Acharya N G Ranga Agricultural University 2006 Diploma Accounting

Direct Wages 56,250 35,000 44,900
Direct Expenses 51,250 6,875 11,500
Value of Opening Stock per Unit 25 31 40
Scrap Value per Unit 13.50 11.25 21.00
Units Units Units
Output 9,750 9,625 8,000
Stock of Process Output:
01-01-2005 1,500 1,375 2,000
31-12-2005 1,250 2,000 1,000
Percentage of Wastage 2 5 10

*
* 10,000 units of Direct Material were introduced in Process A at the rate of Rs. five per unit. The percentage of wastage is calculated on the number of units entering the process concerned. From the above info of `DE' Enterprises prepare : (1) Process Accounts,
* (2) Process Stock Accounts,
* (3) Normal Loss Account,
* (4) Abnormal Loss Account,
* (5) Abnormal Gain Account.
* Value closing stock at the respective Process Cost.

*
* Q.7 (a) compute material and labour variances from the subsequent data: 6
*
For five units of Product A, the Standard Data are
*
*
Material — 40 kg. @ Rs. 25 per kg.
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Labour — 100 hours @ Rs. 2.50 per hour.
*
*
true data are :
*
*
true Production — 1000 Units.
*
Material — 7,840 kg. @ Rs. 27 per kg.
*
Labour — 19,800 hours @ Rs. 2.60 per hour.
*
* (b) From the subsequent data calculate nine
1. P/V Ratio
2. B.E.P. in Rupees and in Unit.
3. Number of Units to be sold to earn a profit of Rs. 7,50,000.
*
Sales Price............................... Rs. 20 per Unit
*
Direct Material........................... Rs. five per Unit
*
Direct Wages................................ Rs. six per Unit
*
Variable Administrative Overheads............Rs. three per Unit
*
Fixed Factory Overhead.......................Rs. 6,40,000 per year
*
Fixed Administrative Overheads...............Rs. 1,52,000 per year

*
*
Q.8 From the books of accounts of M/s. Avdhoot Enterprises, the subsequent details have been extracted for the Quarter Ending December 31, 2005:- 15
*
Particulars Rs.
Stock of Materials — Opening 2,70,000
Stock of Materials — Closing 3,00,000
Purchases of Materials 12,48,000
Direct Wages 3,57,600
Direct Expenses 1,20,000
Indirect Wages 24,000
Salaries to Administrative Staff 60,000
Carriage Inwards 48,000
Carriage Outwards 37,500
Manager's Salary 72,000
General Charges 37,200
Legal charges for Criminal Suit 20,000
Commission on sales 28,000
Fuel 96,000
Electricity charges (Factory) 72,000
Directors' Fees 36,000
Repairs to Plant and Machinery 63,000
Rent, Rates and Taxes —Factory 18,000
Rent, Rates and 'Faxes — Office 9,600
Depreciation on Plant and Machinery 45,000
Depreciation on Furniture 3,600
Salesmen's Salaries 50,000
Audit Fees 18,000

*
1. The Manager's time is shared ranging from the factory and the office in the ratio of 20:80.
2. Carriage outwards include Rs. 7,500 being carriage inwards on Plant and Machinery.
3. Selling Price is the 120% of the cost price.
* From the above details prepare detailed cost sheet for the quarter ending 31-12-2005 and ascertain sales.
*
*
Q.9 S. V. Construction Ltd. have found a contract for construction of a Building. The value of the contract is Rs. 45,00,000. The work commenced on first July, 2004 and completed on 31st December, 2005. The subsequent info relates to this contract: 15
Particulars 31-12-2005 (RS.) 31-12-2004 (RS.)
Material Issued 13,50,000 3,75,000
Direct Wages 10,35,000 4,70,000
Direct Expenses 1,00,000 45,000
Indirect Expenses 27,000 6,000
Plant Issued ---- 63,000
Sub contract charges 60,000 15,000
Work Certified (cumulative) 45,00,000 10,00,000
Work Uncertified ---- 35,000
*
*

The above plant was specially issued for the contract. The residual value of the plant at the end of the project was estimated to be Rs. 3,000.

The contractee has agreed to pay 90% of the work certified. The accounts are closed on 31st December, every year. Prepare —
* (1) Contact Account and
* (2) contractee Account for 2 years 2004 and 2005.
* Show the relevant items in Balance Sheet as on 31-12-2004.
*
* Q.10 (a) discuss the various Overhead Cost Variances. 8
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(b) What is Break-Even-Point ? elaborate the advantages and limitations of Break-Even Point ?

Earning:   Approval pending.