Q1. A, B & N are partners doing business as engineers sharing profits and losses equally.

A
is a sleeping partner; B looks after factory and N after the administration. The following
figures are extracted from their books for the year ended 30th June, 2014:
Particulars
Amount (Rs.)
Particulars
Amount (Rs.)
Raw Materials Purchased
50,000 Advertising
3,000
Opening Stock
Closing Stock
Raw Materials
20,000 Raw Materials
20,000
Finished Goods
5,000 Finished Goods
3,000
Power
1,000 Agents Commission
5,000
Office Salaries
10,000 Plant Maintenance
4,000
Wages: Direct
30,000 Rent
Rates
Taxes(9/10
1,000
Indirect
5,000 Works, 1/10 Office)
Sundry ExpensesWorks
1,000 Salary to Partners:B
2,000
Office
2,000 N
1,000
Sales
2,00,000 Building Repairs
1,000
Carriage Outward
3,000 Depreciation
Plant & Machinery
2,000
Building
1,000
Travelling Expenses
1,000 Carriage Inward
1,000
Building is occupied 9/10 by factory and 1/10 by office.
You are required to prepare a detailed cost statement, assuming that 10,000 units were
produced during the year.
State by what % the average selling price should be raised to double the net profit.
Q2.
Particulars
Raw materials
Direct Wages
Opening Stock
Raw Materials
Finished Goods (1600 units)
Opening WIP

Amount
Particulars
Amount
48000
Office & Admin
3200
40000
Closing WIP
6400
Closing Stock
8000
Raw Materials
8800
6400
Finished Goods (3200 units) ?
1920
Advertising, Discount and 40 paise per unit
selling cost
Works Overheads
16800
Sale of Finished Goods
120000
During the year 25,600 units were produced. From the above prepare a cost sheet showing
unit cost
Q3. Bajaj Electricals Ltd manufactured and sold 1000 electric irons during the year ended
31st December 2014. Following were the expenses for manufacture of 1000 electric
irons
Particulars
Amount
Particulars
Amount
Materials
80000
Direct Wages
120000
Manufacturing Cost
50000
Selling Exp
40000
Other overhead Exp
90000
For the year ending on 31st December, 2015 it was estimated:
Output and sales will be 1500 electric Irons
Cost of materials will rise by 25% per unit
Wages per unit will decrease by 10%
Manufacturing cost will rise in proportion to the combined cost of materials and wages
Selling expenses per unit will remain unchanged.
Other overheads will increase by Rs. 60000
Prepare cost statement showing price at which the electric irons should be marketed so as to
share a profit of 20% on selling price. Workings to form part of answer.

Q4. M/s Bombay Ltd produces 60,000 units annually at its optimum (100%) capacity. The
estimated costs of production are as under:
Direct Expenses
Indirect Expenses
Direct Materials Rs. 3 p.u. Fixed
Rs. 150000 p.a.
Direct Labour
Rs. 2 p.u. Variable
Rs. 5 p.u.
Semi variable
Rs. 50,000 p.a. upto 50% capacity and
an extra expense of Rs. 10,000 for every
25% increase in capacity or part thereof
The factory produces only against orders and not for own stocks. If the production
programme of the factory is as indicated below and the management desires to ensures a
profit of Rs. 100000 for the year, work out the average selling price at which each unit should
be quoted.
First three months of the year (50% Capacity)
Remaining nine months (80% Capacity)
Ignore selling and distribution overheads
Q5. The All India waterproof manufacturers ltd manufactured and sold 850 waterproofs in
the year ending 31st March, 2015. The summarized Trading and Profit and Loss A/c is
given below:
Particulars
Amt (Rs.)
Particulars
Amt (Rs.)
To Cost of Materials
64,000
By Sales
3,20,000
To Direct Wages
96,000
To Manufacturing Exps
40,000
To Gross Profit
1,20,000
3,20,000
3,20,000
To Office Salaries
48,000
By Gross Profit
1,20,000
To Rent, Rates & Taxes
8,000
To Selling Expenses
16,000
To General Expenses
24,000
To Net Profit
24,000
1,20,000
1,20,000
For the year ending 31st March, 2016, it has been estimated that:
1. Output and sales will be 1000 waterproofs
2. Price of materials will rise by 25% on the previous years level
3. Wages will rise by 12.5%
4. Manufacturing expenses will rise in proportion to the combined cost of materials and
wages.
5. Selling expenses per unit will remain unaffected by the rise in the output.
6. Other expenses will remain unaffected by the rise in the output.
Prepare a cost statement, showing the price at which the waterproofs would be marketed so as
to show a profit at 12% on the selling price.

Q6. M/S Universal products manufacturers of bags, manufactures two types of bags styled
as dolly Bag and Jolly Bag
You are supplied with the following data:
Direct Material consumed
2560000
Direct Wages
2400000
Production overheads
495000
The following is the additional information:
Direct materials per unit for type dolly was 160% of that of jolly
Each unit of dolly and jolly has to pass through 2 departments viz department X and Y for
completion. The time taken by each unit is as under:
Department X
Department Y
Dolly
3 hours
2 hours
Jolly
2 hours
1 hour
The hourly rate of department X is double than that of department Y
Production overheads for Jolly was 60% of that of Dolly
Administrative overheads were Rs. 15 per unit of Dolly and Rs 9 per unit of Jolly
The total selling and distribution overheads amounted to Rs. 492500 to be allocated as
Dolly Rs. 364500
Jolly Rs. 128000
The production was as follows
Dolly 150000 units (9/10 sold)
Jolly 80000 units (8/10 sold)
Selling prices per unit
Dolly Rs 55
Jolly Rs 35