Student Regn Number 2113050

Regn No 2113050
Material price variance (450,000)
Material usage variance (250,000)
Labour efficiency variance 54,000
Labour rate variance 20,000

Purchase Quantity
Apr-22 58
May-22 62
Jun-22 44

Answer
Fixed Cost Amount Variance (2,000)
Fixed Cost Efficiency Variance 250

Answer
Film Projects
1 Thalaivar 169
2 Thalapathy 67
3 Thala 62
4 Chiyaan 61

Songs
1 5
2 5
3 3
4 -

Answer
Acceptance of Order No
Acceptance on Sale of Butter Milk No

Answer
Break Even point 200,000
MOS 100,000
Profit 27,000
Variable Cost of 2020 252,000
Variable Cost of 2021 315,000
Question 1
Silent Motors Limited, provides you the following information
Annual Capacity 10,000
Copper Coil Requirement for 1 Motor (KG) 4
Copper Coil Rate per Kg 2,500
Labour Hours requirement for 1 Motor (Hours) 5
Wage Rate per Hour of labour 200
Planned Number of Motors 800
Actual Motors Completed 1,100
Actual Copper Coil Consumed 4,500
Actual Copper Coil Expenses 11,700,000
Actual Hours of Labour Hours 5,400
Actual Wages paid 1,026,000

Calculate
Material price variance
Material usage variance
Labour efficiency variance
Labour rate variance

Answer
Standards are fixed for Actual Output
Actual Motors Produced 1,100

Standard Copper Coil Required 4,400

Standard Rate for Copper Coil 2,500
11,000,000
Standard labour hours required 5,500
Standard Wage Rate 200
1,100,000

Material Price Variance (SR - AR) X AQ

(450,000)

Material Usage Variance (SQ - AQ) X SR

(250,000)

Labour Rate Variance (SR - AR) X AH

54,000

Material Usage Variance (SH - AH) X SR

20,000
Verification
Total Material Cost Variance [SQ X SR] - [AQ X AR] (700,000)
Material Price Variance (450,000)
Material Usage Variance (250,000)

Total Labour Cost Variance [SH X SR] - [AH X AR] 74,000

Material Price Variance 54,000
Material Usage Variance 20,000
 Answer Summary
Material price variance (450,000)
Motors Material usage variance (250,000)
Labour efficiency variance 54,000
Labour rate variance 20,000

MATERIAL
COPPER COIL 1100*4*2500
4500*(11700000/4500)

-250000

LABOUR 1100*5*200
5400*(1026000/5400)

20000

Actual Copper Coil Consumed 4,500

Actual Copper Coil Rate 2,600
11,700,000
Actual Labour Hours worked 5,400
Actual Wage Rate 190
1,026,000

- AR) X AQ

- AQ) X SR

- AR) X AH

- AH) X SR
OK

OK
 11,000,000
0*(11700000/4500) 11,700,000
(700,000)

-450000

1100000
0*(1026000/5400) 1026000
74000

54000
Question 2
Marketing Manager of a perfume manufacturing company provides you following sales target (in
Brand Smoky Cold Woody
Apr-22 400 200 500
May-22 800 300 1,000
Jun-22 1,000 400 1,500
Jul-22 900 400 1,800
Aug-22 700 300 1,200
Sep-22 300 100 400
Oct-22 200 80 200
Nov-22 150 30 100
Dec-22 100 30 50

The production policy of the Company is to produce 1 month in advance

The main raw material amber is imported from abroad
Standard mix of amber in a bottle of 100 ml is 20 grams 20

You are required to prepare purchase budget in Quantity of Amber (in KGs) for First Quarter of 2

Answer
Sales Plan of Total Units
Apr May Jun Jul Aug Sep
1,100 2,100 2,900 3,100 2,200 800

Production Budget
Production policy is to produce one month in advance. Units required for May Sales to be produc
Apr May Jun Jul Aug Sep
2,100 2,900 3,100 2,200 800 480

RM Requirement (in KGs) Apr May Jun Jul Aug Sep

Amber Requirement 42 58 62 44 16 10

Purchase Budget (In Kgs)

Amber to be purchased in 1 month in advance. May requirement to be purchased in April
Apr May Jun
58 62 44
 ollowing sales target (in 100 ml bottles)

Purchase Quantity
Apr-22 58
May-22 62
Jun-22 44

Gs) for First Quarter of 2022-23 if purchase is to be made 1 months in advance

Oct Nov Dec

480 280 180

May Sales to be produced in the month of April

Oct Nov
280 180

Oct Nov
6 4

rchased in April
Question 3
Titan showroom is following standard costing for their service department
They have fixed that 2 hours is the standard time to service any watch
Rent paid for the showroom is Rs. 10,000 per month

During the month of January 2022, 4,000 watches were planned for service

In actual, the showroom serviced 4100 watches and paid rent of Rs. 12000

You are required to calculate

a) Fixed Cost amount Variance
b) Fixed Cost Efficiency Variance

Answer
Fixed Cost Amount Variance (Budgeted Expenses - Actual Expenses)
Budgeted Expenses 10,000
Actual Expenses 12,000

Fixed Cost Amount Variance (2,000) Unfavourable

Fixed Cost Efficiency Variance

Budgeted Rate of Recovery 2.5 SR
Actual Watches serviced 4,100 AW
Planned Watches 4,000 BW

Fixed Cost Efficiency Variance 250 Favourable

(AW - BW) X SR

Verification
Total Fixed Cost Variance (1,750) (AW X SR) - Actual Expenses

Fixed Cost Amount Variance (2,000) Budgeted Expenses - Actual Expenses

Fixed Cost Efficiency Variance 250 (AW - BW) X SR
(1,750)
 Answer
Fixed Cost Amount Variance (2,000)
Fixed Cost Efficiency Variance 250

2.439024
4100 12000

4100*(10000/4000) 10250
4000*(12000/4000) 12000
-1750

250 -2000
al Expenses)

al Expenses

es - Actual Expenses
Question 4
Aniruth, the Classic Music Composer is having 4 film projects in hand
For each film he has planned 5 songs
Each song requires 4 hours of composing time
Since the power supply is in shortage and he is not having power backup, he is requesting your a

Film Projects Thala 62 Thalapathy 67 Chiyaan 61 Thalaivar 169

Contribution per Song 400,000 600,000 300,000 2,000,000

Available power hours 52

You are required to suggest the number of songs to be composed and the projects to be accepted

Answer
Total Available Hours 52
Maximum Possible Songs 13

Songs to preferred based on Contribution per Song

Projects Rank No of Songs Possible Songs Balance Songs
Thalaivar 169 1 5 5 8
Thalapathy 67 2 5 5 3
Thala 62 3 5 3 0
Chiyaan 61 4 5 0 0
 Answer
Film Projects
1 Thalaivar 169
2 Thalapathy 67
is requesting your assistance for planning 3 Thala 62
4 Chiyaan 61

jects to be accepted

5 4 20
5 4 20
3 4 12
Number of Songs
5
5
3
0
Question 5
Govinda Dairy is into the production of Butter, Curd, Milk and Butter Milk
Their Bill of Material provides you the following information of processing
Installed Capacity 1000 Litres
Input output Ratio
Milk 10 Litres
Curd 8 Litres
Butter Milk 6 Litres
Butter 1 Litres

The procurement price of Milk is Rs. 30 per litre

Processing Cost per litre of Milk to get 1 litre of Butter is Rs. 100
Fixed Cost per litre of Butter is Rs. 40 per litre 40
Currently 1 Litre of Butter is sold for Rs. 450
They have regular orders for 600 litres
They received an order for 200 litres of Butter for Rs. 400 per litre

1) Can they accept the order

2) Can they accept the order if Butter Milk can be sold for Rs. 1 per litre

Answer
Calculation of Break Even Point
Total Fixed Cost 40,000 Fixed Cost are incurred for Installed Capacity
It is assumed that in general Butter Milk cannot be sold
Contribution per Litre
Sale Price 450
Less: Variable Cost
Milk Cost 300
Processing Cost 100

Contribution per litre 50

Break Even Litres of Butter 800 No

Since Break Even Point is not reached, New order at reduced price should not be accepted

Contribution per Litre on Salel of Butter Milk

Sale Price 450
Less: Variable Cost
Milk Cost 300
Processing Cost 100
Realisation from Buttermilk (6)

Contribution per litre 56

Break Even Litres of Butter 714 No

Since Break Even Point is not reached, New order should not be accepted even if Butter Milk c
 Answer
Acceptance of Order No [Yes / No]
Acceptance on Sale of Butter Milk No [Yes / No]

40

lled Capacity

d not be accepted
even if Butter Milk can be sold
Question 6
Maradona Sports Care provides you following information on sale of Football
2020 2021
Sale Units 1200 1500
Profit per Unit 40 50
Sale Price per Unit 300 300

Following cost details are provided to you

Transport Cost for 10 balls 200
Rent paid 10,000 per annum
Advertisement 500 per month
Reference Commission paid 30 per Ball

You are required to calculate

1) Break Even Point
2) Margin of Safety on Sale of Rs. 3,00,000
3) Profit on Margin of Safety of 300 Balls
4) Variable Cost per Ball for 2020 27000
5) Variable Cost per Ball for 2021 90000
0.3
Answer 108000
Calculation of Break Even Point (in Value) 48000
Profit Volume Ratio Change in Profit / Change in Sales 60000
200000
Change in profit 27,000
Change in Sale Value 90,000

Profit Volume Ratio 30%

Fixed Cost = (Contribution - Profit)

Contribution = Sales Value X Profit Volume Ratio
2020 2021
Contribution 108,000 135,000
Profit 48,000 75,000
Fixed Cost 60,000 60,000
Since the given details about cost is only part of the cost, it is totally ignored

Break Even Point (in Value) Fixed Cost / Profit Volume Ratio
200,000

Calculation of Margin of Safety

Total Sales 300,000
Break Even Sales 200,000
Margin of Safety 100,000

Profit on Margin of Safety of 300 Balls Profit = Margin of Safety Sales X Profit Volume Ratio
Margin of Safety Sales 90,000 Margin of Safety Units X Sale Price
Profit 27,000

Variable Cost Sales Value X (1 - Profit Volume Ratio)

2020 252,000 210
2021 315,000 210
Answer
Break Even point 200,000
MOS 100,000
Profit 27,000
Variable Cost of 2020 252,000
Variable Cost of 2021 315,000

360000 450000
100000 108000 135000
27000 252000 315000
ofit Volume Ratio