oe Cost und Managemem Accounting (M.Com PAF foedivoets| 38-Wihat wi be the eHfect on the maigin of safety i unit variabie cosis and tora! increase, assuming no change in selling price or sales volume? AB) Decrease (©) Increase: (©) Stay the same (a) Impossible to determine without mare information us ifinventory levels have increased d when compared with that calculated using ab (a) higher tbFione (©) equal fixed cost 4) impossible fo answer wiholt further intoriation per unit and fixed €O8t a) 87. Whieh fot Se ceciines ham nanveneme ag marginal Co unit espand to 2 change in production ¥UME™ Aas per Unit Vatlable Cost Per Unit 5 han Changes E ; Aiemains Constat Fiemains Const stant compa 22.22 Numerical MCQs | Short Practical Prob! 20. A company has established andclasing stoc as €S/unk. What W (a) 307,059 fe 874.550 1.A company wishes to make 9 profit of 0.75 anda seling prico of € 10 per u (a) 10,000 units ie) 22.500 units 42, company produc: Fixed costs have been abs D units and: ave been calculated as <2 per 9 Pow much profit is made w 7 8 units? (@)%5,00,000 é (©) €9,00,000 43; The total cost of production for two levels o' Level 1 3,000 6,750 Production (units) Tolai cost @) Tha variabie production cost pet unit and the t ‘ odlicto it and the total fixed production cost © ain constant the range of activity shown, SEES 5,000 9,250‘Sales Price Variance said to be favourable? the Sales Price Variance said to be adverse? formula for caleulating - Sales Quantity es - mis the Sales Quantity Variance sald to be fence : is the Sales Quantity Variance said to be adverse Give the formula for calculating - Sales Mix Variance. | 136, When is the Sates Mix Variance said to be favourable’ 197, When is the Sales Mix Variance said to be adverse? 498. Complete the fallowing equation: Sales Volume Variance Variance a Tete eS 23.2.4 Conceptual dard which can be attained under the most favourable conditions possible 4. The ‘eal Standard (b) Expected Standard (6) Currant Standard (a) Normal Standard 2% A standard which is established for use unaltered for an indefinite period is called (a) Curent standard (b) Ideal staridard (a) Expected standards (eyasic standard 2. Which of the following is rot a type of standard, conceptuaily spoaking ? () Ideal standards _ibyNegalive standards (©) Expected standards (d) Current standards 4, Which of the following statements about ideal standards is false 7 (@) tis called theoretical or maximum efficiency standard (©) Thess are standard costs that are set for production under optimal condition (6) iLmakes no allowance for wastage, spoilage and machine breakdowns Fit can te used for cash budgeting or product costing 5, Thie cost of product as determined under standard cost system is (b) Historical cost Direct co : tr ial Pas ja Predetermined cost pot le in.an hour, at standard efficiency levels, is ae (b) the direct labour usage per : (d) the direct labour efficiency the difference between tt n fields 9 2 e = SalesCost and Mh 56 Using the highstow method whet are te (ay? 6.972 (ey tegen 2, A compatiy thant oe Ce ing marginal costing att 1,400 1085 ‘using marginal aS Ay es ain evginal cost (inctee . the P1Y rate and ———— 1 Thali fection poles! increases 1Qauce’ - agi iis De oibeeyime erencever POT. 45 ane ascartamnment, bY CET ating baton fe ; ean got by OMA. 23 We spat on ptt of cranane” ne ONT tain Goats of org coat tyoe of output 9 masanat cost is ihe amount by which tele! 4m (Cost = Primo Cont « Vaiiable Overnead? 5. Bales - Variatio Cost ~ Cowra Nye 6. Contrbution- Fixed Costs = Parobt 7 Confiioutian - 20M » PY Ratio & Bxofcl = Margin of Safely x Profit Volume Pati l ©, Inte breakeven chart Volume (in Units) is showin o” 10.in the bieak-even chart Values (in Rupees) of § 5 p the Sf ais (IXY) 11 Inthe break-even chart Cost is shown on the 42.In the break-even chart Profits shown on th 130 K, xed Co steve? AFG 0 - Var 2 Rati 15 Fig — Gales - (Variable Cost + Fixed Cost ene ail COLUNIN A OLUMIN B 1. Gontribution out is charged by one Unf posts change ifthe 2. Profit Volume Ratio: (P/F) = 8) Break-even Sales in Units atial st ntributi 4. Break-even Sales in Value oe S Break-oven Sales in'% of Sales | € a Margin of Safety in Units eh —x100 t Sell Matgin of Safety in Value ie oe '9) Selling Price © i) Me th) Magi of Satety (2 of Sales) @) « Total Contribution gy Ped Cont x Contribution * 100 ©)202 "Sig Castanea ‘ (eh ange 84 often vq Muntemern Accounting 88 Com arto 6) Retuas fret gyer YAN eel NACtin eee coneee ate ernour ine (©) Stang 29 2vem Cad sale boy ott (Actua! hour ~ Budgeted hours} peandetd fixed! overneny er oOTX (Actual hour Giantoed tourette ee Starner neue (tual noute~ Standars Nour or Senay ag A Stead txed o 20 S108 volume variant Detour Actual howe Standard hors or aoe ottag (8) Actual quantin eon 3 ne ween want oi at actual : aL achonaten (©) Actus avons tl pce anc stand aby at at ie APE Acta ganic tll ea tac cay a tana Pe S08 at standart sree end standard quan at standa ro ' val pico ANE sare nouns mas tase ee Mean W P*Oduees more tat oe prohict, he sales vo (8) Sales mix variance:and sales price varies b) Sales oticienoy variaia ancl sales pico varerice Which of the folowing is. a purpase of sian costing ” ’ {2) Toco pot ataorent aves” (P78 dete brea oven 16 costs i) Talo \ linet elon bstdesie 9D na “ (a) standard set at an idea! level, vnich makes no a 2’ (8) stendard wen assimes an eticent ve) ol opeiaton , fgotors such a3 normal and machin i over a period oti 4eYA standard which is kept unchang af i 24, Ate sod 4,638 koe of matoral ata t 0. usage Variance was ¢ 260 (Favourable): The standard wea : (@) 4.700 kgs eer Gs rot panisbesacios, cuca eae Brsariibe thera a corn F staridaed cost of € 145 pe Following is the result partaining to pai Particulars , Purchases (@ 18,00,000) Consumed in manufacti 7 Radios manufactured The mate AA, 45,000 unfavourab (©) 2 4,35,000 untavourat usage BEX Ltd, has furmishied the following data for the month of March Particulars Standard Actual Material cost per kg ( 70 2 Matetial usec (Kgs 3,500 42 The imaterial price variance is (8) 7,000 (Adverse) b) 7 7,000 (Favourabl WeT* 6,840 (Adverse {a 6,840 ( Durning the month of September 2010, 7,800 kg. of material was purchased at a toral cost of ; F,18:980. The slacks ai material increased by 440 kg. is the comeary's policy to value the Stocks at'standafd purchase price. if the maternal Price variance was & 1,170 (Adverse), ne ae rice penkg. of material is )& 1.95 (b)% 2.10 582.23 (a) $2.25(e) £26,800 (Favourable) 26,000 (Favourable) (6) € 4,000 adverse (a) 4,500 adverse pre-dele/mined cost Which is calouleted from m ation and the relevant necessary expenditure” 7 ‘Standard which is “established for use unaltered period of time’ : 1@ Standard which is “established for use over a shot ditions’.ie WORK productior ions! for each unt wage target eal Tet ine seven way ae the fabour rate van el “ance tor the evict je) £873 adverse 40) 54g. 4 favou “gy during a petiod. 17:500 kabour ho (ats tawunbe isbour efficieny varianc: urs Wer9 wore roe ee 20 18 © 7,800 Hfaveurabioy, he ger coat € Oster note Ht the 6,700 No) he stand eae! bour halts are af eonsiaar ine foliowng data penaring to Mist Tormey particulars ng to M Lid. for the morith of March 2010, arate overhead cost (2) ‘Suoee ‘Actual about hours 5,000 5.600 Units produces a 400 qhe variable overhead efficiency variance is i sae 71,200 (Favourable) a eae ra spies (6) 81,200 (Adverse) 49.94. X40 is one of many items prod a ee ie fans Nore pio ae ec ftostan on 2s Pp 2f *0.00 uns per man, The sande cot che jrect labour are required at 15:per ib ard vost is bases aie tor ane unit ot x40 shows that 2 hours ba The divec! labour rate variance for Aptis {a)¥ 20,000 Favourable fe) % 24,000 Aoverse (b) € 22,000 Favourabie _ sd 24 000 Favourable icieney variance for April Gh The yariable overhead ¢ 12,000 Adverse 15) € 12,000 Favourable {e) 15,000 Advers (a) € 18.000 Favourable 95. Consider the following data penaining to p /oduction department in Y Lid. forthe month’ ot June: 2010 Actual overhead costs zy 23,200 Standard hours for actual work 3,00 Aetual frours during the month 3,500 Blandi overtiead rate per hour ©) 650 The overhead variance |S oe. fa) 1,750 (Favourable) p71,780 (Adverse) (ay 450 (Adverse) ic\'P forthe mont! 0 He) I ese al data pertaining to prog B/HL Company nas the following pudget and act March 2010 . Budgeted fixed overtiead cost @) ‘sag Budgeted production (unis) ee “Actual fixed overhead cost @) a production (units)Margiial Costing and ABsorption Costing tot 1. Amount py wnicr Bonne es PYM eas ras i~ (@) Only (i) above (6) Oniy (id) above =AeyDnly (i) above 42 The labour yield variance ig STEED AiSceeares {a) (Standard prodiction on stand poe on standard hours ~ Actual prediction) (Average standard labour Standard production on actual ore N actilal Hours— Actual production) (Average standatd labour rate par (@) (Btandard hours for actu unit) actual production — Revised standard hours) (Standard labour rate per (@) Actual production on stat Bg seine ot serio ~ Aca et) (Sar vit) ihc 2 18 due to the difference hetween actisal ovethead arid applied overhead itis (@) Volume variance {b)Total overhead variance {c) Spending variance (a) Efficiency vatiance 44. Volume variance arises due to the differences between (2) Stanclard overhiead applies an actual hours and avertyead applied to praduction (6) Actual overhead and fixed budget overhead os overtiead and flexible budget based on actual hours F/Buidgeted allowance based on standard hours allowed and overhead applied to production 45. Expenditure variances arise due to the difference between (@) Standard ove head applied on actual hours and overhead applied to production (0) Aowal overhead and fixed budget overhead Fetial overhead and flexible budget based on actual hours (@) Purchase of capital equipment ard budgeted capital equibment See. variance arises due to the differences between Slandard overhead applied on actual hours and overhead applied to production (b) Actual overead and fixed budget overhead Y@) Actual overtiead and flexible budget biased on actual hours 10) Purchase of capital equipment and budgeted capital equipment 7. Fixed overhead cost variance is the difference between (@) Actual fixed cost and Budgeted tixed cost al jixed cost and Standard fixed cost Reual fixed cost ard Applied fixed cost fixed cost anid Applied fixed cost 3 betiwoon budgeted fixes Overhead casts and applied fixed overhead cx sts variance: (b) Fixed ovethead expenditure variance {d) Fixed overhead efficiency variancerelates SOE Prodi at ‘And seling pres structum ees eae ‘Soltng price per unit Less Variable production cost Other vatiable cost 15 Fixed cost 5 Poot % (0) Whats the breakeven point in units per weeny? 10 00 & ©) 1,000 a @2 janisation manutactures ea Fa erariston manulactres angle weet Te cost ot otina +00, £29,000 and the total cost of meking 20.000 unite ie 2 4 of activity the ‘pial xed Easts remain unchanged, 1 22,000: WANG Se Se Via te variable cost per unit the product? tos e120 e425 ig) €200 4g, Acompanyy maniulactures and sels @ single product. Forthis month he budgeted fixes procuclon Overheads Are 7 43,000, budgeted production is 412,000 units and budgated sales ate 11,720 Br the company curronty usos aksorpbon costo, ifthe company used marginal costing prncities instead of absorption costing for this month What would be the effect on the budgeted proft > (a) 1,120 higher spe 20 te} € 2.920 higher (d)% 3.920 IB Acampany manuacturcs a single product wir a vanable cost pe Wseles ratio is 45%. Monthly fixed costs are % 198,000. What ic the breakeven point (in tirits)? 1 unit of € 22. The contribution (a) 4.950 (6) 9.000 @711,000 (¢) 20,000 } The following information ralates to a manufacturing company to period Units z Production 44,000 Fixed production costs 53,000 Sales 12,000 Fixed selling costs 12,000 d has been calculated as % 96,000, Using absorption costing the profit for next perio’ What would the profit for next period be using marginal costing? 25,000 Sey€ 27,000 Reet (a) 47,000 Nollowing summery data is provided for two periods Production costs Output dt 48,981 29,720 units 35,480 units 755,893,sere oy rk ar) mek anaron