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Assignment on Cost Accounting: Preparing Budgets and Apportioning Costs, Exercises of Cost Accounting

An assignment with questions related to cost accounting, budgeting, and apportioning costs. Students are required to calculate the apportionment of costs to production departments, find the unit cost of a product under individual expenses at different production levels, and answer questions about various budgeting techniques and the importance of budgets for a newly established business. The document also includes data for cost analysis.

Typology: Exercises

2011/2012

Uploaded on 07/20/2012

aishani
aishani 🇮🇳

4.5

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Download Assignment on Cost Accounting: Preparing Budgets and Apportioning Costs and more Exercises Cost Accounting in PDF only on Docsity! ASSIGNMENT No. 2 Total Marks: 100 Q. 1 What are the various incentive schemes available for labor? Which of them do you prefer most? (20) Q. 2 Following data are extracted from the estimates prepared by Royal chemical. Industries for the coming accounting year: Lighting Rs.18,000 Power Rs.149,400 Payroll Taxes 10,500 Canteen expenses 70,000 Rent of Factory 60,000 Depreciation 65,000 Storeroom expenses 85,000 Internal Transport 30,000 Following further data are also available: Service Departments Production Department A B X Y Z Direct materials (Rs.) 5,000 7,500 150,000 65,000 22,500 Direct wages (Rs.) 22,500 30,000 52,500 75,000 82,500 Value of assets (Rs.) 70,000 75,000 125,000 250,00 130,000 Horse power hours 440 2,000 7,000 7,000 6,000 Area in Sq. Feet 300 450 1,800 1,800 2,400 Relative wattage 200 300 600 600 700 Number of employees 15 20 35 50 55 Proportion of internal transport usage 1 1 5 2 3 Cost of service departments are prorated only to production departments. Costs of service departments A and B are apportioned in the ratio of direct wages and direct materials respectively. Required: Prepare a sheet showing apportionment of costs to production department. (20) Q. 3 Cost of an article at a capacity level of 5,000 units is given under A below. For a variation of 20% in capacity above or below this level the individual expenses vary as indicated under B below: A B Materials cost Rs.25,000 100% varying Labor cost 15,000 100% varying Power 1,250 60% varying Repairs & maintenance 2,000 75% varying Stores 1,000 100% varying Inspection 500 40% varying Depreciation 10,000 100% varying Administrative overhead 5,000 40% varying Selling overhead 3,000 40% varying Rs.62,750 Cost per unit Rs.12.55 docsity.com
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