M.com (Part 1) Finance/CostingM.com (Part 1)

Process Costing and Budgetary Control

Q 1) Following data is available of the manufacturing company for a year.

Fixed Overheads Rs. ‘000Salaries and wagesRent Rates and taxesDepreciationSundry administration Expenses

1520105611841040

Variable Expenses Semi Variable ExpensesAt 50% Capacity Rs. ‘000 At 50% Capacity Rs. ‘000MaterialLabourOther expenses

347232641264

RepairsIndirect LabourSalesman salarySundry administration

5601264608448

Semi variable expenses remain constant between 45% and 65%. There is increase by 10% between 65% and 80% and by 20% between 80% and 100% capacity.

Sales at various capacities Rs ‘00050%60%70%80%100%

1600019200240002880032000

Prepare the flexible budget for the year and forecast the profit at 50%, 60%, 75%, and 100% capacity.

Q 2) the following data relates to the process Q:

1. Degree of completion :a. Material 100% Rs. 24000

M.com (Part 1)

Process Costing and Budgetary Control

Q 1) Following data is available of the manufacturing company for a year.

Fixed Overheads Rs. ‘000Salaries and wagesRent Rates and taxesDepreciationSundry administration Expenses

1520105611841040

Variable Expenses Semi Variable ExpensesAt 50% Capacity Rs. ‘000 At 50% Capacity Rs. ‘000MaterialLabourOther expenses

347232641264

RepairsIndirect LabourSalesman salarySundry administration

5601264608448

Semi variable expenses remain constant between 45% and 65%. There is increase by 10% between 65% and 80% and by 20% between 80% and 100% capacity.

Sales at various capacities Rs ‘00050%60%70%80%100%

1600019200240002880032000

Prepare the flexible budget for the year and forecast the profit at 50%, 60%, 75%, and 100% capacity.

Q 2) the following data relates to the process Q:

1. Degree of completion :a. Material 100% Rs. 24000b. Labour 60% Rs. 14400

Nitesh Matta PTO

M.com (Part 1) Finance/Costingc. Overheads 60% Rs. 7200

2. Received during the month of April 2007 from the Process P 40000 units at 171000.

3. Expenses incurred in the process Q are:a. Material Rs. 79000b. Labour Rs. 138230c. Overheads Rs. 69120

4. Closing work in progress : 3000 unitsa. Degree of completion:

i. Material 100%ii. Labour and Overheads 50%

5. Units Scrapped 4000 unitsa. Degree of completion:

i. Materials 100%ii. Labour and Overheads 80%

6. Normal Loss: 5% of the current input7. Spoiled goods realized Rs. 1.50 per unit.8. Completed 33000 units are transferred to warehouse.9. Required:

a. Statement of equivalent unitsb. Statements of cost per equivalent units and total costsc. Process Q account.d. Use FIFO Method.

b. Labour 60% Rs. 14400

c. Overheads 60% Rs. 72002. Received during the month of April 2007 from the Process P 40000 units

at 171000.3. Expenses incurred in the process Q are:

a. Material Rs. 79000b. Labour Rs. 138230c. Overheads Rs. 69120

4. Closing work in progress : 3000 unitsa. Degree of completion:

i. Material 100%ii. Labour and Overheads 50%

5. Units Scrapped 4000 unitsa. Degree of completion:

i. Materials 100%ii. Labour and Overheads 80%

6. Normal Loss: 5% of the current input7. Spoiled goods realized Rs. 1.50 per unit.8. Completed 33000 units are transferred to warehouse.9. Required:

a. Statement of equivalent unitsb. Statements of cost per equivalent units and total costsc. Process Q account.d. Use FIFO Method.

Nitesh Matta PTO