Or
(b) How does management accounting help in decision-making? Explain.
2. (a) Describe in detail the methods of wage payments for an industrial concern.
Or
(b) A machine was purchased on January 1, 2009 for Rs 10 lakh. Estimated life of the machine is 10 years and scrap value at the end of 10 years is Rs 10,000. Repairs and Maintenance – Rs 4,000 p.a.; Estimated number of working hours – 8000 p.a.; Insurance premium – Rs 8000 p.a.; Electricity consumption 50 units per hour (@ 75 paise per unit); Rent per month – 1,600; Lighting charges for 20 points for the whole department (out of which 3 points are for the machine) – Rs 240 p.m.Compute the machine hour rate.
3 (a) From the following information, prepare a statement of cost and profit of a television manufacturing company :
Particulars
|
Amount
|
Stock of materials on 1.1.2009
Stock of materials on 31.12.2009
Purchase of materials
Direct wages
Factory expenses
Establishment expenses
Completed stock in hand on 1.1.2009
Completed stock in hand on 31.12.2009
Sales
|
35,000
49,000
52,500
95,000
17,500
10,000
Nil
35,000
1,89,000
|
The number of TV manufactured during the year 2009 was 4000. The company wants to quote for a contract for the supply of 1000 TV during the year 2010. The TV to be quoted are of uniform quality and similar to those manufactured in the previous year; but cost of materials has increased by 15% and cost of factory labour by 10%.
You are also to prepare a statement showing the price to be quoted to give the same percentage of net profit. Solution available Here
Or
(b) What do you mean by operating costing? Explain its characteristics and assumptions.
Or
(b) A company has annual fixed costs of Rs 7,00,000. In 2008, sales amounted to Rs 30,00,000 as compared with Rs 2,50,000 in 2007 and profit in 2008 was Rs 2,10,000 higher than in 2007.
(i) At what level of sales does the company break-even?
(ii) Determine profit or loss on present sales volume of Rs 40,00,000.
(iii) If there is reduction in selling price in 2009 by 10% and the company desires to earn the same profit as in 2008, what would be the required sales volume? Solution available here
Or
(b) For production of 10000 mobile handsets, following are budgeted expenses :
Per unit Rs.
| |
Direct materials
Direct labour
Variable overheads
Fixed overheads (Rs 1,50,000)
Variable expenses (direct)
Selling expenses (10% fixed)
Administrative expenses (Rs 50,000 fixed for all level of production)
Distribution expenses 20% fixed
|
60
30
25
15
5
15
5
5
|
Total cost of sales per unit
|
160
|
Prepare a budget for production of 6000, 7000 and 8000 mobile handsets, showing distinctly marginal cost and total cost. Solution available here