Cost and Management Accounting - November 2023

(a) ABC Limited manufactures a product ‘AM25’ using material ‘CEE’. The following information is available regarding material ‘CEE’: Purchase price per unit Cost of placing an order ` 300 ` 150 Carrying cost per unit per annum 6% of purchase price Consumption of material ‘CEE’ per annum 1,94,400 units Lead time Average 6 days, Maximum 8 days, Minimum 4 days Maximum consumption of material ‘CEE’ per day is 200 kg more than the average consumption per day. Required: Calculate the…

(a) The following data relates to the manufacture of product BXE for the year ended 31st March,2023: Amount (`) Value of stock as on 1 st April,2022 Raw materials Work in progress 27,00,000 10,60,000 Finished Goods Material purchased 25,00,000 2,48,00,000 Freight inward Direct wages 7,50,000 42,00,000 Power & Fuel 18,75,000 Cost of special drawings 3,60,000 Trade Discount 4,50,000 Insurance on material procured 15,000 Rent of Factory Building (1/5 th used for office purpose) 7,00,000 Depreciation on machinery 6,25,000 Depreciation on…

(a) HCP Ltd. is a manufacturing company having two production departments, P and Q and two service departments, R and S. The budgeted cost information for the month of October 2023 is furnished below: Production Departments Service Departments P ( `) Q (`) R ( `) S ( `) Indirect material Indirect Labour 1,77,500 1,55,000 94,750 35,000 49,750 75,000 18,270 14,730 Factory Rent Depreciation machinery 75,000 37,500 1250 750 200 300 21,00,000 5,00,000 1,00,000 3,00,000 800 200 80 120 Power…

JH Plastics Limited manufactures three products S, M and L. To date, simple traditional absorption costing system has been used to allocate overheads to products. Total production overheads are allocated on the basis of machine hours. The machine hour rate for allocating production overheads is ` 240 per machine hour under the traditional absorption costing system. Selling prices are calculated by adding mark up of 40% of the product cost. Information related to products for the most recent year is…

PQR Alloys Ltd. uses a standard costing system. Budgeted information for the year: Budgeted output 84,000 units Variable Factory Overhead per unit ` 16 Standard time for one unit of output 0.80 machine hour Fixed factory overheads ` 6,72,000 @ The Institute of Chartered Accountants of India PAPER – 3 : COST AND MANAGEMENT ACCOUNTING 25 Actual results for the year: Actual output 87,600 units Variable Overhead efficiency variance ` 67,200 (A) Actual Fixed factory overheads ` 7,05,000 Actual variable…