Cost and Management Accounting - January 2021

(a) During a particular period ABC Ltd has furnished the following data: Sales ` 10,00,000 Contribution to sales ratio 37% and Margin of safety is 25% of sales. A decrease in selling price and decrease in the fixed cost could change the "contribution to sales ratio" to 30% and "margin of safety" to 40% of the revised sales. Calculate: (i) Revised Fixed Cost. (ii) Revised Sales and (iii) New Break-Even Point. (b) A machine shop has 8 identical machines manned…

(a) Z Ltd is working by employing 50 skilled workers. It is considering the introduction of an incentive scheme - either Halsey Scheme (with 50% Bonus) or Rowan Scheme - of wage payment for increasing the labour productivity to adjust with the increasing demand for its products by 40%. The company feels that if the proposed incentive scheme could bring about an average 20% increase over the present earnings of the workers, it could act as sufficient incentive for them…

(a) Two manufacturing companies A and B are planning to merge. The details are as follows: A B 90 60 Sales ( `) Variable Cost ( `) 63,00,000 39,60,000 48,00,000 22,50,000 Fixed Cost (`) 13,00,000 15,00,000 Capacity utilisation (%) 12 INTERMEDIATE (NEW) EXAMINATION: JANUARY, 2021 Assuming that the proposal is implemented, calculate: (i) Break-Even sales of the merged plant and the capacity utilization at that stage. (ii) Profitability of the merged plant at 80% capacity utilization. (iii) Sales Turnover of…

Mayura Chemicals Ltd buys a particular raw material at ` 8 per litre. At the end of the processing in Department- I, this raw material splits-off into products X, Y and Z. Product X is sold at the split-off point, with no further processing. Products Y and Z require further processing before they can be sold. Product Y is processed in Department-2, and Product Z is processed in Department-3. Following is a summary of the costs and other related data…

(a) ABC Health care runs an Intensive Medical Care Unit. For this purpose, it has hired a building at a rent of ` 50,000 per month with the agreement to bear the repairs and maintenance charges also. The unit consists of 100 beds and 5 more beds can comfortably be accommodated when the situation demands. Though the unit is open for patients all the 365 days in a year, scrutiny of accounts for the year 2020 reveals that only for…