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Cost Accounting Question Bank
Cost Accounting Question Bank
Labour
Rs.0.60 per unit
Factory Overheads
Rs.24, 000 per year
Admn. Expenses
Rs.28, 800 per year
Selling expenses
15% of sales
Calculate the selling price if profit per unit is Rs.1.02
Q.4) The following information relates to a company
Stock
Opening
Closing
Finished goods
WIP
Raw Material
110,000
70,000
90,000
95,000
80,000
95,000
1,80,000
1,60,000
40,000
19,000
a. Show the works cost and total cost, the percentage that the works overhead cost
bears to the direct wages and the percentage that the general expenses bears to the
works cost.
b. What price should the company quote to manufacture a machine which is
estimated to require an expenditure of Rs. 8,000 on materials and Rs. 6,000 on
wages so that it will yield a profit of 25% on the total cost or 20% on selling price?
Q.6) The budgeted sales of the products of a company are as follows:
Products
Budgeted
sales in unit
Budgeted
sales in unit
Budgeted
Budgeted
Budgeted
variable cost selling price fixed
per unit
per unit
expenses
X
Y
Z
10,0000
15,000
20,000
10,0000
15,000
20,000
2.5
3
3.5
4
4
4
12,000
9,000
7,500
From the above information, you are required to compute the following for each
product:
a. The Budgeted Profit
b. The Budgeted break even sales
c. The Budgeted margin of safety in terms of sales value
Q.7) From the following particulars, you are required to calculate:
(i)P/V Ratio
(ii)BEP for sales;
(iii)Margin of Safety;
(iv)Profit when sales are Rs.2, 00,000
(v)Sales required to earn a profit of Rs.40, 000
Year Sales
Profit
I
Rs. 2,40,000 Rs.18,000
II
Rs. 2,80,000 Rs.26,000
You may make plausible assumptions. Also evaluate the effect on II years profit
when,
(a) 20% decrease in sales quantity.
(b) 20% decrease in sales quantity accompanied by 10% increase in sales price and
reduction of Rs. 3,500 in fixed costs
Q.8) A Japanese Soft Drink Company is planning to establish a subsidiary
company in India to produce mineral water. Based on the estimated annual sales of
40,000 bottles of the minerals water, cost studies produced the following estimates
for the Indian subsidiary.
Total Annual
Cost
Material
2,10,000
100%
Labour
1,50,000
80%
Factory overheads
92,000
60%
Administration
40,000
35%
expenses
The Indian Production will be sold by the manufacturers representatives who will
receive a commission of 8% of the sales price. No portion of the Japanese office
expenses is to be allocated to the Indian subsidiary.
Required:
1. Compute the sales price per bottle to enable the management to realize an
estimated
10% profit on sale proceeds in India
2. Calculate the Break-even point in Rupee sales as also in number of bottles for
the Indian subsidiary on the assumption that the sales price is Rs.14 per bottle.
Q.9) An Umbrella manufacturer makes an average net profit of Rs.2.50 per