Costing - Study Mode

[#116] "After inviting tenders for supply of raw materials, two quotations are received as follows— Supplier P Rs 2.20 per unit, Supplier Q Rs 2.10 per unit plus Rs 2,000 fixed charges irrespective of the units ordered. The order quantity for which the purchase price per unit will be the same—"
Correct Answer

(B) 20,000 units

[#117] In case of joint products, the main objective of accounting of the cost is to apportion the joint costs incurred up to the split off point. For cost apportionment one company has chosen Physical Quantity Method. Three joint products ‘A’, ‘B’ and ‘C’ are produced in the same process. Up to the point of split off the total production of A, B and C is 60,000 kg, out of which ‘A’ produces 30,000 kg and joint costs are Rs 3,60,000. Joint costs allocated to product A is.
Correct Answer

(C) Rs 1,80,000

Explanation

Solution: Joint costs allocated to product A is: 360000 × 30000/60000 = Rs. 180000.

[#118] A transport company is running five buses between two towns, which are 50 kms apart. Seating capacity of each bus is 50 passengeRs Actually passengers carried by each bus were 75% of seating capacity. All buses ran on all days of the month. Each bus made one round trip per day. Passenger kms are:
Correct Answer

(C) 562500

[#119] The cost per unit of a product manufactured in a factory amounts to Rs 160 (75% variable) when the production is 10,000 units. When production increases by 25%, the cost of production will be Rs per unit.
Correct Answer

(C) Rs 152

Explanation

Solution: Cost p.u 160 75%is variable cost 120p.u 40rs p.u fixed cost (fixed cost not change when production unit increase or decrease) fixed cost is 40 * 10000 = Rs. 400000 Cal cost p.u if production increase by 25% 10000 + 25% = Rs. 12500 Total cost = variable cost + fixed cost (12500 * 120) + 400000 = Rs. 1900000 Cost p.u = 1900000 / 12500 = Rs. 152

[#120] Assertion (A) Cash flow statement as per the financial statements as well is incapable in revealing the overall financial position of a firm. Reason (R) Cash is an important constituent of the working capital based on the recorded facts only.
Correct Answer

(A) Both (A) and (R) are true and (R) is the correct explanation of (A)