(Pokhara University
Sinamangal, Kathmandu
Unit Test
Level: Bachelor Semester – Fall Year : 2006
Programme: BBA III Full Marks : 10
Course: Management Accountancy Time : 3hrs.
Q3. A manufacturing company with normal capacity of 30,000 units furnished you the following information.
Beginning inventory units............................................................................................................ 4,000
Units produce during the year..................................................................................................... 25,000
Units sold during the year ........................................................................................................... 20,000
Standard variable cost................................................................................................................. Rs.16 per unit
Fixed factory overhead at normal capacity............................................................................ Rs.600,000
Fixed selling and distribution cost.............................................................................................. Rs.150,000
Unit selling price............................................................................................................................ Rs.50
Required
a) Income statement under absorption costing [2]
b) Reconciled profit under variable costing [1]
Q3.) A firm has fixed costs of Rs. 10,000. The variable costs in manufacturing each unit of product are direct materials Rs. 4, direct labour Rs. 6.5 & variable overheads Rs. 2.5. The current selling price is Rs. 20 per unit.
Required:
i.The break-even point in units [1]
ii.The break- even point if material cost increase by Rs. 1 [1]
Q3.) Following information relate to a company;
| Output | Volume of production (units), X | Indirect cost (Rs), Y |
| Lowest | 7,000 | 28,000 |
| Highest | 14,000 | 42,000 |
Required:
a) Segregate fixed cost and variable cost using high–low point method. [2]
The manager of a Repair and Maintenance department of Nepal Transport Company Ltd. is response to a request submitted the following budget estimates for his department that are to be used to construct a flexible budget to be used during the coming budget year.
| Details of cost | Planned at 60,000direct repair hours | Planned at 90,000direct repair hours |
| Employees salaries Indirect repair material Miscellaneous costs | Rs.300,000 402,000 132,000 | Rs.300,000 608,000 168,000 |
Required:
a) Prepare a flexible budget for the department up to activity level of 100,000 repair hours (use increments of 10,000 hours) [3]
*****************************************Good Luck*************************************
(Pokhara University
Sinamangal, Kathmandu
Unit Test
Level: Bachelor Semester – Fall Year : 2006
Programme: BBA III Full Marks : 10
Course: Management Accountancy Time : 3hrs.
Q3.) The following details relate to a manufacturing company
Normal capacity.............................................................................................................. 25,000 units per year
Standard variable manufacturing expenses............................................................... Rs.120 per unit
Fixed manufacturing overhead ................................................................................... Rs.600,000 per year
Variable selling expenses ............................................................................................... Rs.6 per unit
Fixed selling expenses .................................................................................................... Rs.200,000
Unit sale price................................................................................................................... Rs.200
The operation results for the year ending December of the last year were as fallows:
Sales .................................................................................................................................. 20,000 units
Production......................................................................................................................... 30,000 units
Required:
a) Prepare variable costing income statement. [2]
b) Show the reconciled profit under absorption costing. [1]
Q3.) A firm has fixed costs of Rs. 5,000. The variable costs in manufacturing each unit of product are direct materials Rs. 2, direct labour Rs. 3.5 & variable overheads Rs. 2.5. The current selling price is Rs. 10 per unit.
Required:
i. The break-even point in units [1]
ii. The break- even point if material cost increase by Rs. 1 [1]
Q3.) Following information relate to a company;
| Output | Volume of production (units), X | Indirect cost (Rs), Y |
| Lowest | 3500 | 28,000 |
| Highest | 7,000 | 42,000 |
Required:
a) Segregate fixed cost and variable cost using high–low point method. [2]
Q3.) The manager of a Repair and Maintenance department of Nepal Transport Company Ltd. is response to a request submitted the following budget estimates for his department that are to be used to construct a flexible budget to be used during the coming budget year.
| Details of cost | Planned at 6,000direct repair hours | Planned at 9,000direct repair hours |
| Employees salaries Indirect repair material Miscellaneous costs | Rs.30,000 40,200 13,200 | Rs.30,000 60,800 16,800 |
Required:
a) Prepare a flexible budget for the department up to activity level of 10,000 repair hours (use increments of 1,000 hours) [3]
*****************************************Good Luck*************************************
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