Where considered necessary, suitable assumptions may be made and clearly indicated in the respective answer. Answer Question No. I and any five from Question No, 2, 3, 4, 5, 6, 7 and 8. SECTION-A Answer Question No.1, which is compulsory. 1. Choose the correct answer from the given alternatives (You may write only the Roman numeral and the alphabet chosen for your answer). 2x 15=30 (i) Which of the following is applicable for cost control? (A) Itis a comective funetion, (B) Itis related with the future. (C) Itchallenges the standard cost, (D) Lends when the targets are achieved. (ii) Under integral accounts, issue of direct material is debited to the following account: (A) Purchase account (B) Stores ledger control account (C) Factory overhead control account (D) Work-in-progress control account Gili) Product ‘X° generates a contribution to sales ratio of 40%. Fixed costs directly attrib- table to *X’ amounts to ® 60,000 per month. The sales required to achieve a monthly profit of € 12,000 will be (A) © 1,87,500 (B) & 2,00,000 (© € 1,65,000 (D) & 1,80,000 (iv) The most suitable cost system where the products differ in type of materials and work performed i: (A) Batch Costing (B) Job Costing (©) Process Costing (D) Operating Costing 29255 Please Turn OverBCA) (2) Syllabus 2022 w) (i), (vii) The sales amount of Product (iii) (in) Primary packing is a part of (A) Direct material cost (B) Production cost (©) Selling overhead (D) Distribution overhead Cash Budget of PQR & Co. forewams of a short-term surplus. Which of the following would be the appropriate action to be taken in such a situation? (A) Purchase new fixed assets (B) Repay long-term loans (©) Pay creditors early to obtain a cash discount (D) Write-off preliminary expenses is @ 1,00,000. Its variable cost is € 49,000 and fixed cost is & 50,000. The amount of BEP sales will be (A) % 60,000 {B) % 50,000 (©) %83, (D) % 90,000 Which of the following does not form part of prime cost? (A) Cost of packing (B) Overtime premium paid to workers (©) GST paid on raw maierials (input credit can be claimed) (D) Cost of transportation paid to bring materials to factory § & Co., which is using batch costing, provides the following information: ‘Annual demand for the components 4,800 units Setting up cost per batch 250 ‘Manufacturing cost per unit = 100 Carrying cost per unit 12% por anmum On the basis of the above, Economic Batch Quantity of the firm is (A) 100 units (B) 200 units (©) 300 units (D) 400 units@) PHC) Spllabus 2022 G) “The method of apportioning joint costs on the basis of output of exch joint product at the point of split-off is known as— (A) Physical unit method (B) Average cost method (C) Sales value method (DP) Marginal cost and contribution method Ce) 10 2 process 12,000 unis are introduced during a period, 5% of input is normal loss, Closing work-in-progress 60% complete is 1,500 units, 9,900 completed units are transferred to next Process, Equivalent production for the Period is (A) 13,500 units (B) 11,160 units (©) 8,100 units (D) 10,800 units (sti) Time allowed for a job is 80 hours. A worker takes 68 hours to complete the job. ‘Time rate per hour is € 15, ‘Total eamings of the worker under the Rowan Bonus Plan is (A) € 1,020 @B) & 1,200 © 1173 (D) 21,110 (ili). Following information is available: Overhead incurred % 3,00,000 Overhead recovered % 2,00,000 Cost of sales &5,00,000 Finished goods 4,00,000 Work-in-progress %3,50,000 {rom the above, Supplementary Overhead Rate o recover the under-absorbed overhead is (A) © 0.20 @) € 0.25 (© € 0.08 (D) F029PCA) (4 Syllabus 2022 (xiv) Which of the following Cost Accounting Standards (CASs) deals with Determination of Average (Equalized) Cost of Transportation? (a) CAS-5 (B) CAS-6 (© CAS-9 (D) CAS-16 (xv) Tstandard hours for 100 units of output ere 800@ & 4 per hour and actual hours taken are 760 @ € 4.50 per hour, then the Labour Rate Variance 18 — (A) & 480 (Adverse) (B) % 400 (Adverse) (©) © 380 (Adverse) (D) © 100 (Favourable) SECTION-B “Answer anty five questions from question number 2 (0 8. Bach question carries 14 marks L4x5 = 70 2. (@) Sun & Moon Lid. (SML) is leading hardware manufacturing SAP Te manufactured and sold 200 computers in the year 2022, ‘The summarised Trading und Profit & Loss ‘Account of SML for the year 2022 is as follows: ‘Total Output (im units) = 200 as 1 [Particulars [= Particulars z “To Cost of Material consumed | 12,00,000 | By Sales a | 600,000 | To Direet Wages 18,00,000, | To Manufacturing Charges | 7,50,000 | To Gross Profit eld 22,50,000 _| | _ 60,00,000 _ 60,00,000 | To Management Expenses 9,00,000 | By Gross Profit b/d a 22,50,000 | To General Expenses 3,00,000 To Rent, Rates & Taxes 150,000 | ‘To Selling Expenses 4,50,000 | ToNet Profit 450,000 % | 22,50,000 | _22,50,000 |©) P-8(G4) ‘Syllabus 2622 ‘The managemont of SML estimated the following facts for the yeer 2023 1. The output and sales will be 300 computers. Price of material will rise by 25% compared to previous year level. PS Wages per unit will rise by 10%, Manufacturing charges will increase in proportion to the combined cost of material ES and wages. 5. Selling expenses per unit will remain unchanged 6. Other expenses will romain unaffected by the rise in output, Required: @ Propare a Cost Shicet for the year 2023, Gi) Suggest a Selling Price per unit to earn a profit of 20% on selling price. 7 (b) The management of Dolphin Ltd. wants to know the profit losi/forgone as a result of labour turnover last Year. Last year, sales accounted to & 66,00,000 and the P/V ratio was 20%, The total number of actual hours worked by the. direct labour force was 3,49,000, As a result of the delays by the personnel department in filling vacencies due to labour tumover, 75,000 potentially productive hours were lost. The actual direct Tabour hours included 30,000 hours attributable to training new recruits, out of which half of the hours were unproductive. ‘The cost incurred consequent on labour tumover revealed on analysis the following: @ Settlement cost due wo leaving 25,000 Recruitment costs 18,000 Selection costs 20,500 Training costs 16,000 Assume that the potential production lost due to labour turnover could have been sold at prevailing prices, Required: Ascertain the profit lost/forgone last year on account of labour tumover. 7RiBHCA) (6) Syllabus 2022 3. (a) ACB Ltd. manufactures product “A”, at the rate of 80 picees per hour. The company has been producing and solling 1,60,000 units annually since last five years. However, during the current year, the company was able to produce 1,46,000 units only ‘The company’s annual fixed overheads for the cusrent year amounted to 5.84,000. "The company. works on single shift only at 8 hours per day and 6 days a week. The company hed declared 13 holidays. ‘The quarterly preventive maintensmee and repairs work involved 77 hours. Required: (i) Calculate the Maximum, Practical, Normal and Actual Capacities for the current year in terms of hours. G® Calculate Idle Capacity Hours. Git) Compute Hourly Rate for Recovery of Overhead Rates for each of the eapacisies computed at (i) above. (Assume 365 days and 92 Sundays during the current year) 1 (b) Essbee 11d, meintains Tntegrated Accounts of Cost and Financial Accounts. Journalize the following transactions in the books of the firm: yz (narration is not required) Particulars Amount @) Raw material purchased on eredit 8,00,000 Direct materials issued to production 6,00,000 | Wages paid (20% indirect) 4,80,000 Wages charged to production 3,36,000 ‘Manufacturing expenses incurred 3,80,000 Manufacturing overhead charged to production 3,60,000 Selling and distribution cost 80,000 Finished products (st cost) 8,00,000 | Sales 11,60.000 | Receipts from debtors 2,76,000a) P-8(CA) Syllabus 2022 4. (a) Maxwell Hospital runs a Diabetic Care Centre (DCC) in a hired building. The DCC consists of 50 beds and 10 more beds can be added, if required in emergency. Further information regarding DCC is as under: Rent per month: — © 1,50,000 Supervisors 2 persons @ & 50,000 per month cach Nurses: 4 persons @ € 30,000 per month each Ward Boys: 4 persons @ & 6,000 per month each Doctors were paid & 2,50,000 per month on the basis of number of patients attended and the time spent by them. Other expenses for the year are as follows Repairs (fixed): 90,000 Food to patients (variable): €8,80,000 Other services to patients (variable): &3,00,000 Laundry charges (variable): %6,00,000 Medicines (variable): %7,50,000 Other fixegl expenses: %15,00,000 Administration expenses allocated: % 12,00,000 Itis estimated that for 150 daysin @ year, 50 beds are occupied and 40 beds are ogeupied for 80 days only. ‘The hospital hired 750 bed days at a charge of € 100 per bed per day to accommodate the flow of patients. However. this does not exceed more than 10 extra beds over and above the normal capacity of $0 beds on any day. ‘The hospital recovers on an average € 1,500 por day from each patient. Required to calculate the following: (W, Profit for the year. Gi) Contribution per Patient Day. (iii) Break Even Point (BEP) for the hospital. 7P-8(CA) (s) Syllabus 2022 (b) Mohit is a leading civil contractor who prepares his accounts on 31st March each yeur. He commenced a Contract No, 225 on Ist July, 2022. The following information is revealed from his costing records on 31st March, 2023: Particulars ® ‘Materials Cost 3,859,000 Labour Cost 4,45,600 Foreman’s salary 67,300 A machine costing & 2,60,000 remained in use on site for two-fifth of the year. Its working life is estimated at 7 years and final scrap value at 15,000. A supervisor is paid © 8,000 per month and has devoted one-half of his time on the contract. All other expenses amount to 7 136,500. Materials at site on 31st March, 2023 cost € 35,400, ‘The contract price is Z 20,00,000. On 31st March, 2023 two-third of the contcact was completed, however, the architect gave certificate only for 50% of the contract price and © 7,50,000 had so far been paid on account. Prepare Contract Account und show the amount of profit o be credited to the Profit and Loss Account, 7 (@) “Super Bite” is a leading product in the confectionery market which is obtained after it has gone through three distinct processes — X, Y and Z. The following information is obtained from cast records of Super (Indiz) Lid. for the month of July, 2023: [" Particulars Process X | Process Y | Process Z, Input of raw materials @ %30 per unit (units)| 1,000 ats = Other materials @) 26,000 | 19,800 | 29,620 Direct wages @) | 20,000. | 30,000, | 40,000 Normal loss of input y 5% 10% 15% Output (units) 950 840 750 Sale of serap per unit (®) 2 | 40 50) ye () PCH) ‘Syllabus 2022 Total overheads are € 90,000 which are recovered at 100% of wages. Required: Prepare different Process Accounis of the firm for July 2023, 7 Delta Ltd. furnishes the following information: ‘The standard mix to produce one unit of product ‘R’ is as under - Material X 3 kg @ % 300 per kg Material Y 4 kg @ &500 per kg Material Z 5 kg @ % 400 per kg During the month of June 2023, 10 units of product ‘R? were actually produced and consumption was as under - Material X 32 kg @ & 350 per kg Material Y 47.5 kg @ & 550 per kg Material Z 43.5 kg @ % 360 per kg Required: Calculate the following Material Variances: Gi) Material Cost Variance (i) Material Price Variance Gii) Material Quantity Variance Gv) Material Mix Variance (vy) Material Yield Variance 7P-8(CA) (0) Syllabus 2022 6. New Vistas Ltd, is manufacturing three household products X,Y and Z and selling them in competitive market. The following details regarding current demand, selling price and cost structure are extracted from the records of the company for the year ending March, 2023: Particulars x ¥ z Expected demand (onits) 20,000 24,000 | 49,000 | | Selling price per unit @) 40 32 20 Variable cost per unit @) Direct materials (& 20/kg.) LD 8 4 Direct labour _(& 30/hr.) 6 6 3 | Variable overheads 4 2 Fined overheads per unit @) 10 8 4 The company is frequently affected by acute scarcity of raw material and high labour turnover. During the next year, itis expected to have one of the following situations: (a) Raw materials available will be only 24,200 kg. (b) Direct labour hours available will be only 10,000 hours. Required: Calculate Net Profit of the company in each of the above situations. 4 7. (a) Easy Walk Ltd, produces and sells a single product. Sales budget for calendar year 2022 by quarters is as under: Quarters First Second Third Fourth No. of units to be sold 40,000 48,000 60,000 72,000 ‘The year is expected to open with an inventory of 12,000 units of finished products and close with inventory of 16,000 units. Production is customarily scheduled to provide for 10% of the current quarter's sales demand plus 30% of the following quarter demand, ‘The budgeted selling price per unit is € 40 end variable cost per unit is € 35. Fixed Overheads are © 4,40,000 which are evenly distributed throughout the yeer.(ty P-8(CA) Syllabus 2022 Required: () Prepare Quarterly Production Budget for the year. Gi) Caleulate in which quarter of the year company is expected 10 achieve Break Even Point (BEP) 7 () Write answers of the following: (i) Objectives and Functions of. ‘Cost Accounting Standards Board, i) Scope of CAS — 4 on Cost of Production for Captive Consumption, 7. 5: (@) Whatis a Responsibility Centre? What are differont types of Responsibility Centres? 4 (©) Whatis Bill of Materials? What arc basic purposes of preparing a Bill of Materialy? 5 (©) What is Overtime Wages as per CAS ~ 7? How do you treat overtime wages in Cost Accounts as per CAS-7? 5née a = - a : ue - - —— : sey ob pitta mt eae ape dent er ee ut r / AR) a eet : ; fle scp tren 4A) Spe hahaa? peas et aanze hare tbaRAO ab t § petiemmmaniGh eet vit naleashen uterine’ — LAO Se te aaa mbes ee ee @ 2 + Fl melo Uae gine Wenig ln es ah) Tis aS ME we vt agp eins Acme re ect = BAD ig See? wert a ae Bi 2 4 AD tog a naa