Cost and Management Accounting - November 2018

Private Limited manufactures 20000 units of a product per month. The cost of placing an order is ` 1,500. The purchase price of the raw material is ` 100 per kg. The re-order period is 5 to 7 weeks. The consumption of raw materials varies from 200 kg to 300 kg per week, the average consumption being 250 kg. The carrying cost of inventory is 9.75% per annum. You are required to calculate: (i) Re-order quantity (ii) Re-order level (iii)…

(a) Following details are provided by M/s ZIA Private Limited for the quarter ending 30 September, 2018: 6 INTERMEDIATE (NEW) EXAMINATION: NOVEMBER, 2018 (i) Direct expenses (ii) Direct wages being 175% of factory overheads (iii) Cost of goods sold (iv) Selling & distribution overheads (v) Sales (vi) Administration overheads are 10% of factory overheads ` 1,80,000 ` 2,57,250 ` 18,75,000 ` 60,000 ` 22,10,000 Stock details as per Stock Register: Particulars 30.06.2018 30.09.2018 Raw material Work-in-progress 2,45,600 1,70,800 2,08,000 1,90,000…

(a) XYZ Ltd. has obtained an order to supply 48000 bearings per year from a concern. On a steady basis, it is estimated that it costs ` 0.20 as inventory holding cost per bearing per month and the set-up cost per run of bearing manufacture is ` 384. PAPER – 3 : COST AND MANAGEMENT ACCOUNTING 11 You are required to: (i) compute the optimum run size and number of runs for bearing manufacture. (ii) compute the interval between two…

(a) The following balances were extracted from a Company's ledger as on 30th June, 2018: Particulars Debit (`) Raw material control a/c 2,82,450 Work-in-progress control a/c 2,38,300 Finished stock control a/c 3,92,500 General ledger adjustment a/c Total Credit (` ) 9,13,250 9,13,250 9,13,250 The following transactions took place during the quarter ended 30 th September, 2018: (i) Factory overheads - allocated to work-in-progress 1,36,350 PAPER – 3 : COST AND MANAGEMENT ACCOUNTING 15 (ii) Goods furnished - at cost 13,76,200…

(a) An electronic gadget manufacturer has prepared sales budget for the next few months. In this respect, following figures are available: Months Electronic gadgets' sales January 5000 units February 6000 units March 7000 units April 7500 units 8000 units PAPER – 3 : COST AND MANAGEMENT ACCOUNTING 19 To manufacture an electronic gadget, a standard cost of ` 1,500 is incurred and it is sold through dealers at an uniform price of ` 2,000 per gadget to customers. Dealers are…