Standard: 5 kg per unit at ₹78/kg. Actual: 1,000 units produced using 5,400 kg at ₹80/kg. What is the Material Usage Variance?

A manufacturing company has a Profit-Volume (P/V) Ratio of 40% and fixed costs of ₹12,00,000 per annum. If the selling price per unit is ₹100, what is the Break-Even Point (BEP) in sales value and units, and what sales value is required to earn a target profit of ₹6,00,000?

Standard cost data of a product manufactured by Beta Ltd. is as follows: - Standard Material per unit of output: 5 kg @ ₹20 per kg - Standard Labour per unit of output: 3 hours @ ₹30 per hour Actual results for the month of October 2024 for an actual output of 2,000 units: - Material consumed: 10,800 kg at a total cost of ₹2,05,200 - Labour hours paid and worked: 5,800 hours at a total cost of ₹1,85,600 Compute the following variances: 1. Material Cost Variance (MCV), Material Price Variance (MPV), Material Usage Variance (MUV) 2. Labour Cost Variance (LCV), Labour Rate Variance (LRV), Labour Efficiency Variance (LEV)

10. Keeping the management purchase policy & production quantity mix in consideration for SS304 & SS316, the maximum number of units of each product that company would produce (in units) respectively by utilizing 1200 tons of raw material:

Question 1 (a) Language Achievers, a renowned institute specializing in TOEFL preparation, has secured a spacious hall for 20,000 on weekly basis with a seating capacity of 250 students. The instructor, highly qualified and experienced, is compensated generously with an honorarium of 1,500 per lecture. Additionally, he receives reimbursement for travel expenses of ₹ 200 per day along with refreshments costing 1,500 per week to ensure his comfort and focus during teaching sessions. Administrative and miscellaneous expenses, covering essential utilities and materials are, 500 per week. Language Achievers has meticulously planned its curriculum, scheduling batches of 2 lectures per day, 5 days a week for 30 weeks, ensuring comprehensive coverage of the TOEFL syllabus. Required: (i) Calculate the total cost per batch. (ii) Determine the minimum fee per student in a batch to cover costs, if the batch is fully occupied. (iii) Calculate the fee to be charged from. each student if batch is 80% filled and institute aims to achieve a profit margin of 25% on the fee. (5 Marks) COST AND MANAGEMENT ACCOUNTING (b) XYZ Ltd. declared a net profit of ₹ 2,25,000 based on their financial accounts for the year ending 31st March, 2024. The profit disclosed in cost books are not matched with financial accounts. The following information were revealed during the scrutiny of the figures of both the sets of books: Sr. No. Particulars ₹ 1. Preliminary expenses written off in financial accounts 35,000 2. Factory Overheads Over charged in cost accounts 20,000 3. Expenses on issue of shares in financial accounts 30,000 4. Undervaluation of closing stock in cost accounts 65,000 5. Interest on Bank Deposits in financial accounts 60,000 6. Under recovery of administration overheads in cost accounts 25,000 7. Notional Rent of own premises charged in cost accounts 30,000 8. Under recovery of selling overheads in cost accounts 35,000 9. Bad debts recovered in financial accounts 50,000 Required: Prepare Reconciliation Statement to arrive at net profit/loss as per Cost Accounts. (5 Marks) (c) JC Ltd. has a production capacity of 80,000 units per year. Presently a company produces 60,000 units. Its cost structure is as under: Material Cost ₹ 6 per unit Labour Cost ₹ 4 per unit Variable overheads ₹ 2 per unit Total fixed cost ₹ 3,00,000 per annum. Present selling price ₹ 20 per unit in the month of January, 2024 company received an offer from a Japanese client to supply 20,000 units at a price of ₹ 14 per unit with the additional shipping cost of ₹ 8,000. Required: (i) On the basis of changes in the profit, advice to the company, whether the offer should be accepted or not? (ii) Will your advice be different, if the customer is local one? (iii) If Japanese client offer for supply of 30,000 units to a price of ₹ 14 (part supply of order not accepted) and shipping cost treated as variable cost, analyze the impact on the profit of JC Ltd., if order accepted. (4 Marks)

Question 2 (a) MNP Limited have the capacity to produce 84,000 units of a product very month. Its prime cost per unit at various levels of production is as follows: Level Prime Cost per unit (`) 10% 50 20% 48 30% 46 40% 44 50% 42 60% 40 70% 38 80% 36 90% 34 100% 32 Its prime cost consists of raw material consumed, direct wages and direct expenses in the ratio of 3 : 2 : 1. In the month of January 2024, the company worked at 40% capacity and raw material purchased amounting to ₹ 8,40,000. In the month of February 2024, the company worked at 100% capacity and raw material purchased for ₹ 16,46,400. It is the policy of the company to maintain opening stock of raw material equal to 1/3 of closing stock of raw material. Factory overheads are recovered at 60% of direct wages cost. Fixed administration expenses (as part of production cost) and fixed selling and distribution expenses are ₹ 2,01,600 and ₹ 1,68,000 per month respectively. During the month of January 2024 company sold 33,600 units @ ₹ 68.8 per unit. The variable distribution cost amounts to ₹ 1.5 per unit sold. The management of the company chalks out a pl for the month of February 2024 to sell its whole output @ ₹ 61 per unit by incurring following further expenditure : (i) Company sponsors a television programme on every Sunday at a cost of ₹ 26,250 per week. There are 4 Sundays in February 2024. (ii) Hi-tea programme every month for its potential customers at a cost of ₹ 1,05,000. (iii) Special gift item costing ₹ 105 on sale of a dozen units. (iv) Lucky draws scheme is introduced every month by giving the first prize of ₹ 1,00,000; second prize of ₹ 80,000; third prize of ₹ 40,000 and four consolation prizes of ₹ 8,000 each. Note: (In the month of February 2024, there is a significant saving in material cost per unit due to entry of new suppliers in the market and saving in per unit cost of Direct wages and Direct expenses due to introduction of new· policy by the management.) Prepare a cost sheet for the month of January 2024 and February 2024 showing prime cost (with different elements of prime cost), factory cost, cost of production, total cost and profit earned. (8 Marks) (b) In a factory there are 50 workers, working 8 hours per day including 30 minutes for lunch break, worked for 160 days during a period of six months ended on 31st December, 2023. During this period total employee's cost was recorded ₹ 3,90,000. The management of the factory decided the overtime premium rates for the month of January 2024 as under : Sundays and holidays 180% of basic wages rate Before and after normal working hours 160% of basic wages rate COST AND MANAGEMENT ACCOUNTING During the last six months (ended on 31st December, 2023), the following hours were worked: Normal time 56,250 Sundays and holidays 750 Before and after normal working hours 3,000 Total hours· 60,000 During the month of January 2024, the factory worked on a job BX in the following manner. Normal working 2,400 men hours Overtime on Sundays and holidays 200 men hours Overtime before and after normal working 400 men hours Total hours 3,000 You are required to calculate the labour cost chargeable to job BX and overheads in each of the following situations: (i) Where overtime is worked regularly in whole year as a policy on account of shortage of workers. (ii) Where overtime is worked irregularly to meet the requirement of production. (iii) Where overtime is worked at the request of the customer to complete the job in time. (iv) Where overtime is worked on account of flood in the area. (6 Marks)

Question 5 (a) This data pertains to the three machines operating in the manufacturing division of PQR Corp for the financial year 2023-2024: Particulars Estimated Expenses TOTAL (`) Machines X (`) Y (`) Z (`) Direct Labour Expenses (per quarter) 2,50,000 Oil Expenses (per quarter) 1,03,125 37,500 37,500 28,125 Machine Insurance Expenses (per quarter) 60,000 Depreciation (per annum) 6,00,000 1,00,000 2,00,000 3,00,000 Building Maintenance Expenses (per quarter) 1,00,000 Wages of Operator (per quarter) 2,25,000 Electricity Expenses (per quarter) 3,00,000 Rent and Rates (per month) 80,000 Salary of Technician (per month) 62,500 (The Technician works only on machines X and Y and the Operator controls all three machines and both spend equal time on each of the machines worked upon by them.) COST AND MANAGEMENT ACCOUNTING There are 14 holidays besides Sundays in the year, of which six are on Saturdays. There was a Strike of workers for 5 working days (including one Saturday). The manufacturing department operates for 8 hours per day on regular week days, while on Saturdays, the operating hours are reduced by 2 hours per day. All machines operate at 80% capacity throughout the year. Assume 366 days in a year. The following additional information is also available: (i) A 20% hike in the price of oil. (ii) A 10% rise in Oil consumption for machines 'X' and 'Y' only. (iii) Particulars Machines X Y Z No. of Workers 5 3 2 Ratio of K.W. Rating 3 3 4 Ratio of Floor space utilized 1 2 1 Required: Prepare a Statement detailing the allocation of expenses to each machine on an annual basis and thereafter, compute the comprehensive machine hour rate for each of the specified machine. (7 Marks) (b) ABC Ltd. is a well-known company for producing baby care products. The company produces and sells two variants of organic shampoo for children: "Baby Rose" and "Baby Lily". The sales and cost data for both products are provided below: Particulars Baby Rose Baby Lily Current demand and Sales (Number of bottles) 4,000 3,000 Production Capacity (Number of bottles) 7,500 6,000 Selling Price per bottle (`) 600 750 Variable Costs per bottle: - Direct Materials (₹ 20 Per litre) 160 200 - Other Variable Costs 270 350 The fixed costs amount to ₹ 5,00,000 and ₹ 4,50,000 for Baby Rose and Baby Lily respectively. The Production Manager has informed that 1,00,000 litres of material is available for production. A dealer has approached the company and proposed to purchase both products at the existing selling prices, which are to be produced by utilizing the remaining unused material. However, he has insisted that all the bottles must be packed with eco-friendly packaging, which will result in an additional cost of ₹ 10 per bottle for the company. Presently, the company is not using eco-friendly material for packing of bottles. Required: Prepare a detailed statement showing the overall contribution and profit of the company after acceptance of the dealer's proposal. (7 Marks)