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Question 1 Amman, Namman, Pulkit and Amit started with
a fast food restaurant, couples of years back. This year all the partners of
the restaurant are planning to come up with a chain of restaurant in the city
and therefore wants to employ some additional staff. One of the partner, gives
an advertisement for recruitment in the Newspaper, for the position of Cost
Accountant as well as Management Accountant. However, Mr. Shinde, the HR
manager of the restaurant is confused about difference in the functions
performed by the Cost Accountant and Management Accountant. Discuss how you
will convince Mr. Shinde that both the profiles have certain specific set of
functions to be performed, which are different from each other.
Answer: Cost Accounting
Cost accounting involves the techniques for:
·
determining the
costs of products, processes, projects, etc. in order to report the correct
amounts on the financial statements, and
·
assisting
management in making decisions and in the planning and control of an
organization.
For example
Question 2 Prachi Pvt Ltd manufactures two types of
wooden boxes, using certain common facilities. The following cost data is
presented to you –
Box A Type Box
B Type
Units produced 2000
3000
Direct Labour hours per unit 1 2
Machine hours per unit 5 7
Set up machines 10
15
Orders 10
20
Machine activity expenses Rs.
5,00,000
Expenses incurred to set up the machines Rs.
50,000
Expenses in relation to the orders received Rs.15,500
Calculate the overhead per unit absorbed using the
most practical and effective approach, which gives relevance to the casual
relationship of cost drivers to activities. Also, discuss the approach in
detail.
Answer: Activity based costing
Activity based costing is a managerial accounting method that traces
overhead costs to activities and then assigns them to objects. In other words,
it’s a way to allocate indirect, overhead costs to products or departments that
generate these costs in the production process.
ABC costing
Question 3 A product ‘X’ passes through two processes.
The output of Process I becomes the input of Process II. The quantity of raw
material introduced into process I is 20000kgs @ 20 per Kg. The additional cost
incurred and output obtained for one of the month under review is as under-
Process I Process
II
Direct Material 80000
50000
Direct Labour 60000
20000
Production Overhead 24000
11000
Normal Loss 5%
2%
Output 18500
18200
Loss resalable as scrap per unit Rs10 Rs 5
Calculate i. Value of Abnormal gain/ loss in Process I
ii. Value of Abnormal gain/ loss in Process II
Answer: i)
Process I
|
Particulars
|
unit
|
Amount
|
Particulars
|
unit
|
Amount
|
|
To input
|
20000
|
400000
|
By normal loss
|
1000
|
10000
|
|
To direct wages
|
|
60000
|
By abnormal loss @ 29.16
|
500
|
14580
|
Complete
Assignment available for NMIMS
in
rs 250 per assignment only
You
can call us 87-55555-879
Within
1 hour will revert you by mail
Sample only
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