LOVELY PROFESSIONAL UNIVERSITY

Home Work - I

Lovely School of Honors Department of Management

Name of the faculty member: Dr. Babli Dhiman
Course No: MGT 202 Course title: Cost and Management Accounting
Class: BBA-MBA Semester: II Section: Q1907/1908 Batch: 2009
Max. Marks: 15 Date of Allotment: 21/08/10 Date of Submission:30/08/10

Part I
Q1. Mr. Anil furnishes the following data relating to the manufacture of a standard
product during the month of April, 2008:
Raw material consumed Rs. 15,000
Direct labour charges Rs. 9,000
Machine hour rates Rs. 5
Machine hours worked 900
Administration overheads 20% on works cost
Selling overheads Re. 0.50 per unit
Units produced 17,100
Units sold 16,000 at Rs. 4 per unit
You are required to prepare the cost sheet from the above, showing;
(a) The cost of production per unit
(b) Total profits and the profit per unit.

Q2. The books and the records of the Anand Manufacturing Company present the
following data for the month of August, 2008:
Direct labour cost Rs. 32,000 (160% of factory overheads)
Cost of goods sold Rs. 1,12,000
Particulars August 1 August 31
Rs. Rs.
Raw material 16,000 17,200
Work-in-progress 16,000 24,000
Finished stock 28,000 36,000

Other data:
Selling expenses Rs. 6,800
General and administration expenses Rs. 5,200
Sales for the month Rs. 1,50,000.
You are required to determine:
(a) Purchases (b) profit earned by organization.

Q3: From the following particulars prepare cost sheet showing the total cost per tonne
for the period ended 31st December 2006:
Rs Rs
Raw material 33,000 Rent and taxes (offices) 500
Productive wages 38,000 Water supply(works) 1,200
Unproductive wages 10,500 Factory insurance 1,100
Factory rent and taxes 7,500 Office Insurance 500
Factory lighting 2,200 Legal expenses 400
Factory heating 1,500 Rent of warehouses 300
Motive power 4,400 Depreciation of
Haulage(works) 3,000 - machinery 2000
Director’s fees(Works) 1,000 - building 1000
Director’s fees(office) 2,000 - delivery vans 200
Factory cleaning 500 bad debts 100
Sundry office expenses 200 advertising 300
Estimating 800 Sales department’s 1,500
expenses(works) 750 salaries 700
Factory stationery 900 Upkeep of delivery vans 50
Office stationery 600 Bank charges 1,500
Loose tools written off Commission on sales

The total output for the period has been 14,775 tonnes.

PART B

Q4: The accounts of x manufacturing company for the year ended December, 2009
show the following :
Rs Rs
Factory office salaries 6,500 Travelling expenses 2,100
General office salaries 12,600 Traveller’s salaries 7,700
Carriage outward 4,300 Productive wages 1,26,000
Carriage on purchases 7,150 Depreciation
Bad debts written o and ff 6,500 Plants 6,500
Repairs of Plant, 4,450 Furniture 300
Machinery Director’ fees 6,000
Rent, Rates, taxes- 8,500 Gas and water
- factory 2,000 Factory 1,200
- Office 4,61,100 Office 400
Sales Manager’s salary 10000
Stock of materials 62,800 General expenses 3,400
Opening 48,000 Income tax [paid 500
Closing 1,85,000 Dividend 1,000
Material purchased

Manager’s salary ¾ for factory and ¼ for office

Prepare the Cost sheet.

Q5: The following data have been extracted from the books of Sunshine Industries ltd,
for the year ended 2008;
 Rs Rs
Opening stock of raw 25,000 Indirect consumption of
material 85,000 material 500
Purchase of raw material 40,000 Salary- office 2,500
Closing stock of raw material 5,000 Sales man 2,000
Carriage inward 90,000 Other factory expenses 5,700
Wages- Direct 10,000 Other office expenses 900
Indirect 5,000 Manager’s Remuneration 12,000
Rent rates- Factory 500 Bad debts written off 1,000
Office Advertisement 2,000
Depreciation 1,500 expenditure 1,100
Plant and Machinary 100 Travelling expenses 1,000
Office furniture 5,000 Carriage outward 2,50,000
Cash discount Sales 15,000
Advance income tax paid

The manager’s has the over all charge of the company and his remuneration is ,to be
allocated as Rs 4,000 to the factory and Rs 2,000 to the office and Rs 6,000 to the
selling operations. Prepare statement of cost.

Q6: Following are the particulars for the production of 800 waterproofs of K Waterproofs
Manufactures Ltd. for the year ending 31st march, 2007:
Cost of Material Rs. 32,000, direct wages Rs. 48,000, manufacturing charges Rs.
20,000, office salaries Rs. 24,000, rent and taxes Rs. 4,000, selling expenses Rs.
8,000, general expenses Rs. 12,000 and sales Rs. 1,60,000.
Following estimates were made by the costing department of the company for the year
ending 31st march, 2008:
(a) The output and sales will be of 1,000 waterproofs.
(b) The price of material will rise by 25% on the previous year’s level.
(c) Wages during the year will rise be 12.5%.
(d) Manufacturing cost will rise in proportion to the combined cost of material and
wages.
(e) Selling cost per unit will remain unchanged.
(f) Other expenses will remain unaffected by the rise in output.
From the above information prepare the cost statement showing the price at which the
waterproofs would be marked so as to show a profit of 12.5% on the selling price.

Date: Signature of faculty:

Remarks of HOD
 Signature of HOD with
date
Remarks by HOS

Signature of HOS with

date