Q.

1 The following details relate to an intermediary process in a factory:

Particulars
Opening Work in Progress
a) Material
b) Labour
c) Overheads
Process Material added
Direct Wages
Overheads
Transfer
to
next
process(finished)
Closing Work in Progress
a) Material
b) Labour
c) Overhead
Prepare :

Degree
of
No.
Of Cost
complet units
(Rs.)
ion (%)
300
12300
50
80
80
11850
7480
37400
100

3500
600

100
80
80

1. Process Cost Accounts for the intermediary Process

2. Statement of Equivalent Production (on FIFO Basis)
3. Statement of distribution of cost on the basis of equivalent units
Q.2 RPTL has collated the following data for its two activities. It calculates activity
cost rates based on cost driver capacity.
Activity

Cost Driver

Capacity
50,000
hours

Power

Kilowatt Hours

Quality Inspection

Number of inspections

Cost
kilowatt Rs
2,00,000
Rs
10000 inspections
3,00,000

The company makes three products namely R, S,T. For the year ended on 31 st
March 2014 , the following consumption of cost drivers was reported:
Product
R
S
T
i.
ii.

Killowat Hours

Quality
inspections
3,500
2,500
3,000

10,000
20,000
15,000
Required :
Compute costs allocated to each product from each activity.
Calculate the cost of un used capacity for each activity.

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Q.3
Maxwell Company produces a popular candy bar called Max . The candy is
produced in India and exported to the Australia. Recently , company adopted
the following standards for one 5-ounce bar of the candy :
Direct materials (5.5 ounce @ Rs 0.04) =

Rs 0.22

Direct Labour

(0.05 hour @ Rs 2.60)

Standard Prime Cost

Rs 0.13

Rs 0.35

During the first week of operation , the company experienced the following actual
results :
a) Bars produced
:
1,00,000
b) Ounces of direct materials purchased
:
5,70,000 ounces @ Rs
0.45
c) No opening or closing inventory of materials
d) Direct labour
:
5200 hours @ Rs 2.55
Compute the following variances :
1.
2.
3.
4.

Price Variance (for material)

Usage Variance (for material)
Rate Variance (for labour)
Efficiency Variance (for labour)

Q.4
BRTS Company has given a twenty kilometer long route to ply a bus . The bus costs
the company Rs 10,00,000/-. It has been insured @ 3% per annum. The annual road
tax amounts to Rs 20,000. Garage Rent is Rs 4000 p.m. Annual Repair is estimated
to cost Rs 23600 and the bus is likely to last for five years.
The salary to the driver and the conductor is Rs 6,000 and Rs 2,000 per month
respectively in addition to 10% of takings as commission to be shared equally by
them. The managers salary is Rs 14,000 per month and stationery will cost Rs
1,000 per month. Petrol and oil will cost Rs 500 per 100 kilometers . The bus will
make three round trips per day carrying on an average 40 passengers in each trip .
Assumming 15% profit on an average 25 days in a month , prepare operating cost
statement on a full year basis and also calculate the bus fare to be changed from
each passenger per kilometer.
Q.5
Three products X, Y and Z along with a by-product B are obtained again in a crude
state which require further processing at a cost of Rs 5 for X , Rs 4 for Y and Rs 2.5
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for Z per unit before sale. The by product is , however , saleable as such to a nearby
factory. The selling prices for the three main products and by product assuming they
should yield a net margin of 25% on cost , are fixed at Rs 13.75 , Rs 8.75 and Rs
7.50 and Rs 1.00 respectively all per unit quantiy sold.
During a period , the joint input cost including the material cost was RS
90,800. The respective outputs were :
X

8000 units

6000 units

4000 units

1000 units

By Product should be credited to the joint cost and only the net joint costs are to be
allocated to the main products. Calculate the joint cost per unit of each
product and the margin available as a percentage on cost.

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