This document provides financial information for a partnership of engineers called A, B & N for the year ending June 30, 2014. It includes details of expenses like raw materials, wages, rent, salaries, repairs, and sales. It also provides two additional questions. The first asks to prepare a detailed cost statement assuming 10,000 units were produced and the % the selling price needs to be raised to double net profit. The second asks to prepare a cost sheet showing unit cost based on information provided about raw materials, wages, stock, and overhead costs.

1. Q1. A, B & N are partners doing business as engineers sharing profits and losses equally. A
is a sleeping partner; B looks after factory and N after the administration. The following
figures are extracted from their books for the year ended 30th
June, 2014:
Particulars Amount (Rs.) Particulars Amount (Rs.)
Raw Materials Purchased 50,000 Advertising 3,000
Opening Stock
Raw Materials
Finished Goods
20,000
5,000
Closing Stock
Raw Materials
Finished Goods
20,000
3,000
Power 1,000 Agent’s Commission 5,000
Office Salaries 10,000 Plant Maintenance 4,000
Wages: Direct
Indirect
30,000
5,000
Rent Rates Taxes(9/10
Works, 1/10 Office)
1,000
Sundry ExpensesWorks
Office
1,000
2,000
Salary to Partners:B
N
2,000
1,000
Sales 2,00,000 Building Repairs 1,000
Carriage Outward 3,000 Depreciation
Plant & Machinery
Building
2,000
1,000
Travelling Expenses 1,000 Carriage Inward 1,000
Building is occupied 9/10 by factory and 1/10 by office.
You are required to prepare a detailed cost statement, assuming that 10,000 units were
produced during the year.
State by what % the average selling price should be raised to double the net profit.
Q2.
Particulars Amount Particulars Amount
Raw materials 48000 Office & Admin 3200
Direct Wages 40000 Closing WIP 6400
Opening Stock
Raw Materials
Finished Goods (1600 units)
8000
6400
Closing Stock
Raw Materials
Finished Goods (3200 units)
8800
?
Opening WIP 1920 Advertising, Discount and
selling cost
40 paise per unit
Works Overheads 16800 Sale of Finished Goods 120000
During the year 25,600 units were produced. From the above prepare a cost sheet showing
unit cost
Q3. Bajaj Electricals Ltd manufactured and sold 1000 electric irons during the year ended
31st
December 2014. Following were the expenses for manufacture of 1000 electric
irons
Particulars Amount Particulars Amount
Materials 80000 Direct Wages 120000
Manufacturing Cost 50000 Selling Exp 40000
Other overhead Exp 90000
For the year ending on 31st
December, 2015 it was estimated:
Output and sales will be 1500 electric Irons
Cost of materials will rise by 25% per unit
Wages per unit will decrease by 10%
Manufacturing cost will rise in proportion to the combined cost of materials and wages
Selling expenses per unit will remain unchanged.
Other overheads will increase by Rs. 60000
Prepare cost statement showing price at which the electric irons should be marketed so as to
share a profit of 20% on selling price. Workings to form part of answer.

2. Q4. M/s Bombay Ltd produces 60,000 units annually at its optimum (100%) capacity. The
estimated costs of production are as under:
Direct Expenses Indirect Expenses
Direct Materials Rs. 3 p.u. Fixed Rs. 150000 p.a.
Direct Labour Rs. 2 p.u. Variable Rs. 5 p.u.
Semi variable Rs. 50,000 p.a. upto 50% capacity and
an extra expense of Rs. 10,000 for every
25% increase in capacity or part thereof
The factory produces only against orders and not for own stocks. If the production
programme of the factory is as indicated below and the management desires to ensures a
profit of Rs. 100000 for the year, work out the average selling price at which each unit should
be quoted.
First three months of the year (50% Capacity)
Remaining nine months (80% Capacity)
Ignore selling and distribution overheads
Q5. The All India waterproof manufacturers ltd manufactured and sold 850 waterproofs in
the year ending 31st
March, 2015. The summarized Trading and Profit and Loss A/c is
given below:
Particulars Amt (Rs.) Particulars Amt (Rs.)
To Cost of Materials 64,000 By Sales 3,20,000
To Direct Wages 96,000
To Manufacturing Exps 40,000
To Gross Profit 1,20,000
3,20,000 3,20,000
To Office Salaries 48,000 By Gross Profit 1,20,000
To Rent, Rates & Taxes 8,000
To Selling Expenses 16,000
To General Expenses 24,000
To Net Profit 24,000
1,20,000 1,20,000
For the year ending 31st
March, 2016, it has been estimated that:
1. Output and sales will be 1000 waterproofs
2. Price of materials will rise by 25% on the previous year’s level
3. Wages will rise by 12.5%
4. Manufacturing expenses will rise in proportion to the combined cost of materials and
wages.
5. Selling expenses per unit will remain unaffected by the rise in the output.
6. Other expenses will remain unaffected by the rise in the output.
Prepare a cost statement, showing the price at which the waterproofs would be marketed so as
to show a profit at 12% on the selling price.

3. Q6. M/S Universal products manufacturers of bags, manufactures two types of bags styled
as ‘dolly Bag’ and ‘Jolly Bag’
You are supplied with the following data:
Direct Material consumed 2560000
Direct Wages 2400000
Production overheads 495000
The following is the additional information:
Direct materials per unit for type dolly was 160% of that of jolly
Each unit of dolly and jolly has to pass through 2 departments viz department X and Y for
completion. The time taken by each unit is as under:
Department X Department Y
Dolly 3 hours 2 hours
Jolly 2 hours 1 hour
The hourly rate of department X is double than that of department Y
Production overheads for Jolly was 60% of that of Dolly
Administrative overheads were Rs. 15 per unit of Dolly and Rs 9 per unit of Jolly
The total selling and distribution overheads amounted to Rs. 492500 to be allocated as
Dolly Rs. 364500 Jolly Rs. 128000
The production was as follows
Dolly 150000 units (9/10 sold) Jolly 80000 units (8/10 sold)
Selling prices per unit
Dolly Rs 55 Jolly Rs 35