MANAGERIAL ACCOUNTING

AND COSTING -II

Assignment- 2

GROUP 3

Submitted by:
Amit Chaurasia
Nishant Bhaskaran
Suneesh PP

Question 1 The sales department of M/s ANS Logistics (P) Ltd. attains sale
of Rs 600000 at 80 per cent of its normal capacity and its expenses are given
below:
Administrative
Costs

Rs

office Salaries
General expenses
Depreciation
Rates and taxe

90000
2% of sales
7500
8750

Selling Costs
Salaries
Travelling
expenses
Sales office
expenses
General Expenses

Rs
8% of sales

Distibution Costs
wages
Rent
Other expenses

Rs

2% of sales
1% of sales
1% of sales

15000
1% of sales
4% of sales

Draw up flexible admisitration, selling and distribution costs budget, operating

at 90 %, 100% and 110% of normal capacity.
Solution
Assumption:
In the absence of information it has been assumed that office salaries,
depreciation, rates and taxes and wages remain the same at 110% level of
activity also.
Flexible Budget of M/s ANS (P) Ltd
Expenses
Sales

Basis

Level of Activity
80%
90%
100%
110%
600000 675000 750000 825000

Administrative Costs
Office Salaries
90000 90000 90000 90000
General expenses
2% 12000 13500 15000 16500
Depreciation
7500
7500
7500
7500
7500
Rates and taxe
8750
8750
8750
8750
8750
Total Administrative Cost
118250 119750 121250 122750

Salaries
Travelling expenses
Sales office expenses
General Expenses

Selling Costs
8% 48000
2% 12000
1%
6000
1%
6000

54000
13500
6750
6750

60000
15000
7500
7500

66000
16500
8250
8250

Total selling costs

Wages
Rent
Other expenses
Total Distribution costs
Total Adm, Selling and
Distribution costs

72000
Distribution Costs
15000 15000
1%
6000
4% 24000
45000

81000

90000

99000

15000
6750
27000
48750

15000
7500
30000
52500

15000
8250
33000
56250

235250 249500 263750 278000