Monday, 18 November 2013
costing paper solutions 1
(i) Define the following:
(a) Imputed cost
(b) Capitalised cost
(ii) Calculate efficiency and activity ratio from the following data:
Capacity ratio = 75%
Budgeted output = 6,000 units
Actual output = 5,000 units
Standard Time per unit = 4 hours
(iii) List the Financial expenses which are not included in cost.
(iv) Mention the main advantage of cost plus contracts.
(v) A Company sells two products, J and K. The sales mix is 4 units of J and 3 units of K.
The contribution margins per unit are Rs.40 for J and Rs.20 for K. Fixed costs are
Rs.6,16,000 per month. Compute the break-even point.
(vi) When is the reconciliation statement of Cost and Financial accounts not required?
(5×2=10 Marks)
Answer
(i) (a) Imputed Cost: These costs are notional costs which do not involve any cash outlay.
Interest on capital, the payment for which is not actually made, is an example of
Imputed Cost. These costs are similar to opportunity costs.
(b) Captialised Cost: These are costs which are initially recorded as assets and
subsequently treated as expenses.
(ii) Capacity Ratio =
Actual Hours x 100
Budgeted Hours
75% = actual hours
6000 Units 4 hour per unit
(a) Imputed cost
(b) Capitalised cost
(ii) Calculate efficiency and activity ratio from the following data:
Capacity ratio = 75%
Budgeted output = 6,000 units
Actual output = 5,000 units
Standard Time per unit = 4 hours
(iii) List the Financial expenses which are not included in cost.
(iv) Mention the main advantage of cost plus contracts.
(v) A Company sells two products, J and K. The sales mix is 4 units of J and 3 units of K.
The contribution margins per unit are Rs.40 for J and Rs.20 for K. Fixed costs are
Rs.6,16,000 per month. Compute the break-even point.
(vi) When is the reconciliation statement of Cost and Financial accounts not required?
(5×2=10 Marks)
Answer
(i) (a) Imputed Cost: These costs are notional costs which do not involve any cash outlay.
Interest on capital, the payment for which is not actually made, is an example of
Imputed Cost. These costs are similar to opportunity costs.
(b) Captialised Cost: These are costs which are initially recorded as assets and
subsequently treated as expenses.
(ii) Capacity Ratio =
Actual Hours x 100
Budgeted Hours
75% = actual hours
6000 Units 4 hour per unit
Wednesday, 13 November 2013
Tuesday, 12 November 2013
Subscribe to:
Posts (Atom)