7) In a year, an engineering firm manufactured table fans at an average640perweekDetermine the total number of table fans produced by the firm during the whole year. About the author Delilah
Answer: PAPER – 3: COST AND MANAGEMENT ACCOUNTING Question No. 1 is compulsory. Attempt any four questions out of the remaining five questions. In case, any candidate answers extra question(s)/ sub-question(s) over and above the required number, then only the requisite number of questions first answered in the answer book shall be valued and subsequent extra question(s) answered shall be ignored. Working notes should form part of the answer Question 1 Answer the following: (a) Surekha Limited produces 4,000 Litres of paints on a quarterly basis. Each Litre requires 2 kg of raw material. The cost of placing one order for raw material is ` 40 and the purchasing price of raw material is ` 50 per kg. The storage cost and interest cost is 2% and 6% per annum respectively. The lead time for procurement of raw material is 15 days. Calculate Economic Order Quantity and Total Annual Inventory Cost in respect of the above raw material. (b) The following data is presented by the supervisor of a factory for a Job: ` per unit Direct Material 120 Direct Wages @ ` 4 per hour (Departments A-4 hrs, B-7 hrs, C-2 hrs & D-2 hrs) 60 Chargeable Expenses 20 Total 200 Analysis of the Profit and Loss Account for the year ended 31st March, 2019 Material 2,00,000 Sales 4,30,000 Direct Wages Dept. A 12,000 Dept. B 8,000 Dept. C 10,000 Dept. D 20,000 50,000 Special Store items 6,000 © The Institute of Chartered Accountants of India Reply
Answer:
PAPER – 3: COST AND MANAGEMENT ACCOUNTING
Question No. 1 is compulsory.
Attempt any four questions out of the remaining five questions.
In case, any candidate answers extra question(s)/ sub-question(s) over and above the required
number, then only the requisite number of questions first answered in the answer book shall be
valued and subsequent extra question(s) answered shall be ignored.
Working notes should form part of the answer
Question 1
Answer the following:
(a) Surekha Limited produces 4,000 Litres of paints on a quarterly basis. Each Litre requires 2 kg of
raw material. The cost of placing one order for raw material is ` 40 and the purchasing price of
raw material is ` 50 per kg. The storage cost and interest cost is 2% and 6% per annum
respectively. The lead time for procurement of raw material is 15 days.
Calculate Economic Order Quantity and Total Annual Inventory Cost in respect of the above
raw material.
(b) The following data is presented by the supervisor of a factory for a Job:
` per unit
Direct Material 120
Direct Wages @ ` 4 per hour
(Departments A-4 hrs, B-7 hrs, C-2 hrs & D-2 hrs) 60
Chargeable Expenses 20
Total 200
Analysis of the Profit and Loss Account for the year ended
31st March, 2019
Material 2,00,000 Sales 4,30,000
Direct Wages
Dept. A 12,000
Dept. B 8,000
Dept. C 10,000
Dept. D 20,000 50,000
Special Store items 6,000
© The Institute of Chartered Accountants of India
Answer:
An average of 33280 fans can be produced by the firm during the whole year