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Cost and Management Accounting
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N.
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B.: 1)
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Attempt any Four Questions
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2)
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All questions carries equal mark
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1.
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X is the manufacture of Mumbai
purchased three chemicals A, B and C from U.P.The bill
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gave the following information:
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Chemical A:
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6000 kgs @ Rs. 4.20 per kg
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Rs
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25,200
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Chemical B:
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10000 kgs @ Rs. 3.80 per kg
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38,000
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Chemical C:
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4000 kgs @ Rs. 4.75 per kg
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19,000
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VAT
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2
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,055
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Railway Freight
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1
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,000
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Total Cost
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85,255
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A shortage of 100 kgs in chemical A,
of 140 Kgs in chemical B and Of 50 kgs in chemical C was
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noticed due to breakages. At Mumbai,
the manufacture paid octroi duty @ 0.20 kg. He also paid
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hamali, Rs 20 for the chemical a, Rs
58.12 for chemical B and Rs 35.75 for chemical C. Calculate the
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stock rate that you would suggest for
pricing issue of chemicals assuming a provision of 4 % towards
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further deterioration and also show
the quantity (kgs) of chemicals available for issue.
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2.
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ABC Ltd has collected the following
data for its two activities. It calculates activity cost rates
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based on cost driver capacity.
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Activity
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Cost driver
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Capacity
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Cost
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Power
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Kilowatt hours
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50000 hrs
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Kilowatt Rs 200000
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Quality Inspection
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Numbers of inspection
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10000 inspection
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Rs 300000
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The Company makes three products, A, B
and C.For the year ended March 31, 2004, the following
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consumption of cost drivers was
reported:
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Product
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Kilowatt-hours
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Quality Inspection
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AN ISO 9001 : 2008 CERTIFIED
INTERNATIONAL B-SCHOOL
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A
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20000
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7000
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B
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40000
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5000
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C
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30000
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6000
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Compute the costs allocated to each
product from each activity
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Calculate the cost of unused capacity
for each activity.
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3.
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Reliable company wishes to discontinue
the sale of one of the products in vew of unprofitable
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operations. Following details are
available with regard to turnover, cost and activity for the
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current year ending 31
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st
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March.
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Products
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P
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Q
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R
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S
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Sales Turnover
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Rs.600000
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Rs.1000000
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Rs.500000
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Rs.900000
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Cost of sales
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350000
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800000
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370000
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480000
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Storage area (square meters)
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40000
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60000
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70000
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30000
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Number of cartons sold
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200000
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300000
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150000
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350000
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Number of bills raised
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100000
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120000
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80000
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100000
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Overhead costs and basis of
apportionatement are:
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Fixed Expenses
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Basis of Apportionatement
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Administration wages & salaries
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Rs.100000
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Number of bill raised
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Salesmen salaries a & expenses
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120000
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Sales turnover
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Rent and insurance
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60000
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Storage area
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Depreciation
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20000
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Number of cartons
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Unfixed Expenses
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Commission
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3 % of sales
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Packing material & wages
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Re 1 per carton
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Stationery
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Re 0.50 per bill
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You have to prepare
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1.
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Staement showing summary of Selling
& Distribution Costs to the products
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2.
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Profit & Loss Statement showing
contribution and profit or loss of each of the products to enable
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the Company take an appropriate
decision on discontinuance of the sale of a product.
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4.
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The Tata Infrastructure Co. is
involved in two contracts Contract 69 & Contract 96 during the
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current year. The following
information relates to these contracts, which were started on
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January 1 and July 1, respectively.
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Contracts
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A
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B
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Contract Price
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Rs.300000
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Rs.400000
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Direct material issued
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55000
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40000
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Material returned to store
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1500
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2500
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Direct Labour
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36000
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22000
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Wages accrued on Dec 31
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2000
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2500
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Plant installed (at cost)
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30000
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40000
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Establishment Charges
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20000
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15000
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Direct Expenses
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20000
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30000
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Direct expenses accrued, December 31
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2000
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3000
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Work certified by architect
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320000
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120000
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Cost not work not yet certified
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10000
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30000
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Material on site, 31 December
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11000
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5500
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Cash received from contractees
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60000
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150000
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Depreciation of plant p.a
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12 %
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34%
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Prepare Contract & Contractees
Account for Contract 69 & Contract 96.
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5.
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A company manufactures a product which
involves two processes, namely, pressing and
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polishing. For the months of January,
the following information is available:
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Pressing
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Polishing
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Opening Stock
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Inputs of unit in process
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1200
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1000
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Units completed
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1000
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750
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Unit under process
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200
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250
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Material Cost
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Rs.69000
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Rs.17500
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Conversion Cost
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328500
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82500
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For incomplete unit in process, charge
material costs at 100% and conversion costs at 60% in the
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pressing process and 50 % in the
polishing process. Prepare a statement of cost and calculate the
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selling price per unit which will
result in 25 % on the sale price.
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6.
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M/s Modern Company Ltd furnishes the
following summary of Trading & Profit and Loss
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account for the current year ending
March 31.
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To Raw Material
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140000
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By sales (12000 units)
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510000
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To direct wages
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72000
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By finished stock (200 units)
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6000
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To production overheads
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45000
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By work in Process
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To selling & distribution
overheads
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43500
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Material
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26800
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To administration overheads
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41010
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Wages
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11786
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To Preliminary Expenses w/off
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3250
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Production overheads
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8000
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46586
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To Goodwill w/off
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2541
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By interest on securities (gross) 5000
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To dividend (net)
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4000
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To income-tax
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5870
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To net profit
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210415
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567586
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567586
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The Company manufactures a standard
unit. The scrutiny of cost records for the same period shows
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that-
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1.
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factory overheads have been allocated
to production at 20 percent on prime cost
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2.
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Administration overheads have been
charged at Rs.3 per cent on units produced
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3.
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Selling & distribution expenses
have been charged at Rs.4 per unit on unit sold.
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You are required to prepare a
statement of cost, to work out profit as per cost accounts, and to
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reconcile the same with that shown in
the financial accounts.
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