## Solution of Assignment Synopsis & Project Dissertation Report

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 Title Name Amity Solved Assignment BBA 6th Sem for Cost and Managerial Accounting assignment 3 University AMITY Service Type Assignment Course B.B.A Semester Semester-VI Course: B.B.A Short Name or Subject Code Cost & Managerial Accounting Commerce line item Type Semester-VI Course: B.B.A Product Assignment of B.B.A Semester-VI (AMITY) Price PRICE INR Click to View Price

## Questions:-

Assignment A

1. ‘Cost accounting is becoming more and more relevant in the emerging economic scenario in India’. Comment.

Ans:

1. ‘ An efficient system of costing is essential factor for industrial control under modern conditions of business and as such may be regarded as an important part in the efforts of any management to secure business stability’. Elaborate.

Ans:

1. From the following transactions extracted from the books of accounts of a manufacturing concern as on 31 April 2011. Work out a) consumption value of raw material in the month and b) value of closing stock as on 31 April 2011 under the FIFO method of pricing issues:
 Quantity in Units Rate per unit (Rs.) 2010 April 1 Opening Stock 300 9.7 2010 April 3 Purchases 250 9.8 2010 April 11 Issues 400 2010 April 15 Purchases 300 10.5 2010 April 20 Issues 210 2010 April 25 Purchases 150 10.3 2010 April 29 Issues 100

Ans.

1. consumption value of raw material in the month

Ans 300*9.7 + 250*9.5 + 160*10.5=6965 Ans

1. value of closing stock  as on  31 April 2011

Ans :-

1. From the following information prepare a cost sheet showing cost profit per unit

Direct materials consumed                                   Rs.4, 00,000

Direct labour                                                         40% of direct material cost

Direct expenses                                                     50% of direct labour cost

Factory overheads                                                 25% of prime cost

Office and admin expenses are @ Rs.150 per 10 units produced

Selling & distribution overheads are Rs. 500 per 100 units sold

Opening finished stock                                         800 units @ Rs.85.50

Closing stock                                                        400 units

Finished goods sold                                              16,400 units

Profit                                                                     1/6th of sales

Ans.

1. Answer any three questions of the following:
2. Explain product cost and period cost with 2 examples of each

Ans:

1. What is meant by direct material cost?

Ans.

1. Find out the cost of raw material purchased from the data given below:
 Particular Amount Prime cost 200000 Closing stock of raw material 20000 Direct labour cost 100000 Expenses on purchases 10000

Ans:

1. Define batch costing. Give examples of industries which adopt batch costing.

Ans.

Assignment B

1. Mosaic Co. Ltd has three production depts A, B & C and two service depts D & E. Info:

Rent Rs. 5000                               Indirect wages Rs. 1500

Power Rs.1500                              Depreciation of Machinery Rs.10000

General lighting Rs. 600               Sundry expenses Rs. 10000

 Floor space (sq.ft.) Light points Direct wages (Rs.) H.P. of machines Value of machines (Rs.) Total A B C D E 20000 120 10000 150 250000 4000 20 3000 60 60000 5000 30 2000 30 80000 6000 40 3000 50 100000 4000 20 1500 10 5000 1000 10 500 - 5000

Prepare a statement showing distribution of overheads to various departments.

Ans:

1. The following information is provided to you:

Selling price per unit        Rs. 40

Variable cost                     Rs. 24

Fixed costs                        Rs. 6

Profit                                 Rs. 10

Present sales volume is 2000 units

Calculate:

(a) P/V ratio (b) BEP (c) Margin of safety   (d) profit at a sales volume of 2500 units (e) sales required to earn a profit of Rs. 26,000

Ans

1. What are budget and budgetary control? Discuss the advantages and essential for success of budgetary control.

Ans:

Read the case below and answer the questions given at the end

Case Study

Coffee Cart Supreme sells hot and iced coffee beverages and small snacks. The following is last month’s income statement.

 Particulars Amount \$ Amount \$ Revenue 5000 Cost of Beverage & snacks 2000 Cost of napkins, straws etc 500 Cost of rent cart 500 Employee wages 1000 4000 Pre tax profit 1000 Taxes 250 After tax profit 750

Questions

1. What is the total cost function for Coffee Cart Supreme? What is the tax rate for Coffee Cart Supreme?

Ans.

1. Calculate the amount of sales needed to reach a target after-tax profit of \$1,500.

Ans.

1. What was Coffee Cart Supreme’s degree of operating leverage and Coffee Cart Supreme’s margin of safety in revenue last month?

Ans.

Assignment C

Tick mark (√) the most appropriate answer.

1. Which of the following statement measures the financial position of the entity on particular time?
2. Income Statement
3. Balance Sheet
4. Cash Flow Statement
5. Statement of Retained Earning
6. The Process of cost apportionment is carried out so that--
7. Cost may be controlled
8. Cost unit gather overheads as they pass through cost centers
9. Whole items of cost can be charged to cost centers
10. Common costs are shared among cost centers
11. Direct materials cost is Rs. 80,000. Direct labor cost is Rs. 60,000. Factory overhead is Rs. 90,000. Beginning goods in process were Rs. 15,000. The cost of goods manufactured is Rs. 245,000. What is the cost assigned to the ending goods in process?
12. 45,000
13. 15,000 Rs.
14. 30,000
15. There will be no ending Inventory Solution:

4.When prices are rising over time, which of the following inventory costing methods will result in the lowest gross margin/profits?

FIFO

LIFO

Weighted Average

Cannot be determined

5-The main difference between the profit center and investment center is--

Decision making

Revenue generation

Cost in occurrence

Investment

6-Which of the following is a characteristic of process cost accounting system?

Material, Labor and Overheads are accumulated by orders

Companies use this system if they process custom orders

Opening and Closing stock of work in process are related in terms of completed units

Only Closing stock of work in process is restated in terms of completed units

7-Which of the following manufacturers is most likely to use a job order cost accounting system?

A- soft drink producer

B- flour mill

C-textile mill

D- builder of offshore oil rigs

8-Production volume of 1,200 units cost incurred Rs. 10,000 and production volume of 1,400 units cost incurred Rs.20, 000. The variable cost per unit would be?

50.00 per unit

8.33 per unit

14.20 per unit

100 per unit

1. Cost accounting concepts include all of the following EXCEPT--

10- The main purpose of cost accounting is to--

1. Maximize profits
2. Help in inventory valuation
3. Provide information to management for decision making
4. Aid in the fixation of selling price
1. Period costs are --

A-Expensed when the product is sold

B-Included in the cost of goods sold

C-Related to specific Period

D-Not expensed

1. An organization sold units 4000 and have closing finished goods 3500 units and opening finished goods units were 1000.The quantity of unit produced would be--

7500 units

6500 units

4500 units

5500 units

1. Examples of industries that would use process costing include all of the following EXCEPT--

Beverages

Food

Hospitality

Petroleum

1. The components of the prime cost are--
1. Direct Material + Direct Labor + Other Direct Cost
2. Direct Labor + Other Direct Cost + FOH
3. Direct Labor + FOH
4. None of the given options
1. Opportunity cost is the best example of--

Sunk Cost

Standard Cost

Relevant Cost

Irrelevant Cost

1. Fixed cost per unit decreases when--

Production volume increases.

Production volume decreases.

Variable cost per unit decreases.

Variable cost per unit increases.

1. Prime cost + Factory overhead cost is--

Conversion cost.

Production cost.

Total cost.

None of given option.

1. Find the value of purchases if Raw material consumed Rs. 90,000; Opening and closing stock of raw material is Rs. 50,000 and 30,000 respectively.

10,000

20,000

70,000

1,60,000

1. Annual requirement is 7800 units; consumption per week is 150 units. Unit price Rs 5, order cost Rs 10 per order. Carrying cost Rs 1 per unit and lead time is 3 week, The Economic order quantity would be--

365 units.

300 units

250 units

150 units

1. For which one of the following industry would you recommend a Job Order Costing system?
1. Oil Refining
2. Grain dealing
3. Beverage production
4. Law Cases
5. ______________ method assumes that the goods received most recently in the stores or produced recently are the first ones to be delivered to the requisitioning department.

21-FIFO

1. Weighted average method
2. Most recent price method
3. LIFO

22. Cost of production report is a _________________.

1. Financial statement
2. Production Process report
3. Order Sheet
4. None of above

.

1. Opening work in process inventory can be calculated as under--

FIFO and Average costing

LIFO and Average costing

FIFO and LIFO costing

None of given option

1. Jan 1; finished goods inventory of Manuel Company was Rs.3, 00,000. During the year Manuel’s cost of goods sold was Rs. 19, 00,000, sales were Rs. 2, 000,000 with a 20% gross profit. Calculate cost assigned to the December 31; finished goods inventory.

4,00,000

6,00,000

16,00,000

None of given options

1. The cost expended in the past that cannot be retrieved on product or service--
1. Relevant Cost
1. Sunk Cost
1. Product Cost
1. Irrelevant Cost
1. When a manufacturing process requires mostly human labor and there are widely varying wage rates among workers, what is probably the most appropriate basis of applying factory costs to work in process?

Machine hours

Cost of materials used

Direct labor hours

Direct labor dollars

1. A typical factory overhead cost is--
1. Audit
1. Compensation of plant manager
1. Design distribution
1. Internal
1. Complete the following table--
1. Constant, Decrease
1. Decrease, Decrease
1. Increase, Increase
2. Increase, Decrease.
1. The Kennedy Corporation uses Raw Material Z in a manufacturing process. Information as to balances on hand, purchases and requisitions of Raw Material Z is given below--

If a perpetual inventory record of Raw Material Z is maintained on a FIFO basis, it will show a month end inventory of--

1. \$240
1. \$784
1. \$759
1. \$767
1. The difference between total revenues and total variable costs is known as--
1. Contribution margin
2. Gross margin
3. Operating income
4. Fixed costs
1. Percentage of Margin of Safety can be calculated in which one of the following ways?
1. Based on budgeted Sales
2. Using budget profit
3. Using profit & Contribution ratio
4. All of the given options
1. Which of the following represents a CVP equation?

Sales = Contribution margin (Rs.) + Fixed expenses + Profits

Sales = Contribution margin ratio + Fixed expenses + Profits

Sales = Variable expenses + Fixed expenses + profits

Sales = Variable expenses – Fixed expenses + profits

1. For which one of the following industry would you recommend a Process Costing system?

Grain dealer

Television repair shop

Law office

Auditor

1. If 120 units produced, 100 units were sold @ Rs. 200 per unit. Variable cost related to production & selling is Rs. 150 per unit and fixed cost is Rs. 5,000. If the management wants to decrease sales price by 10%, what will be the effect of decreasing unit sales price on profitability of company? (Cost & volume profit analysis keep in your mind while solving it)

Remains constant

Profits will increased

Company will have to face losses

None of the given options

1. If 120 units produced, 100 units were sold @ Rs. 200 per unit. Variable cost related to production & selling is Rs. 150 per unit and fixed cost is Rs. 5,000. If the management wants to increase sales price by 10%, what will be increasing sales profit of company by increasing unit sales price? (Cost & volume profit analysis keep in mind while solving)

2,000

5,000

7,000

None of the given options

1. 36. What is the company´s contribution margin ratio?

30%

70%

150%

None of given options

1. 37. What is the company´s break-even in units?

48,000 units

72,000 units

80,000 units

None of the given options

1. How many units would the company have to sell to attain target profits of Rs. 600,000?

88,000 units

100,000 units

106,668 units

None of given options

1. What is the company´s margin of safety in Rs?

480,000

1,600,000

2,400,000

None of given options

1. Inventory control aims at--

a) Achieving optimization

b) Ensuring against market fluctuations

c) Acceptable customer service at low capital investment

d) Discounts allowed in bulk purchase

## 4.8 / 5

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January 29, 2015