Cost-V Sem BBM
Cost-V Sem BBM
Cost-V Sem BBM
2. Geetanjali stores received a consignment of articles M and N. The invoice gave the following data.
M- 500kgs @ Rs.30 per kg- Rs.15,000; N-300kgs @ Rs.40 per kg- Rs.12,000;
Sales tax- Rs.640; Cost of container ( 8 containers)Rs.800. A 5% of cash discount for payment made within
one week. Return value of a container Rs.50 each. Calculate the cost per kg of M and N.
5. A firm purchased a raw material Z from Venus Ltd. Quantity purchased 4500kgs at Rs.20 per kg. company
allows a trade discount of 10%, Freight charges Rs.2 per kg, Inspection charges Re.0.10 per kg, unloading
charges 15 paise per kg. calculate purchase price of material Z (2011, 08 marks)
6. A lorry load of materials of mixed goods was purchased for Rs.100000 by mr. kishen. Later on these were
sorted out into following categories
Category A-1000 units, selling price Rs.20 per unit
Category B-2000 units, selling price Rs.22.5 per unit
Category C-2400 units, selling price Rs.25 per unit
Find the purchase price per unit of each category of material assuming that all grades yield same rate of
profit (2013, 08 marks)
7. For posting in the stores ledger, what values would you adopt in respect of the transactions in the following
purchase invoice?
1000 kgs of material A at Rs.25 per kg (one case) Rs.25000
500 kgs of material B at Rs.10 per kg (one case) Rs.5000
2000 kgs of material C at Rs.15 per kg (two case) Rs.30000
Rs.60000
Less: trade discount 10% Rs.6000
Rs.54000
Add: freight Rs.2000
Not returnable cases @ Rs.10 each Rs.40
Insurance Rs.1430
Sales tax @ 4.5% Rs. 2430 Rs.5900
TOTAL Rs.58550
EOQ:
8. Cost of placing an order Rs.100; Annual carrying cost per unit Rs.15;
Usage of material per week: Minimum -25 units; Maximum – 75 units;
10. Yearly consumption 800 units, Cost per unit Re.0.30; Buying cost per order Rs.7.00; warehouse charges of
inventory 15%. Find out EOQ
Ordering Level
11. Calculate for each material minimum level, maximum level and reorder level.
Minimum usage- 50 units per week; Maximum usage 150 units per week; Normal usage – 100 units per week
Reordering quantities- 600 units-X Delivery periods: 4-6 weeks-X
1000 units-Y 2-4 weeks-Y
13. Ram enterprises manufactures a product M. the following particulars are available.
Cost of placing an order Rs.100, Annual carrying cost per unit Rs.3.25, Minimum usage 25 units per week,
maximum usage 75 units per week, re-order period 4-6 weeks.
Calculate: Re-order Quantity, Re-order level, Minimum level and Maximum level.
Bin Card:
14. The following information regarding coal is obtained from the stores record of Ganesh steels Ltd.
Dec 2010
01 opening balance 500 tons
04 issuing on MR No.85 160 tons
05 received from vendor vide GR no.7 240 tons
08 issued on MR no.86 180 tons
12 issued on MR no.87 60 tons
17 received from vendor vide GR no.8 200 tons
24 issued on MR no.88 150 tons
30 received from vendor vide GR no.9 250 tons
31 issued on MR no.89 170 tons
Stock verified on 5-12-2010 revealed that a shortage of 200 tons and 100 tons of surpluses on 26-12-2010.
The minimum stock level is 200 tons. The ordering level is 300 tons. Prepare a Bin Card No.20 for the above
transactions. (2012, 8 marks)
15. The following information regarding coal is obtained from the stores record of ABC Ltd.
Jul 2013
01 opening balance 7500 kgs
02 issuing on MR No.1 3900 kgs
02 issuing on MR No.2 600 kgs
03 received from vendor vide GR no.31 9000 kgs
03 issuing on MR No.3 3000 kgs
04 issuing on MR No.4 1500 kgs
06 received from vendor vide GR no.80 3000 kgs
07 issuing on MR No.5 1350 kgs
Stock verified on 6-7-2013 revealed that a shortage of 150 kgs and 10 kgs of surpluses on 02-07-2013.
Prepare a Bin Card No.63 for the above transactions. (2013, 08 marks)
16. The following information regarding coal is obtained from the stores record of canara steels Ltd.
Dec 2010
01 opening balance 200 tons
04 issuing on MR No.285 83tons
05 received from vendor vide GR no.77 120 tons
08 issued on MR no.286 92 tons
12 issued on MR no.287 30 tons
17 received from vendor vide GR no.88 100 tons
24 issued on MR no.288 69 tons
30 received from vendor vide GR no.99 125 tons
31 issued on MR no.289 85 tons
Stock verified on 26-12-2010 revealed that a shortage of 5 tons. The minimum stock level is 50 tons. The
ordering level is 100 tons. Maximum level is 200 tons. Prepare a Bin Card No.23 for the above transactions.
(2011, 08 marks)
FIFO:
17. From the following particulars, write up a stores ledger card in the prescribed form using FIFO method
AUGUST 2007
01 opening balances 250 units at a total value of Rs.275
03 received 100 units at Rs.1.20 per unit
04 issued 50 units
06 received 800 units at Rs.1.30 per unit
07 issued 300 units
08 returned to stores 20units, issued on 4th august
12 received 300 units at Rs.1.40 per unit issued 320 units
15 issued 320 units
18 received 100 units at Rs.1.40 per unit
20 stock verification revealed a loss of 20 units
21 issued 100 units
23 returned to vendors 30 units, received on 18th August
25 transferred from Job A to Job B, 50 units
26 received 200 units at Re.1 per unit
28 Freight paid on purchase made on 25th August, Rs.70
30 issued 150 units
31 excess of 5 units were found on stock verification
18. From the following particulars, write up a stores ledger card in the prescribed form using FIFO method
January 2012
01 Balance 500 kg @ Rs.2 per kg
02 Ordered 350kg, purchase order no. 20 to dept A
09 Issued 125 kg MR no.61 to dept A
12 Received 180 kg of purchase order no. 20 kg @ Rs.3 per kg
15 Ordered 350 kg P.O no. 25 expected on 20th January
16 Issued 175kg MR No.65 to dept B
20 Received 200kg, P.O no.25 Rs.4 per kg
21 It was discovered that 5kg, received on 12-1-2012 P.O. No. 20 were defective and so were returned to
vendor
24 Received 170 kg,(balance of PO no.20) at Rs.3 each
26 Issued 100 kg, MR No.70 to dept C
29 Dept. C returned to store room 25kg earlier issued on 26-1-2012
30 Issued 125kg MR No.75 to dept A
19. From the following particulars pertaining to the material “MIX” prepare a store ledger card using FIFO
method of pricing the material during 2010.
February 1,2010: Opening stock 600 units @40 per unit.
Purchases:
Date Quantity Rate GR No
10 400 38 446
20 480 44 447
25 200 48 449
27 225 51 451
Issues
Date Quantity MR.No Dept.
06 500 617 A
16 130 620 B
26 360 716 T
28 217 728 X
Additional Information
Feb 14 received back from Dept A 30 units
Feb 18 shortage of 20 units as per stock verification
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CHAPTER 4-LABOUR COSTING
Calculation of WAGE
1. Calculate the wage per hour.
a) Basic pay Rs.200 per day
b) DA Rs.1000 per month,
c) Leave salary 10% of basic and DA,
d) Employer’s contribution to PF 8% of (a+b+c)
e) Employers’ contribution to ESI 2.5% of (a+b+c)
f) Expenditure amenities to labour Rs.200 per head per month. Number of working days in a month 25
days of 8 hours each.
3. The following particulars are taken from the books of Prajna Ltd. for the month of july 204, relating to a dept
where 25 workers are employed
Basic wages Rs.20,000 Dearness Allowance Rs.10000
House rent recovered Rs.4000 Loan recovered Rs.6000
Night shift allowance Rs.3000 overtime allowance Rs.3000
PF Rs.5000 ESI contribution Rs.1000
Canteen expenses Rs.1500 bonus 20% on basic wage
The factory worked for 25 days of 8 hours each in July. The workers are entitled to 5% of the total working
days as leave on full pay. Normal idle time is 10%. The contribution of ESI and PF are in the proportion of 6:4
and 1:1 by the employer and employee respectively.
Ascertain :
a) Labour cost
b) Labour cost per hour
c) Cash required for payment of wage
INCENTIVE PLANS
5. From the following information, calculate the earnings of A, B and C on Taylor’s differential piece rate
system, for a day of 8 hours.
Std production 10 units per hour Time rate Rs.40 per hour
Actual production A- 50 units, B- 79 units and C- 81 units
6. From the following information, calculate the earnings of A,B,C & D under Taylor’s differential piece rate
system.
The working hours in a week consisted of 48 hours
Std output: 2 units per hour. Time rate Rs.30 per hour
Actual output: A- 90 units B- 95 units C- 96 units D- 103 units
7. Calculate the earnings of X and Z under Taylor’s differential piece rate system
Normal rate per hour is Rs.24. Std time per unit is 30 seconds.
Differentials to be applied: 80% of piece rate below standard and 120% of piece rate at or above standard.
Worker A produces 800 units per day and worker B produces 1000 units.
8. From the following information, calculate the earnings of Arun and Bhavan under Taylor’s differential piece
rate system. The working hours in a week is 48 hours.
Std output: 2 units per hour. Time rate Rs.30 per hour
Actual output: Arun- 95 units and Bhavan- 103 units
Differential piece rates are
Low piece rate at 80% of normal production
High piece rate at 120% of normal production
11. A worker takes 8 hours to complete a job under a scheme of payment by results. The standard time allowed
for the job is 10 hours. His wage rate is Rs.3.50 per hour. Material cost of the job is Rs.24 and overheads are
recovered at 150% of total direct wages. Calculate the cost of the job under Rowan and Halsey Premium
plan.
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4. The following particulars relate to the manufacturing company which has 3 production department X Y and Z
an 2 service departments S1 and S2
X Y Z S1 S2
As per Primary distribution 6300 7400 2800 4500 2000
The company decides to charge service departments cost to the production departments and other service
department on the basis of following percentages.
Production department Service department
X Y Z S1 S2
S1 40% 30% 20% - 10%
S2 30% 30% 20% 20% -
Find out the total overhead of production department by using simultaneous equation method
6. In a factory there are 3 production departments A,B & C and 2 service departments D and E. The following
figures are for January 2010. Prepare secondary distribution under repeated distribution method
Rent Rs.10,000 Depreciation of machinery Rs.8,000 Sundries Rs.10,000
Lighting Rs.6,000 indirect Wages Rs.1,500 Amenities to staff Rs.8,000
Power Rs.15,000 supervision charges Rs.6,000
particulars Production dept Service dept
A B C D E
Floor area 2000 1000 3000 2000 2000
Light points 20 30 10 30 30
Direct wages 30000 40000 10000 25000 25000
HP of machines 3 3 4 3 2
Value of machines 20000 30000 10000 10000 -
No.of workers 20 30 25 25 20
The expenses of D and E are to be allocated as follows.
Production department Service department
A B C D E
D 20% 30% 40% - 10%
E 40% 20% 20% 20% -
10. From the following particulars calculate the machine hour rate.
Cost of machine Rs.1,06,000; Estimated scrap value Rs.8000; Estimated working life 20,000 hours;
Estimated cost of repair during the working life of machine Rs.12000
Power used for machine 10 units at Rs.1.40 per hour
Rent and rate per month (10% to be charged to the machine) Rs.3,000
Overhead charges allotted to this machine per month Rs.800
Normal working hours 180 per month
12. Compute the machine hour rate for machine purchased from Sunil Pvt Ltd. to cover the following expenses:
Rent of the department (space occupied by the machine is ¼ of the department) Rs. 6000 p.a.
Lighting (no. of men in the dept 15 and 3 men are employed in this machine)Rs.2500 p.a
Insurance Rs.600 p.a. & Cotton waste oil and sundries Rs.400 p.a. Other details:-
a) Machine will consume 5 units of power per hour at a cost of Rs.1 per unit
b) Machine will work for 2300 hours p.a. c) Base period 1 year