Question No: 49: ( Marks: 3 )
Can differential cost costs be Incremental and Avoidable costs? Explain with examples.
Question No: 50 ( Marks: 3 )
The following information is available for Atlas Corporation to prepare a cash budget for the month of September:
· Cash on hand beginning of September Rs. 16,000
· Expected receipts in September Rs. 272,000
· Sales salaries paid Rs. 62,000
· Material purchases (all in cash) Rs. 190,000
· Depreciation Rs. 44,000
Required: Calculate ending cash balance in September. Also show complete working.
Question No 51: ( Marks: 5 )
A Manufacturing Company estimates its production. Material will require 900 units for January, 700 units for February and 2100 units for March. It takes 3 direct labor hours at a rate of Rs. 3.1 per hour to complete one unit.
Required: Prepare Labor cost budget cost.
Question No: 52 ( Marks: 5 )
Basit Ali Company produces and sells Makka Cola to retailers. The Cola is
bottled in 2-litter plastic bottles. The estimated budgeted sales for the year 2008 would be Rs. 80,000 and the estimated Profit for the year 2008 would be Rs. 4,060. The Margin of safety Ratio is calculated as 25%.
Required:
1- Breakeven Sales for the year 2008
2- Projected Income statement for the year 2008
Question No: 53 ( Marks: 5 )
Golden Company sells its product for Rs. 42 per unit. The company’s unit product cost based on the full capacity of 400,000 units is as follows:
Direct materials
Rs. 8
Direct labor
10
Manufacturing overhead
12
Unit product cost
Rs. 30
A special order offering to buy 40,000 units has been received from a foreign distributor. The only selling costs that would be incurred on this order would be Rs. 6 per unit for shipping. The company has sufficient idle capacity to manufacture the additional units. Two-thirds of the manufacturing overhead is fixed and would not be affected by this order. Assume that direct labor is an avoidable cost in this decision. In negotiating a price for the special order, calculate the minimum acceptable selling price per unit?
Can differential cost costs be Incremental and Avoidable costs? Explain with examples.
Question No: 50 ( Marks: 3 )
The following information is available for Atlas Corporation to prepare a cash budget for the month of September:
· Cash on hand beginning of September Rs. 16,000
· Expected receipts in September Rs. 272,000
· Sales salaries paid Rs. 62,000
· Material purchases (all in cash) Rs. 190,000
· Depreciation Rs. 44,000
Required: Calculate ending cash balance in September. Also show complete working.
Question No 51: ( Marks: 5 )
A Manufacturing Company estimates its production. Material will require 900 units for January, 700 units for February and 2100 units for March. It takes 3 direct labor hours at a rate of Rs. 3.1 per hour to complete one unit.
Required: Prepare Labor cost budget cost.
Question No: 52 ( Marks: 5 )
Basit Ali Company produces and sells Makka Cola to retailers. The Cola is
bottled in 2-litter plastic bottles. The estimated budgeted sales for the year 2008 would be Rs. 80,000 and the estimated Profit for the year 2008 would be Rs. 4,060. The Margin of safety Ratio is calculated as 25%.
Required:
1- Breakeven Sales for the year 2008
2- Projected Income statement for the year 2008
Question No: 53 ( Marks: 5 )
Golden Company sells its product for Rs. 42 per unit. The company’s unit product cost based on the full capacity of 400,000 units is as follows:
Direct materials
Rs. 8
Direct labor
10
Manufacturing overhead
12
Unit product cost
Rs. 30
A special order offering to buy 40,000 units has been received from a foreign distributor. The only selling costs that would be incurred on this order would be Rs. 6 per unit for shipping. The company has sufficient idle capacity to manufacture the additional units. Two-thirds of the manufacturing overhead is fixed and would not be affected by this order. Assume that direct labor is an avoidable cost in this decision. In negotiating a price for the special order, calculate the minimum acceptable selling price per unit?
Another Paper
1. Briefly describes the importance of material budget. ( Marks: 3 )
2. What is a principle budget factor? ( Marks: 3 )
3.
Production component Rates Per unit Rate
Direct material 2.5 lbs . Rs. 4.00 Rs. 10.00
Direct Labor .5 hr . Rs. 16.00 Rs. 8.00
VOH .5 hr . Rs. 4.00 Rs. 2.00
Fixed FOH Rs. 40,000 Rs. 2.50
Actual Output 16,000 units
Variable S&A Rs. 6.00 per unit
Fixed S&A Rs. 60,000
Selling price Rs. 40
Assume sales of 12,000 units.
Required: What is the profit under marginal and absorption costing method? ( Marks: 5 )
4. The Carter Manufacturing Company estimates its production requirements to be 30,000 units for October, 38,000 units for November and 41,000 units for December. It takes 3 direct labor hours at a rate of Rs. 3 per hour to complete one unit.
Prepare direct Labor budget cost for the last quarter of the year. ( Marks: 5 )
2. What is a principle budget factor? ( Marks: 3 )
3.
Production component Rates Per unit Rate
Direct material 2.5 lbs . Rs. 4.00 Rs. 10.00
Direct Labor .5 hr . Rs. 16.00 Rs. 8.00
VOH .5 hr . Rs. 4.00 Rs. 2.00
Fixed FOH Rs. 40,000 Rs. 2.50
Actual Output 16,000 units
Variable S&A Rs. 6.00 per unit
Fixed S&A Rs. 60,000
Selling price Rs. 40
Assume sales of 12,000 units.
Required: What is the profit under marginal and absorption costing method? ( Marks: 5 )
4. The Carter Manufacturing Company estimates its production requirements to be 30,000 units for October, 38,000 units for November and 41,000 units for December. It takes 3 direct labor hours at a rate of Rs. 3 per hour to complete one unit.
Prepare direct Labor budget cost for the last quarter of the year. ( Marks: 5 )
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