A toy manufacturing factory revised the salary scale of its employee depending on the number of years of service. calculate and display the revised amount an employee will get as salary, given the following rate of increment:
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Answer Question no.1 which is compulsory and any three from the rest in this section.
1. Answer the following [6 x 2 =12]
(a) What are the items to be „excluded‟ for the purpose of determining valuation of materials
as per CAS -6?
Answer.
The following items are to be „excluded‟ for the purpose of determining valuation of materials:
(i) Finance costs
(ii) Abnormal losses due to shrinkage or evaporation or gain due to elongation or
absorption of moisture before receipt of material
(iii) Changes in foreign exchange rate from the rate on date of transaction till date of
payment
(iv) Demurrage or detention charges or penalty levied by transport or other authorities
(v) Imputed costs
(vi) Cost of self-manufactured components and sub-assemblies shall not include share of
other administrative overheads, finance cost and marketing overheads
(vii) Material cost of abnormal scrap/defectives not to be included
(b) Consider the following data pertaining to the production of a company for a particular
month :
Opening stock of raw material ` 11,570
Closing stock of raw material ` 10,380
Purchase of raw material during the month ` 1,28,450
Total manufacturing cost charged to product ` 3,39,165
Factory overheads are applied at the rate of 45% of direct labour cost.
Calculate the amount of factory overheads applied to production.
Answer.
Raw material used = Op. Stock + Purchases – Cl. Stock
= ` 11,570 + ` 1,28,450 – ` 10,380 = ` 1,29,640
Manufacturing cost = Raw material used + Direct labour + Factory overhead
` 3,39,165 = ` 1,29,640 + Direct labour + 45% of Direct labour
1.45 Direct labour = ` 2,09,525
Direct labour = ` 1,44,500
The amount of factory overhead = 45% of ` 1,44,500 = ` 65,025.
(c) If the minimum stock level and average stock level of raw material “A” are 4,000 and
9,000 units respectively, find out its reorder quantity.
Answer.
Average stock level = Minimum stock level + ½ Reorder quantity
9,000 units = 4,000 units + ½ Reorder quantity
½ Reorder quantity = 9,000 units – 4,000 units
Reorder level = 5, 000 units / 0.5 = 10,000 units
1. Answer the following [6 x 2 =12]
(a) What are the items to be „excluded‟ for the purpose of determining valuation of materials
as per CAS -6?
Answer.
The following items are to be „excluded‟ for the purpose of determining valuation of materials:
(i) Finance costs
(ii) Abnormal losses due to shrinkage or evaporation or gain due to elongation or
absorption of moisture before receipt of material
(iii) Changes in foreign exchange rate from the rate on date of transaction till date of
payment
(iv) Demurrage or detention charges or penalty levied by transport or other authorities
(v) Imputed costs
(vi) Cost of self-manufactured components and sub-assemblies shall not include share of
other administrative overheads, finance cost and marketing overheads
(vii) Material cost of abnormal scrap/defectives not to be included
(b) Consider the following data pertaining to the production of a company for a particular
month :
Opening stock of raw material ` 11,570
Closing stock of raw material ` 10,380
Purchase of raw material during the month ` 1,28,450
Total manufacturing cost charged to product ` 3,39,165
Factory overheads are applied at the rate of 45% of direct labour cost.
Calculate the amount of factory overheads applied to production.
Answer.
Raw material used = Op. Stock + Purchases – Cl. Stock
= ` 11,570 + ` 1,28,450 – ` 10,380 = ` 1,29,640
Manufacturing cost = Raw material used + Direct labour + Factory overhead
` 3,39,165 = ` 1,29,640 + Direct labour + 45% of Direct labour
1.45 Direct labour = ` 2,09,525
Direct labour = ` 1,44,500
The amount of factory overhead = 45% of ` 1,44,500 = ` 65,025.
(c) If the minimum stock level and average stock level of raw material “A” are 4,000 and
9,000 units respectively, find out its reorder quantity.
Answer.
Average stock level = Minimum stock level + ½ Reorder quantity
9,000 units = 4,000 units + ½ Reorder quantity
½ Reorder quantity = 9,000 units – 4,000 units
Reorder level = 5, 000 units / 0.5 = 10,000 units
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