` 16,667 ` 3,33,340. = 16, MT Truck: x = 14,167

Transcription

1 INTER CA MAY 2018 COSTING Topic: Operating Costing,, Budgetary Control, Integral and Non Integral, Cost Sheet, Process Costing, Materials. Test Code M21 Branch: MULTIPLE Date: (50 Marks) Note: All questions are compulsory. Question 1 (8 marks) Driver s Salary Depreciation Diesel Repairs & Maintenance Other Fixed Expenses Staff Expenses Particulars (3 marks) 10-MT Truck 8-MT Truck (a) Number of trips per truck per month 5 trips x 24 days = 120 trips. 5 trips x 24 days = 120 trips (b) Coal quality required to be brought 24,000 MT 24,000 MT (Given) (c) Quality per trip 120 trips x 10 = 1,200 MT 120 trips x 8 = 960 MT (d) Number of Trucks required (b c) 20 trucks 25 trucks (e) Number of Drivers required (d) x 2 40 Drivers 50 Drivers (f) Driver s Salary ` 6,000 pm [(e) x ` 6,000) ` 2,40,000 ` 3,00,000 (g) Depreciation per truck per month (Note) So, Depreciation for 20 and 25 trucks Working Notes on Cost Items Note: Depreciation per truck per month is calculated as under 10 MT Truck: x ` 16,667 ` 3,33,340 = 16, MT Truck: x = 14, Statement of Operating Costs per month (5 marks) Particulars Computation 10 Mt Truck 8 Mt Truck Note (f) 2,40,000 3,00,000 Note (g) 3,33,340 3,54,175 Note (j) 4,332,000 4,05,000 ` 60,000 x x 20 trucks = 1,00,000 ` 60,000 x = 5,000 ` 1,08,000 x = 9,000 ` 14,167 ` 3,54,175 (h) Kilometres covered per truck per month = 5 trips x 2 ways x 24 days x 6 kms = 1,440 kms (i) Kilometres covered by 20 and 25 Trucks 1,440 x 20 = 28,800 kms 1,440 x 25 = 36,000 kms (j) Diesel Cost ` 48,000 x x 25 trucks = 1,00,000 ` 36,000 x = 3,000 ` 1,08,000 x = 9,000 Total 11,19,340 11,71,175 Quality handled 24,000 MT 24,000 MT Cost per MT ` ` x ` 45 = ` 4,32,000 4,05,000 x ` 45 = ` 1 P a g e

2 Decision: Between 10MT and 8 MT Truck, 10 MT Truck is more economical. Hence, the company should switch over from existing carrier at ` 50 per MT to own fleet of 10 Mt trucks at ` per MT. Question 2 (8 Marks) Cost Sheet for the year ended 31 st October Particulars Computation ` Opening Stock of Raw Materials Add: Purchases & Carriage Inwards 20,000 2,50,000 Less: Closing Stock of Raw Materials (balancing figure) 2,70,000 (94,500) Direct Materials Consumed (by reverse working Add: Direct Labour Prime Cost Less Labour 1,75,000 2,22,250 PRIME COST Add: Factory Overheads (See Note below) GROSS FACTORY COST Add: Opening Stock of Working-in-Progress Less: Closing Stock of Working in-progress FACTORY COST (by reverse working) Add: Quality Control, R&D, Attributable AOH, etc. COST OF PRODUCTION (by reverse working) Add: Opening Stock of Finished Goods Sub Total = Cost of Goods Available for Sale Less: Closing Stock of Finished Goods COST OF GOODS SOLD (by reverse working) Add: Administration Overheads Add: Selling and Distribution Overheads COST OF SALES 3,97,750 x 40% 1,48,167 (balancing figure) ` 5,18,025 l (Not given in Question, hence Ignored) ` 5,55,775 - ` 37,750 (balancing figure) ` 5,25,000 (Not given in Question, hence Ignored) (Not given in Question, hence Ignored) (Sales Less 30%) 5,45,917 40,000 (67,892) 5,18,025 5,18,025 37,750 5,55,775 (30,775) 5,25,000 5,25,000 2,25,000 Add: Profit /(Loss) (30% of Sales given) SALES 7,50,000 Note: Cost Sheet format is first written, and the figures available in the question are filled up. The other figures are derived by reverse working and / or as balancing figures, Computation of Factory OH is as under Conversion Cost = Factory OH (i.e. Indirect Manufacturing Costs) + Direct Labour 100% = 40% of Conversion Costs (Given) + 60% of Conversion Costs (bal. figure) Since Direct Labour = 60% of Conversion Costs = ` 2, 22,250, Factory OH is calculated at 40% proportionately. Question 3 (8 Marks) 2 P a g e

3 (3 marks) (3 marks) Question 4 (8 Marks) 1. Process I (a) Statement of Equivalent Production (1 mark) Particulars Input Particulars Output Material Labour Overheads % E.U % E.U % E.U Fresh Units 40,000 Transfer to Pr- II 36, % 36, % 36, % 36,000 Normal Loss 2, P a g e

4 Closing WIP 2, % 2,000 50% 1,000 50% 1,000 TOTAL 40,000 TOTAL 40,000 38,000 37,000 37,000 (b) Computation of cost per Equivalent Unit (1 mark) Cost Element Totsl Cost Equivalent Units Cost Per equivalent Unit Direct Material Labour Factory Overheads Rs. 60,000 Rs. 12,000 Rs. 24,000 38,000 37,000 37, = = =0.65 TOTAL Rs. 96, =2.55 (c) Statement of Cost Apportionment (1 mark) Item Mati at Rs. 1.58/EU Lab at Rs.0.32/EU OH at Rs.0.65/EU Total Transfer to P-II 36,000*1.58=56,840 36,000*0.32=11,680 36,000*0.65=23,350 91,870 Closing WIP 2,000*1.58=3,160 1,000*0.32=320 1,000*0.65=650 4,130 TOTAL 60,000 12,000 24,000 96,000 (d) Process I Account (1 mark) Particulars Quantity Rs. Particulars Quantity Rs. To Direct Materials To Labour To Factory Overheads 40,000 60,000 12,000 24,000 By Process II transfer By Normal Loss By Closing WIP 36,000 2,000 2,000 91,870 4,130 TOTAL 40,000 96,000 TOTAL 40,000 96, Process II (a) Statement of Equivalent Production (1 mark) Particulars Input Particulars Output Material Labour Overheads % E.U % E.U % E.U Fresh Units 36,000 Transfer to FG 32, % 32, % 32, % 32,000 Normal Loss 1, Closing WIP 2, % 2,500 50% 1,250 50% 1,250 TOTAL 36,000 TOTAL 36,000 34,500 33,250 33,250 (a) Computation of cost per Equivalent Unit (1 mark) Cost Element Totsl Cost Equivalent Units Cost Per equivalent Unit Material Labour Factory Overheads Rs. 91,870 Rs. 16,000 Rs. 20,000 34,500 33,250 33, = = =0.60 TOTAL Rs. 1,27, =3.74 (b) Statement of Cost Apportionment (1 mark) Item Mati at Rs. 2.66/EU Lab at Rs.0.48/EU OH at Rs.0.60/EU Total Transfer to FG 32,000*2.66=85,220 32,000*0.48=15,400 32,000*0.60=19,250 1,19,870 Closing WIP 2,500*2.66=6,650 1,250*0.48=600 1,250*0.60=750 8,000 TOTAL 91,870 16,000 20,000 1,27,870 (c) Process II Account (1 mark) Particulars Quantity Rs. Particulars Quantity Rs. To Process I Transfer To Labour To Factory Overheads 36,000 91,870 16,000 20,000 By FG Control - transferred By Normal Loss By Closing WIP 32,000 1,500 2,500 1,19,870 8,000 TOTAL 36,000 1,27,870 TOTAL 36,000 1,27,870 Question 3 (8 Marks) 4 P a g e

5 Workings : (1 mark) monthly Production of X=30 000kgs Raw Material Required= =50 000kgs. 3 Material A= =30 000kg. 5 Material B= =20 000kg. 5 (i) Calculation of Economic Order Quantity (EOQ): (3 marks) Material A= 2 Annual consumption Order cost Carryings cost per unit p.a = kg. 12 months Rs of Rs.15 = = kg.or kg. Material B= kg. 12months Rs of Rs = = kg.or kg. *Purchase price + 2% Cst =Rs.22 +2% of Rs. 22=Rs (ii) Calculation of Maximum Stock level: Since, the Material A is perishable in nature and it required to be used within 5 days, hence, the Maximum Stock Level shall be lower of two: (2 marks) (a) Stock equal to 5 days consumption = kg. 25days 5 days=6 000kg. (a)maximum Stock Level for Material A: Re-order Quantity + Re-order level (Min consumption * x Min. lead time) Where, Re-order Quantity Re-order level = 8,000kg. =Max. Consumption* x Max. Lead time =30,000/25 x 2 days=2,400 kg. 5 P a g e

6 Maximum stock Level = 8,000kg.+ 2,400 kg. (30,000/25 x 1day) = 10,400-1,200 =9,200kg. Stock required for 5 days consumption is lower than the maximum stock level calculated through the formula.therefore,maximum Stock Level will be 6,000kg. (*Since,production is processed evenly throughout the month hence material consumption will also be even.) (iii) Calculation of Saving /loss in Material A if purchase quantity equals to EOQ (2 marks) Purchase Quantity= 8,000kg. Purchase Quantity = EOQ i.e. 6,197 kg. Annual consumption 3,60,000kg. 30,000 x 12 months) 3,60,000kg. 30,000 x 12 months) No. of orders [Note (i)] 60 (30, ,000) 60 (30, ,000) Ordering Cost(a) Rs.7,5200 (Rs.120 x 60) Rs.7,200 (Rs.120 x 60) Carrying Cost(b) [Note (ii)] Rs.8,100 (15% of Rs x 4,0000) Rs. 6,972 (15% of Rs.15 x 3,098.5) Purchase Cost (c) (for good portion) Rs.48,60,000 (Rs x 3,60,000) Rs.54,00,000 (Rs.15 x 3,60,000) Loss due to obsolescence (d) [Note (iii)] Rs.16,20,000 [Rs.13.5 x (60 x 2,000)] Rs.1,77,300 [Rs.15 x (60 x 197)] Total Cost [(a) +(b) +(c) +(d)] Rs.64,95,300 Rs.55,91,472 If purchase quantity equals to EOQ, there will be a saving of Rs.9,03,828 i.e. Rs. 64,95,300 Rs.55,91,472. Notes: (i) AS after 5 days of purchase the Material A gets obsolete, the quantity in excess of 5 days consumption i.e. 6,000 kg. are wasted.hence, after 6,000 kg. a fresh order needs to be given. (ii) Carrying cost is incurred on average stock of Materials purchased. (iii)the excess quantity of material gets obsolete and loss has to be incurred. Question 6 (8 Marks) Creditors A/c (2 mark) To Bank A/c 5,80,000 By Balance b/d 25,000 To Balance c/d 40,000 By Stores ledger control A/c 5,95,000 (Materials purchased)(bal. figure) 6,20,000 6,20,000 Stores Ledger Control A/c (2 mark) To Balance b/d To Creditors A/c (Materials purchased) 40,000 By WIP control A/c (Balancing figure) 5,70,000 5,95,000 By Balance c/d 65,000 6 P a g e

7 6,35,000 6,35,000 Work-in-Process Control A/c (2 marks) To Balance b/d To Stores ledger control To Wages control A/c (80% of ` 4,00,000) To Factory Overhead control A/c 50,000 By Finished goods control A/c (Balancing 5,70,000 By Balance c/d: 3,20,000 - Material 35,00 1,28,000 - Labour (` 50* 400 hours) - Factory Oh (` 20** 400 hours) * Direct Labour Hour Rate = ` 3,20,000/ 6,400 hours = ` 50 ** Factory Overhead Rate = ` 20,80,000/ 1,04,000 = ` 20 20,000 8, ,05, ,000 10,68,00 10,68,00 Wages Control A/c (1 mark) To Bank A/c 4,00,000 By WIP control A/c (80% of ` 4,00,000) 3,20,000 By Factory OH Control A/c 80,000 (20% of ` 4,00,000) 4,00,00 4,00,000 Factory Overhead Control A/c (1 mark) To Wages control A/c To Bank A/c (Indirect expenses) 80,000 By WIP control A/c (` 20 6,400 hours) 1,28,000 60,000 By Balance c/d 12,000 1,40,000 1,40,000 ************ 7 P a g e