made and it is anticipated to be
received in April
vi. Proposed dividend Rs. 35,000 to be paid in May.
You are required to prepare: Cash Budget for the period Jan to April

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