Question 2 (a) The following information relates to a manufacturing concern A Ltd. for the year ended 31stMarch, 2024. Particulars As on 1st April,...

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Question 2 (a) The following information relates to a manufacturing concern A Ltd. for the year ended 31stMarch, 2024. Particulars As on 1st April,2023 As on 31st March,2024 Raw Material (in ) 3,40,000 1,80,000 Work in Progress (in ) 5,50,000 3,50,000 Particulars Amount Raw Material Purchased [Inclusive of GST@18% (Ineligible for ITC)] 8,00,000 Packaging Cost (primary) 3,00,000 Fee Paid to Independent Directors 5,00,000 Production bonus paid to factory workers 10% of Wages paid to factory workers Job charges paid to job workers 41,000 Salary paid to Supervisor 6,17,900 Wages paid to factory workers 6,30,000 Salary paid to Production Control Manager 7,20,000 Sale of Scrap generated during Manufacturing 50,000 Selling Overheads per unit 2 Salary paid to General Manager 12,40,000 Freight Inwards 2% on Raw Material Purchased Expenses Paid for Quality Control check activities 4,30,000 Particulars Cost Price () WDV as on 1st April, 2023 () Depreciation Rate Insurance Cost per annum Factory Building 25,00,000 21,87,000 10% 2% of Cost Price Plant and Machinery 15,00,000 11,56,000 15% 2% of Cost Price Office Building 40,00,000 36,00,000 10% Nil Additional information: (i) Depreciation is charged on the written down value method. (ii) Stock of finished goods as on 1st April, 2023 was 80,000 units having a total cost of 8,00,000. The entire stock of opening finished goods is sold during the year, closing stock is 70,000 units. During the period, 4,50,000 units were sold. (iii) A Ltd. wants a profit of 20% on Total Sales. Required: Prepare a Cost statement showing the various elements of cost and profit earned for the year ended 31stMarch, 2024. (9 Marks) COST AND MANAGEMENT ACCOUNTING (b) A skilled worker has assigned a work. The relevant data is given as follows: Time rate per hour 25 Time allowed 9 hours Time taken 6 hours The worker has given an option to choose either Halsey (50% plan) or Rowan plan. You are required to calculate earnings under both plans and which plan is more beneficial for a worker. (5 Marks)

Accepted Answer

Answer Solution: Cost Sheet of A Ltd. for the year ended 31st March, 2024 | Particulars | Amount (₹) | Amount (₹) | | :--- | :---: | :---: | | Material Consumed: | | | | Raw materials purchased | 8,00,000 | | | Add: Freight inwards (2% of purchases) | 16,000 | | | Add: Opening stock of raw materials | 3,40,000 | | | Less: Closing stock of raw materials | (1,80,000) | 9,76,000 | | Direct Employee Cost: | | | | Wages paid to workers | 4,20,000 | | | Add: Outstanding wages at the end | 30,000 | | | Less: Outstanding wages at the beginning | (50,000) | 4,00,000 | | Direct Expenses: | | | | Hire charges of machines | | 60,000 | | Prime Cost | | 14,36,000 | | Factory Overheads: | | | | Consumable stores | 25,000 | | | Depreciation on factory building | 56,000 | | | Factory power and fuel | 90,000 | 1,71,000 | | Gross Factory / Works Cost | | 16,07,000 | | Add: Opening Work-in-Progress (WIP) | | 2,40,000 | | Less: Closing Work-in-Progress (WIP) | | (3,10,000) | | Net Factory / Works Cost | | 15,37,000 | | Quality Control Cost | | 32,000 | | Research and Development Cost | | 45,000 | | Administration Overheads (Production related): | | | | Salary paid to factory supervisor | | 36,000 | | Less: Credit for scrap recovery | | (24,000) | | Cost of Production | | 16,26,000 | | Add: Opening stock of finished goods | | 1,80,000 | | Less: Closing stock of finished goods | | (1,20,000) | | Cost of Goods Sold (COGS) | | 16,86,000 | | Selling and Distribution Overheads: | | | | Advertising expenses | 40,000 | | | Distribution expenses | 20,000 | 60,000 | | Cost of Sales | | 17,46,000 | | Profit (Balancing figure) | | 2,54,000 | | Sales Revenue | | 20,00,000 |

Detailed Solution & Explanation

Key Concepts to Understand

Depreciation

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