This document discusses various techniques used for effective material control, including:
1) Setting reorder levels, minimum levels, and maximum levels to ensure adequate stock levels.
2) Determining economic order quantities to minimize ordering and carrying costs.
3) Just-in-time inventory systems which aim to deliver materials as needed to reduce stock levels.
4) ABC analysis which categorizes materials based on value to prioritize control of high-value items.
1. to understand the basic principles of Material Control
2. to study the procedures of Purchase, Storing and Issues
3. to acquaint with the latest techniques in inventory control
4. to understand the pricing of issues
This document discusses cost control and cost reduction. It defines cost control as comparing actual costs to budgets and standards to regulate costs, while cost reduction refers to permanently lowering production costs. The main areas of cost control are labor, materials, sales, and overhead. Advantages of cost control include improved profitability and competitiveness, while disadvantages include reduced flexibility. Advantages of cost reduction are increased profits and lower consumer prices, while quality may be sacrificed. Techniques for cost control include budgetary control and variance analysis, while techniques for cost reduction include work study, value analysis, and materials control.
This PPT contains the full detail of topic leverage in financial management
it covers following topics :-
Meaning of Leverage
Types of Leverage
Operating Leverage
Financial Leverage
Difference between Operating & Financial Leverage
Combined Leverage
Illustrations
Exercise
Here are the steps to solve this problem:
2. The activity rates are computed as:
Assembling units: AED. 280,000/1,000 units = AED. 280 per unit
Processing orders: AED. 310,000/250 orders = AED. 1,240 per order
Supporting customers: AED. 100,000/100 customers = AED. 1,000 per customer
Activity-Based Costing System 26
3. The table showing overhead costs for VB's 80 units and 4 orders is:
Description Amount (AED.)
Direct materials cost (80 units x AED. 180) 14,400
Direct labor cost
The document discusses the cost of capital, which is the rate of return a firm requires to increase its market value. It has three components: return at zero risk, business risk premium, and financial risk premium. Cost of capital is classified as historical vs future, specific vs composite, average vs marginal, and explicit vs implicit. Specific costs include cost of debt, preference shares, equity shares, and retained earnings. Composite cost is the weighted average cost of different sources. Cost of capital is computed using book value weights or market value weights to determine the weighted average cost of capital (WACC).
Watch out full video on youtube-
https://youtu.be/Suf9NAMW6Jg
Net Operating Income Approach
It proposes that -
Capital structure does not matter in determining the value of firm
It suggests that the value of firm remains same and is not affected by the change in debt composition of financing
Increase in debt composition results in increased risk perception by investors
Thus, firm appears to be more risky with more debt as capital which results in higher required rate of return by investors
The weighted average cost of capital and market value of firm remains same with increased cost of equity
Assumptions -
There are only two sources of financing – Debt & Equity
Value of equity is calculated by deducting the value of debt from total value of firm
Value of firm is EBIT / Overall cost of capital
WACC remains constant and with an increase in debt, the cost of equity increases
Dividend payout ratio is 1
No taxes & No retained earning
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Cost accounting is a formal system used to ascertain and control costs of products and services. The objectives of cost accounting include ascertaining costs, controlling costs, and guiding business policies. Cost accounting differs from financial accounting in its purpose, statutory requirements, cost analysis, periodicity of reporting, and control aspects. Cost centers, cost units, and methods of costing like job costing and process costing are used to allocate costs. Elements of cost include direct and indirect materials, direct and indirect labor, and expenses like production, administration, selling and distribution overheads. Total cost is made up of prime cost, works cost, cost of production and total cost or cost of sales.
This document discusses various techniques used for effective material control, including:
1) Setting reorder levels, minimum levels, and maximum levels to ensure adequate stock levels.
2) Determining economic order quantities to minimize ordering and carrying costs.
3) Just-in-time inventory systems which aim to deliver materials as needed to reduce stock levels.
4) ABC analysis which categorizes materials based on value to prioritize control of high-value items.
1. to understand the basic principles of Material Control
2. to study the procedures of Purchase, Storing and Issues
3. to acquaint with the latest techniques in inventory control
4. to understand the pricing of issues
This document discusses cost control and cost reduction. It defines cost control as comparing actual costs to budgets and standards to regulate costs, while cost reduction refers to permanently lowering production costs. The main areas of cost control are labor, materials, sales, and overhead. Advantages of cost control include improved profitability and competitiveness, while disadvantages include reduced flexibility. Advantages of cost reduction are increased profits and lower consumer prices, while quality may be sacrificed. Techniques for cost control include budgetary control and variance analysis, while techniques for cost reduction include work study, value analysis, and materials control.
This PPT contains the full detail of topic leverage in financial management
it covers following topics :-
Meaning of Leverage
Types of Leverage
Operating Leverage
Financial Leverage
Difference between Operating & Financial Leverage
Combined Leverage
Illustrations
Exercise
Here are the steps to solve this problem:
2. The activity rates are computed as:
Assembling units: AED. 280,000/1,000 units = AED. 280 per unit
Processing orders: AED. 310,000/250 orders = AED. 1,240 per order
Supporting customers: AED. 100,000/100 customers = AED. 1,000 per customer
Activity-Based Costing System 26
3. The table showing overhead costs for VB's 80 units and 4 orders is:
Description Amount (AED.)
Direct materials cost (80 units x AED. 180) 14,400
Direct labor cost
The document discusses the cost of capital, which is the rate of return a firm requires to increase its market value. It has three components: return at zero risk, business risk premium, and financial risk premium. Cost of capital is classified as historical vs future, specific vs composite, average vs marginal, and explicit vs implicit. Specific costs include cost of debt, preference shares, equity shares, and retained earnings. Composite cost is the weighted average cost of different sources. Cost of capital is computed using book value weights or market value weights to determine the weighted average cost of capital (WACC).
Watch out full video on youtube-
https://youtu.be/Suf9NAMW6Jg
Net Operating Income Approach
It proposes that -
Capital structure does not matter in determining the value of firm
It suggests that the value of firm remains same and is not affected by the change in debt composition of financing
Increase in debt composition results in increased risk perception by investors
Thus, firm appears to be more risky with more debt as capital which results in higher required rate of return by investors
The weighted average cost of capital and market value of firm remains same with increased cost of equity
Assumptions -
There are only two sources of financing – Debt & Equity
Value of equity is calculated by deducting the value of debt from total value of firm
Value of firm is EBIT / Overall cost of capital
WACC remains constant and with an increase in debt, the cost of equity increases
Dividend payout ratio is 1
No taxes & No retained earning
Thank you for Watching
Subscribe to DevTech Finance
Cost accounting is a formal system used to ascertain and control costs of products and services. The objectives of cost accounting include ascertaining costs, controlling costs, and guiding business policies. Cost accounting differs from financial accounting in its purpose, statutory requirements, cost analysis, periodicity of reporting, and control aspects. Cost centers, cost units, and methods of costing like job costing and process costing are used to allocate costs. Elements of cost include direct and indirect materials, direct and indirect labor, and expenses like production, administration, selling and distribution overheads. Total cost is made up of prime cost, works cost, cost of production and total cost or cost of sales.
The capital which is needed for the regular operation of business is called working capital. 1- for the purchase of raw materials
2- for the payment of wages
3- payment of rent and of other expenses
Working capital is kept in the form of cash, debtors, raw materials inventory, stock of finished goods, bills receivable etc.
Size Of Business
Nature Of Business
Storage Period
Credit Period
Seasonal Requirement
Potential Growth Or Expansion Of Business
Changes In Price Level
Dividend Policy
Working Capital Cycle
Operating Efficiency
Other Factors
Working capital requirement of a firm is directly influenced by the size of its business operation.
Big business organizations require more working capital than the small business organization.
Working capital requirement depends also upon the nature of business carried by the firm. Normally, manufacturing industries and trading organizations need more working capital than in the service business organizations.
A service sector does not require any amount of stock of goods. But in the manufacturing or trading firm, credit sales and advance related transactions are in large amount.
Time needed for keeping the stock in store is called storage period. The amount of working capital is influenced by the storage period. If storage period is high A firm should keep more quantity of goods in store and hence requires more working capital. if the storage Period is less , then more stock of goods must be held in store as work-in-progress.
This document provides information on single or output costing including its meaning, utility, costing procedure, elements of cost, components of total cost, cost sheet format and examples. Single or output costing is used when production is uniform, continuous and units produced are identical. It involves determining prime cost, factory cost, total cost and cost per unit. A cost sheet systematically presents various cost elements and is useful
The document provides information on fund flow statements, including their meaning, definition, purpose, and preparation. It defines a fund flow statement as a report on the movement of funds or working capital during an accounting period. It explains how working capital is raised and used. The summary then outlines some key points on the meaning of funds, items that constitute sources and uses of funds, and the objectives and limitations of fund flow statements.
The document discusses various methods and concepts in cost accounting, including:
1. Different types of costing methods like unit costing, job costing, contract costing, batch costing, operating costing, process costing, and multiple/uniform costing.
2. The need to reconcile cost and financial accounts when they are maintained separately, to check for differences in reported profit/loss.
3. Key aspects of cost sheets like classifying cost components, ascertaining product costs, fixing selling prices, and aiding cost control and management decisions.
The document discusses the format and items to be included in the balance sheet as per the revised Schedule III of the Companies Act 2013.
1) It outlines the key items to be presented under equity and liabilities such as share capital, reserves and surplus, long term borrowings, short term borrowings, trade payables etc.
2) It also describes the assets side covering non-current assets like fixed assets, investments, long term loans and advances. Current assets include inventories, trade receivables, cash, short term loans and advances.
3) Examples of balance sheet preparation from trial balance are given to illustrate the classification of items as per the schedule.
Activity based costing is considered to be useful only for Manufacturing Organizations whereas reality is that it is equally usefull to Service providers
This chapter discusses labor costs, including distinguishing between direct and indirect labor costs. It covers labor cost control methods like timekeeping and time booking. Different wage payment systems like time rates, piece rates, and bonus systems are explained. Key aspects of labor costs include labor turnover calculation methods, maintaining payroll records, and generating pay slips that include salary deductions. Departments involved in labor cost control are also listed.
The document discusses inventory management at Apex Auto Ltd. It describes the company's objectives to study inventory management techniques and their impact on working capital. The document outlines the methodology used, including analyzing ratios and inventory statements. It also provides an overview of the metal fabrication industry and Apex Auto Ltd's profile.
The document defines various types of variances that can occur in cost accounting, including material, labor, and overhead variances. It provides formulas to calculate variance amounts and examples showing how to compute variances based on standard and actual costs. Variances are classified into price, usage/efficiency, and mix categories and can be favorable or unfavorable depending on whether actual costs are lower or higher than standards.
A power point presentation describing some basic definitions, father of cost accounting, Indian aspect of cost accounting and Various Methods and Techniques of costing.
Presented by: Aquib Ali, Ajay Gupta and Ashwin Showi. (M.Com students)
at the Bhopal School of Social Sciences(BSSS) on 6 September, 2017
Bangalore University - M.Com III semester : Accounting & Taxation specialization : Subject : Accounting For Managerial Decisions - Performance Measurement System - Theory with Examples.
The document provides information on cost sheets, including their purpose and key components. A cost sheet shows the costs of production for an accounting period and breaks down total costs. It includes prime costs like direct materials, labor, and expenses. Factory costs incorporate prime costs and factory overheads. Administration costs add office overheads to factory costs. Selling and distribution costs include advertising, sales salaries, and transport costs. An example cost sheet is provided with sales, inventory, production, overhead, and expense figures.
The document discusses capital structure and provides examples of capital structure problems. It defines capital structure as the combination of equity and debt used to finance a company's operations. An optimal capital structure minimizes a firm's cost of capital while maximizing its value. There are four basic patterns of capital structure including only equity shares, equity and preference shares, equity and long-term debt, and a combination of all three. Several problems are presented showing calculations to determine earnings per share under different financing plans, with the goal of maximizing EPS.
Britannia Industries is one of India's largest food companies known for biscuits like Tiger and Marie Gold. The document analyzes the marginal costs of Britannia through a cost sheet showing materials, labor, overhead costs and profit/loss. It then performs a cost-volume-profit analysis, calculating the break-even point, profit-volume ratio, and margin of safety. Comparing 2011-2012, sales increased while expenses remained stable, improving the profit-volume ratio and increasing the margin of safety, lowering the company's risk level.
The document discusses cost drivers and cost behavior. It defines cost drivers as activities or factors that generate costs and have a cause-and-effect relationship with total costs. Direct costs are themselves cost drivers, while other factory costs need identified cost drivers to trace overhead to products. Costs are classified by their behavior as fixed, variable, or semi-variable depending on how they change with activity level. Fixed costs remain the same despite output fluctuations but can change between time periods if the activity level changes significantly.
The document analyzes the cost sheet of Dabur India Limited for the year 2010-2011. It prepares the cost sheet, analyzes various cost elements, and applies concepts of marginal costing. Key findings include direct materials constituting 5.91% of prime cost, advertising expenses accounting for 74.59% of selling and distribution overhead, and fixed costs representing 27.42% of total costs. Marginal costing tools like contribution, P/V ratio, break-even point, and margin of safety are also calculated.
This document discusses different types of costing methods used in manufacturing including job costing, batch costing, contract costing, and process costing. Job costing is used to determine the costs of specific jobs or orders. Batch costing is a variant of job costing where similar products are manufactured in batches. Contract costing is a variant of job costing applied to construction projects. Process costing is used for mass production of standardized goods and tracks costs at each stage of production. The document outlines key features, advantages, and disadvantages of each costing method.
The document is a multi-page exam problem for a cost accounting course. It provides extensive information on the transactions and inventory of Cedarwood Inc., a furniture manufacturer, during November 2011. Students are asked to prepare journal entries, calculate ending inventory amounts, and prepare an income statement based on the information provided. The problem also includes additional questions on overhead allocation and standard costing for other sample companies.
The document provides information about a cost accounting exam for a furniture company named Cedarwood Inc. It includes multiple problems with various accounting transactions during the month of November. The summary is:
1. Cedarwood Inc uses a job order costing system and is provided work in process and finished goods inventory amounts at the start of November.
2. The company had various transactions during November including purchasing raw materials, issuing materials to jobs, paying salaries, and selling finished jobs.
3. The problems require preparing journals, calculating inventory amounts, income statement, and analyzing overhead allocation methods.
The capital which is needed for the regular operation of business is called working capital. 1- for the purchase of raw materials
2- for the payment of wages
3- payment of rent and of other expenses
Working capital is kept in the form of cash, debtors, raw materials inventory, stock of finished goods, bills receivable etc.
Size Of Business
Nature Of Business
Storage Period
Credit Period
Seasonal Requirement
Potential Growth Or Expansion Of Business
Changes In Price Level
Dividend Policy
Working Capital Cycle
Operating Efficiency
Other Factors
Working capital requirement of a firm is directly influenced by the size of its business operation.
Big business organizations require more working capital than the small business organization.
Working capital requirement depends also upon the nature of business carried by the firm. Normally, manufacturing industries and trading organizations need more working capital than in the service business organizations.
A service sector does not require any amount of stock of goods. But in the manufacturing or trading firm, credit sales and advance related transactions are in large amount.
Time needed for keeping the stock in store is called storage period. The amount of working capital is influenced by the storage period. If storage period is high A firm should keep more quantity of goods in store and hence requires more working capital. if the storage Period is less , then more stock of goods must be held in store as work-in-progress.
This document provides information on single or output costing including its meaning, utility, costing procedure, elements of cost, components of total cost, cost sheet format and examples. Single or output costing is used when production is uniform, continuous and units produced are identical. It involves determining prime cost, factory cost, total cost and cost per unit. A cost sheet systematically presents various cost elements and is useful
The document provides information on fund flow statements, including their meaning, definition, purpose, and preparation. It defines a fund flow statement as a report on the movement of funds or working capital during an accounting period. It explains how working capital is raised and used. The summary then outlines some key points on the meaning of funds, items that constitute sources and uses of funds, and the objectives and limitations of fund flow statements.
The document discusses various methods and concepts in cost accounting, including:
1. Different types of costing methods like unit costing, job costing, contract costing, batch costing, operating costing, process costing, and multiple/uniform costing.
2. The need to reconcile cost and financial accounts when they are maintained separately, to check for differences in reported profit/loss.
3. Key aspects of cost sheets like classifying cost components, ascertaining product costs, fixing selling prices, and aiding cost control and management decisions.
The document discusses the format and items to be included in the balance sheet as per the revised Schedule III of the Companies Act 2013.
1) It outlines the key items to be presented under equity and liabilities such as share capital, reserves and surplus, long term borrowings, short term borrowings, trade payables etc.
2) It also describes the assets side covering non-current assets like fixed assets, investments, long term loans and advances. Current assets include inventories, trade receivables, cash, short term loans and advances.
3) Examples of balance sheet preparation from trial balance are given to illustrate the classification of items as per the schedule.
Activity based costing is considered to be useful only for Manufacturing Organizations whereas reality is that it is equally usefull to Service providers
This chapter discusses labor costs, including distinguishing between direct and indirect labor costs. It covers labor cost control methods like timekeeping and time booking. Different wage payment systems like time rates, piece rates, and bonus systems are explained. Key aspects of labor costs include labor turnover calculation methods, maintaining payroll records, and generating pay slips that include salary deductions. Departments involved in labor cost control are also listed.
The document discusses inventory management at Apex Auto Ltd. It describes the company's objectives to study inventory management techniques and their impact on working capital. The document outlines the methodology used, including analyzing ratios and inventory statements. It also provides an overview of the metal fabrication industry and Apex Auto Ltd's profile.
The document defines various types of variances that can occur in cost accounting, including material, labor, and overhead variances. It provides formulas to calculate variance amounts and examples showing how to compute variances based on standard and actual costs. Variances are classified into price, usage/efficiency, and mix categories and can be favorable or unfavorable depending on whether actual costs are lower or higher than standards.
A power point presentation describing some basic definitions, father of cost accounting, Indian aspect of cost accounting and Various Methods and Techniques of costing.
Presented by: Aquib Ali, Ajay Gupta and Ashwin Showi. (M.Com students)
at the Bhopal School of Social Sciences(BSSS) on 6 September, 2017
Bangalore University - M.Com III semester : Accounting & Taxation specialization : Subject : Accounting For Managerial Decisions - Performance Measurement System - Theory with Examples.
The document provides information on cost sheets, including their purpose and key components. A cost sheet shows the costs of production for an accounting period and breaks down total costs. It includes prime costs like direct materials, labor, and expenses. Factory costs incorporate prime costs and factory overheads. Administration costs add office overheads to factory costs. Selling and distribution costs include advertising, sales salaries, and transport costs. An example cost sheet is provided with sales, inventory, production, overhead, and expense figures.
The document discusses capital structure and provides examples of capital structure problems. It defines capital structure as the combination of equity and debt used to finance a company's operations. An optimal capital structure minimizes a firm's cost of capital while maximizing its value. There are four basic patterns of capital structure including only equity shares, equity and preference shares, equity and long-term debt, and a combination of all three. Several problems are presented showing calculations to determine earnings per share under different financing plans, with the goal of maximizing EPS.
Britannia Industries is one of India's largest food companies known for biscuits like Tiger and Marie Gold. The document analyzes the marginal costs of Britannia through a cost sheet showing materials, labor, overhead costs and profit/loss. It then performs a cost-volume-profit analysis, calculating the break-even point, profit-volume ratio, and margin of safety. Comparing 2011-2012, sales increased while expenses remained stable, improving the profit-volume ratio and increasing the margin of safety, lowering the company's risk level.
The document discusses cost drivers and cost behavior. It defines cost drivers as activities or factors that generate costs and have a cause-and-effect relationship with total costs. Direct costs are themselves cost drivers, while other factory costs need identified cost drivers to trace overhead to products. Costs are classified by their behavior as fixed, variable, or semi-variable depending on how they change with activity level. Fixed costs remain the same despite output fluctuations but can change between time periods if the activity level changes significantly.
The document analyzes the cost sheet of Dabur India Limited for the year 2010-2011. It prepares the cost sheet, analyzes various cost elements, and applies concepts of marginal costing. Key findings include direct materials constituting 5.91% of prime cost, advertising expenses accounting for 74.59% of selling and distribution overhead, and fixed costs representing 27.42% of total costs. Marginal costing tools like contribution, P/V ratio, break-even point, and margin of safety are also calculated.
This document discusses different types of costing methods used in manufacturing including job costing, batch costing, contract costing, and process costing. Job costing is used to determine the costs of specific jobs or orders. Batch costing is a variant of job costing where similar products are manufactured in batches. Contract costing is a variant of job costing applied to construction projects. Process costing is used for mass production of standardized goods and tracks costs at each stage of production. The document outlines key features, advantages, and disadvantages of each costing method.
The document is a multi-page exam problem for a cost accounting course. It provides extensive information on the transactions and inventory of Cedarwood Inc., a furniture manufacturer, during November 2011. Students are asked to prepare journal entries, calculate ending inventory amounts, and prepare an income statement based on the information provided. The problem also includes additional questions on overhead allocation and standard costing for other sample companies.
The document provides information about a cost accounting exam for a furniture company named Cedarwood Inc. It includes multiple problems with various accounting transactions during the month of November. The summary is:
1. Cedarwood Inc uses a job order costing system and is provided work in process and finished goods inventory amounts at the start of November.
2. The company had various transactions during November including purchasing raw materials, issuing materials to jobs, paying salaries, and selling finished jobs.
3. The problems require preparing journals, calculating inventory amounts, income statement, and analyzing overhead allocation methods.
The document discusses job costing, which is a product costing method used for unique products made to customer specifications. It describes job costing systems, different costing methods (actual, normal, standard), and reasons why normal and standard costing are preferable to actual costing. The document also provides examples of job costing sheets and case studies calculating costs for different job orders.
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.
unit-2 financial statement of sole propritors.pdfLAKSHMI V
Financial statements of
Manufacturing Concerns -Statement of Manufacture, Statement of Trading and
Profit & Loss -Balance Sheet. Financial statement of Non-manufacturing
Concerns, Statement of Profit and Loss and Balance sheet.
ACCT 505 Week 1-7 All Discussion Questions
ACCT 505 Week 1 Case Study
ACCT 505 Week 2 Quiz Job Order and Process Costing Systems
ACCT 505 Week 2 Quiz Set 2
1. The company uses a job-order costing system. I would recommend assigning manufacturing overhead to production using a predetermined overhead rate based on normal capacity.
2. I have recomputed the unit costs using a single predetermined overhead rate, which results in more consistent unit costs across quarters.
3. In an activity-based costing system, overhead costs are assigned to products based on their consumption of activities and cost pools. I have computed the overhead cost applied to each product for Sultan Company by distributing the activity costs to products based on their activity usage.
This document contains information on the assets, liabilities, equity, and transactions of Sea Isle company for the year ending December 31, 2009. It provides details on the company's balance sheet accounts, changes to inventory balances, sales and cost of goods sold transactions, expenses, and required financial statements. It also includes several word problems involving cost accounting concepts like absorption and marginal costing, break-even analysis, inventory valuation, and overhead application.
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ACCT 505 Week 1-7 All Discussion Questions
ACCT 505 Week 1 Case Study
ACCT 505 Week 2 Quiz Job Order and Process Costing Systems
For more course tutorials visit
www.acct505.com
ACCT 505 Week 1-7 All Discussion Questions
ACCT 505 Week 1 Case Study
ACCT 505 Week 2 Quiz Job Order and Process Costing Systems
ACCT 505 Week 2 Quiz Set 2
This document provides information and questions for the ACCT 505 Entire Course. It includes tutorials, discussion questions, exams, quizzes, case studies and course projects covering topics like job order and process costing systems, measuring performance, segment reporting, relevant costs, capital budgeting, and absorption costing. The document also provides 3 sets of final exam questions testing understanding of topics like cost of goods manufactured, break-even analysis, flexible budgeting, and make-or-buy analysis.
This document contains information and questions for the ACCT 505 Entire Course. It includes discussion questions, exams, quizzes, case studies and course projects for each week of the course. It also provides 3 sets of final exam questions, sample exams, and tutorials for external review.
For more classes visit
www.snaptutorial.com
ACCT 505 Week 1-7 All Discussion Questions
ACCT 505 Week 1 Case Study
ACCT 505 Week 2 Quiz Job Order and Process Costing Systems
ACCT 505 Week 2 Quiz Set 2
ACCT 505 Week 3 Case Study II
ACCT 505 Week 4 Midterm Exam
For more course tutorials visit
www.acct505.com
ACCT 505 Week 1-7 All Discussion Questions
ACCT 505 Week 1 Case Study
ACCT 505 Week 2 Quiz Job Order and Process Costing Systems
ACCT 505 Week 2 Quiz Set 2
For more course tutorials visit
www.acct505.com
ACCT 505 Week 1-7 All Discussion Questions
ACCT 505 Week 1 Case Study
ACCT 505 Week 2 Quiz Job Order and Process Costing Systems
ACCT 505 Week 2 Quiz Set 2
The document provides information about standard and actual production costs for two companies, Valley Corporation and a furniture company that produces chairs. It also provides information about a third company, Cedarwood Inc., that uses job order costing and has various production and overhead cost transactions throughout the month of November. Students are asked to prepare various journal entries and calculations for standard costing, overhead allocation, and job order costing for the three companies based on the information provided.
ACCT 505 OUTLET Education for Service--acct505outlet.comkopiko58
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ACCT 505 Week 1-7 All Discussion Questions
ACCT 505 Week 1 Case Study
ACCT 505 Week 2 Quiz Job Order and Process Costing Systems
ACCT 505 Week 2 Quiz Set 2
A demat account allows investors to hold securities digitally and trade shares online. However, demat accounts also have some shortcomings. Demat accounts require yearly fees to cover maintenance costs and force investors to trade frequently online. This level of technology literacy and high trading frequency can prevent long-term investing and result in losses. Demat account holders must also monitor stockbroker activities and may need to agree to additional contracts.
A demat account allows investors to hold shares and securities in electronic format rather than physical certificates. It provides benefits like seamless and fast transfer of shares, facilitates digitally secured storage of investments, and easy tracking of trading activities. A demat account provides a convenient way to hold shares and securities by eliminating risks of theft, forgery or damage of physical certificates. It allows for immediate digital transfer of securities once a trade is approved. Demat accounts do not require a minimum balance of shares and one can hold multiple demat accounts linked to a single PAN number.
Mobile banking allows users to conduct financial transactions using a mobile device and provides services such as accessing account statements, monitoring term deposits, receiving account alerts, managing mutual funds and insurance policies, and accessing loan and card statements. It is a branch of e-commerce that uses information and communication technology for business and financial management, with mobile commerce classified into obtaining information, conducting transactions, and providing services related to a product or service.
The Ombudsman scheme provides independent dispute resolution between organizations and their customers. It was first established in Sweden in 1915 and has since been adopted by many governments and private entities. The SEBI Ombudsman Regulations established the Ombudsman scheme in India in 2003 to handle investor complaints against listed companies and intermediaries. The Ombudsman investigates complaints, makes recommendations, provides guidance, monitors practices, and reports on complaints regarding issues like non-receipt of shares or funds. Complaints not resolved within one month can be referred to the Ombudsman.
The document discusses factors that affect share prices, including supply and demand, interest rates, current events, and exchange rates. Supply and demand directly impact share prices, with prices rising when demand exceeds supply and falling when supply outweighs demand. Interest rates and monetary policy decisions also influence prices, with higher rates typically lowering prices. Current domestic and global events can positively or negatively impact investor sentiment and market prices. Exchange rates also play a role, as a stronger rupee against the dollar is often correlated with economic growth and higher stock values.
This document outlines the rights of investors as shareholders, debenture holders, and security holders. As a shareholder, investors have rights to receive dividends and inspect company records. They can also apply to have meetings called or the company wound up. As a group, shareholders can call extraordinary meetings and demand polls. As debenture holders, investors are entitled to interest payments and can take action if debentures are in default. The document stresses that investors have responsibilities to be informed, vigilant, and participate in company meetings by exercising their rights individually or as a group.
Small investor confidence can affect stock prices, with rising confidence leading to bull markets and falling confidence resulting in bear markets. Factors like company news, economic conditions, and regulatory actions influence investor confidence. The Securities and Exchange Board of India (SEBI) regulates India's securities market, but small investors may lose confidence in SEBI due to regulatory failures, lack of awareness about SEBI's role, perceived inefficiencies, or rampant insider trading. This could have negative effects like reduced market participation and investment from small investors. To regain confidence, SEBI must address transparency, communication, and strict enforcement against fraud and insider trading.
The Bombay Stock Exchange (BSE) is the oldest stock exchange in Asia and provides various facilities to members and investors including trading, clearing and settlement, listing, market data, investor services, and international services. BSE offers a platform for trading various financial instruments, a comprehensive clearing and settlement system, listing services for companies, real-time market data and statistics, online trading and education for investors, and access to global markets through international partnerships.
This document discusses key trends driving e-commerce growth including omnichannel presence, extensive personalization, shift to mobile, conversational marketing, AI/chatbots, image search, and efficient checkout processes. It explains how technologies like video chat, co-browsing, and e-signatures allow for interconnected customer experiences across channels. Personalization is highlighted as important for understanding customer preferences and behavior. Mobile platforms and apps, location-based marketing, and augmented reality are increasing in importance.
Encryption is the process of converting a readable plaintext message into an unreadable cipher text message. Decryption is the reverse process of converting cipher text back into a readable plaintext format. The encryption process uses a public key at the sender's end to encrypt the message into unreadable cipher text. Decryption uses a private key at the receiver's end to decode the cipher text back into the original readable plaintext message. Encryption and decryption ensure secure transmission and storage of sensitive data that can only be accessed by authorized parties with the proper keys.
Meaning, Anatomy and Forces Fueling e-commerceRajaKrishnan M
E-commerce involves the buying and selling of goods and services over the Internet. It can occur between businesses, businesses and consumers, consumers and businesses, and consumers directly. E-commerce uses electronic means like websites to facilitate commercial transactions. It requires large multimedia storage servers to hold content like audio, video, images and text. Information is delivered to consumer access devices through telecom, cable, computer or wireless networks. Three key forces fueling the growth of e-commerce are economic factors like lower costs, marketing advantages of new channels and personalized service, and advancing digital technologies.
E-commerce is the process of buying, selling, or exchanging products, services, and information via electronic networks and computers. It allows consumers to exchange goods and services without barriers of time or distance. Key drivers of e-commerce growth include economic, technological, market, and social factors. Economically, e-commerce enables lower-cost interactions between businesses and partners, cheaper advertising and customer service, and higher profits through reduced overhead.
This document discusses interorganizational systems (IOS) and e-commerce. It defines IOS as occurring between two or more organizations collaborating and sharing information. It describes different levels of IOS including individual organizations, networks themselves, and wider communities. It also outlines types of IOS at different technological stages from pre-internet to modern web 2.0 systems. Key benefits of IOS include enabling efficient supply chain management, facilitating technology exchange, allowing for global communication, and reducing business risks.
This document discusses five factors that influence the adoption of mobile commerce (m-commerce): perceived usefulness, perceived ease of use, perceived trust, perceived cost, and perceived privacy. It provides definitions and explanations of each factor, describing how researchers have proposed that higher perceptions of usefulness, ease of use, trust, and privacy as well as lower perceptions of cost would positively influence consumers' adoption of m-commerce.
This document discusses the advantages and disadvantages of e-commerce. Some key advantages include low financial costs to start an e-business, the ability to operate 24/7 globally, and easily gaining customer data. However, disadvantages include sites crashing and customers being unable to try products before buying. Additionally, e-commerce faces high competition, potential quality issues, and security/technical challenges from poor implementation or evolving standards.
This document outlines 7 types of e-commerce business models:
1) Business-to-Business (B2B) where businesses sell products to other businesses for resale.
2) Business-to-Consumer (B2C) where businesses sell directly to consumers through websites like Amazon and Flipkart.
3) Consumer-to-Consumer (C2C) where individuals sell used goods to other consumers through sites like OLX and Quickr.
E-commerce refers to the buying and selling of goods and services, and the transfer of funds and data, over the internet. It allows for commercial transactions between businesses and consumers with no barriers of time or distance. While e-commerce involves commercial transactions via the internet, e-business relies entirely on the internet for all company activities from procurement to marketing to sales. E-commerce has grown exponentially in recent decades, emerging in the 1970s on private networks and accelerating with the creation of the world wide web and first online stores in the early 1990s.
This document discusses several topics related to mobile computing and m-commerce. It begins with an overview of RFID technology, including the basic components and types of RFID tags. It then covers WiMAX and how it provides wireless broadband connectivity over large areas. Finally, it discusses SMS and its use for short text messages. The document also outlines some security issues and safety measures for mobile computing.
The document discusses electronic data interchange (EDI) and the internet. It defines EDI as the electronic exchange of business documents between organizations in a standardized format. Common documents exchanged via EDI include invoices, purchase orders, and shipping notices. The document also outlines several benefits of EDI for industries like retail, manufacturing, and automobiles. It provides a brief history of the internet and defines key terms like protocols and the world wide web. EDI is useful for regular exchanges between business partners in industries like supply chain management.
Beyond Degrees - Empowering the Workforce in the Context of Skills-First.pptxEduSkills OECD
Iván Bornacelly, Policy Analyst at the OECD Centre for Skills, OECD, presents at the webinar 'Tackling job market gaps with a skills-first approach' on 12 June 2024
Temple of Asclepius in Thrace. Excavation resultsKrassimira Luka
The temple and the sanctuary around were dedicated to Asklepios Zmidrenus. This name has been known since 1875 when an inscription dedicated to him was discovered in Rome. The inscription is dated in 227 AD and was left by soldiers originating from the city of Philippopolis (modern Plovdiv).
Walmart Business+ and Spark Good for Nonprofits.pdfTechSoup
"Learn about all the ways Walmart supports nonprofit organizations.
You will hear from Liz Willett, the Head of Nonprofits, and hear about what Walmart is doing to help nonprofits, including Walmart Business and Spark Good. Walmart Business+ is a new offer for nonprofits that offers discounts and also streamlines nonprofits order and expense tracking, saving time and money.
The webinar may also give some examples on how nonprofits can best leverage Walmart Business+.
The event will cover the following::
Walmart Business + (https://business.walmart.com/plus) is a new shopping experience for nonprofits, schools, and local business customers that connects an exclusive online shopping experience to stores. Benefits include free delivery and shipping, a 'Spend Analytics” feature, special discounts, deals and tax-exempt shopping.
Special TechSoup offer for a free 180 days membership, and up to $150 in discounts on eligible orders.
Spark Good (walmart.com/sparkgood) is a charitable platform that enables nonprofits to receive donations directly from customers and associates.
Answers about how you can do more with Walmart!"
Leveraging Generative AI to Drive Nonprofit InnovationTechSoup
In this webinar, participants learned how to utilize Generative AI to streamline operations and elevate member engagement. Amazon Web Service experts provided a customer specific use cases and dived into low/no-code tools that are quick and easy to deploy through Amazon Web Service (AWS.)
BÀI TẬP DẠY THÊM TIẾNG ANH LỚP 7 CẢ NĂM FRIENDS PLUS SÁCH CHÂN TRỜI SÁNG TẠO ...
Cost Sheet , Tender and quotation
1. 1
COST ACCOUTING
PROBLEMS
UNIT I COST SHEET
1. You are required to compile a statement showing cost and profit from the information given, showing
clearly: a) Material consumed b) Prime cost c) Works cost d) Cost of production e) Cost of sales f) Profit
and g) Sales
Materials purchased
Wages
Direct expenses
Rs 2,00,000
Rs 1,00,000
Rs 20,000
Opening stock of materials
Closing stock of materials
Rs 40,000
Rs 60,000
Factory overhead is absorbed at 20% on wages. Administration overhead is 255 on the works cost. Selling
and distribution overheads are 20% on the cost of production. Profit is 20% on sales.
2. Calculate prime cost, factory cost, cost of production, cost of sales and profit from the following
particulars:
Rs Rs
Direct materials
Direct wages
Wages of foreman
Electric power
Lighting :
Factory
Office
Storekeepers wages
Oil and water
Rent:
Factory
Office
Repairs and renewals:
Factory plant
Office premises
Transfer to reserve
Discount on shares written off
Dividend
1,00,000
30,000
2,500
500
1,500
500
1,000
500
5,000
2,500
3,500
500
1,000
500
2,000
Depreciation:
Factory plant
Office premises
Consumable stores
Managers salary
Directors fees
Office stationery
Telephone charges
Postage and telegrams
Salesmen’s salaries
Travelling expenses
Advertising
Warehouse charges
Sales
Carriage outward
Income tax
500
1,250
2,500
5,000
1,250
500
125
250
1,250
500
1,250
500
1,89,500
375
10,000
3. During the year 2008, X ltd, produced 50,000 units of a product. The following were the expenses:
Stock of raw materials on 1.1.2008
Stock of raw materials on 31.12.2008
Purchases
Direct Wages
Rs 10,000
Rs 20,000
Rs 1,60,000
Rs 75,000
Direct expenses
Factory expenses
Office expenses
Selling expenses
Rs 25,000
Rs 37,500
Rs 62,500
Rs 25,000
You are required to prepare a cost sheet showing cost per unit and total cost at each stage.
4. A factory produces 100 units of a commodity. The cost of production is:
Materials – Rs.10,000; Wages – Rs. 5,000; Direct expenses – Rs,1,000;
Factory overheads are 125% on wages; office overheads are 20% on works cost. Expected profit is 25%
on sales.
Calculate the price to be fixed per unit.
5. The following details have been obtained from the cost records of Raja Sekar Ltd.
Stock of raw materials on 1.12.2010
Stock of raw materials on 31.12.2010
Direct Wages
Indirect wages
Sales
Work-in-progress 1.12.2010
Work-in-progress 31.12.2010
Purchases of raw materials
Factory rent, rates and power
Rs 75,000
Rs 91,500
Rs 52,500
Rs 2,750
Rs 2,11,000
Rs 28,000
Rs 35,000
Rs 66,000
Rs 15,000
Depreciation of plant and machinery
Expenses on purchases
Carriage outwards
Advertising
Office rent and taxes
Travellers wages and commission
Stock of finished goods (1.12.2010)
Stock of finished goods (31.12.2010)
Rs 3,500
Rs 1,500
Rs 2,500
Rs 3,500
Rs 2,500
Rs 6,500
Rs 54,000
Rs 31,000
Prepare a cost sheet giving the maximum possible break up of costs and profit.
2. 2
6. M/s Indus Industries Ltd. Are the manufacturers of moonlight torches. The following data relate to
manufacture of torches during the month of March 2009.
Raw materials consumed
Direct Wages
Machine hours worked
Machine hour rate
Rs 20,000
Rs 12,000
9500 hours
Rs 2
Office overheads
Selling overheads
Units produced
Units sold
20% of works cost
50 paise per unit
20,000 units
18,000 @Rs. 5 per unit
Prepare cost sheet showing the cost and the profit per unit and the total profit earned.
7. Following extract of costing information relates to a commodity for the year ended 31-12-2010.
Stock on 1.4.2009:
Raw materials
Finished goods(1,000 tons)
Stock on 1.3.2010:
Raw materials
Finished goods(2,000 tons)
Raw materials purchased
Direct wages
Rs 5,000
Rs 4,000
Rs 5,560
Rs 8,000
Rs 30,000
Rs 25,000
Rent, rates and taxes of works
Carriage inwards
Work-in-progress on 1.4.2009
Work-in-progress on 31.3.2010
Sales of finished goods
Cost of factory supervision
Rs 10,000
Rs 360
Rs 1,200
Rs 4,000
Rs 75,000
Rs 2,000
Advertisement and selling expenses amount to Re. 0.25 per ton sold. 16,000 tonnes were produced during
the year.
Prepare statement showing a) the value of raw materials used; b) the cost of the output for the year; c) the
cost of the turnover for the year; d) the net profit for the year and e) the net profit per ton of the
commodity.
8. Prepare a cost sheet showing cost of production and profit from the following data.
Opening Closing
Stock of raw materials
Work-in-progress
Stock of finished goods
75,000
24,600
52,080
78,750
27,300
47,250
Purchases for the year
Sales
Direct wages
Works expenses
Rs 65,700
Rs 2,16,930
Rs 51,450
Rs 25,020
Selling & distribution expenses
Scrap sold
Office expenses
Rs 12,630
Rs 990
Rs 20,610
9. The following data are available from the books of a factory:
Opening Stock:
Raw materials
Work-in-progress
Closing stock:
Raw materials
Work-in-progress
16,000
6,000
8,000
10,000
Purchases of raw materials
Direct wages
Factory overheads
40,000
32,000
10,000
The following additional information is given to you:
Composition of opening work-in-progress:
Raw materials – 3,200
Direct wages – 2,000
Factory overheads – 800
Total – 6,000
Composition of closing work-in-progress:
Raw materials – 4,000
Direct wages – 5,400
Factory overheads – 600
Total – 10,000
You are required to ascertain factory cost.
10. In a factory two types of ceiling fans viz., Usha and Crompton are produced. Ascertain the cost and
profit per unit sold from the particulars given below.
Usha Crompton
Materials
Wages
16,400
8,900
18,900
9,800
Works overhead are 60% of wages and office overheads are 20% on works cost. The selling expenses per
fan sold is Rs. 2. The selling expenses of Usha and Crompton are Rs. 550 and Rs. 800 respectively. 80 fans
of Usha and 100 fans of Crompton are sold. There is no opening or closing stock.
3. 3
11. From the following details extracted from the trial balance of new era ltd. For the financial year
ending 31.3.2010, you are require to prepare:
a) A statement of cost showing various elements of cost in detail
b) A separate statement of profit
Credit Balances Rs Debit Balances Rs
Sales
Returns of materials
Sale of scrap of raw
material
8,00,000
10,000
8,000
Opening stock:
Raw material
WIP
Finished goods
Plant & Machinery
Buildings
Returns inwards
Raw material purchased
Carriage on material
Direct Wages
Indirect wages
Factory expenses
Sundry office expenses
Power
Indirect materials infactory
Sundry factory expenses
Selling expenses
Distribution expenses
Interest on bank loan
Additional Information
a) Closing stock
Raw material
WIP
Finished goods
b) Depreciation on plant &
Machinery at 10% P.A
Depreciation on buildings (50%
factory and 50% office) at 5% P.A
30,000
40,000
60,000
1,00,000
8,00,000
20,000
2,00,000
10,000
1,20,000
40,000
30,000
83,000
50,000
10,000
20,000
60,000
20,000
10,000
40,000
25,000
50,000
12. The following information has been obtained from the records of Left Center Corporation for the
period from January 1 to June 30, 2010.
On January 1, 2010 On June 30, 2010
Cost of raw materials
Cost of work-in-progress
Cost of stock of finished goods
Transactions during six months are:
Purchases of raw materials
Wages paid
Factory overheads
Administration overheads
Selling and distribution overheads
Sales
30,000
12,000
60,000
4,50,000
2,30,000
92,000
30,000
20,000
9,00,000
25,000
15,000
55,000
Prepare i) Cost sheet showing a) Materials consumed b) Prime cost c) Factory cost incurred and factory
cost; and
ii) Income statement in Tradional form for the six months showing gross profit and net profit.
4. 4
TENDER AND QUOTATIONS
13. The following figures relate to the costing of a Tarpaulin manufactured in respect of a certain type of
a sheet for a period of three months:
Stock of materials (1-1-2001)
Stock of materials (31-3-2001)
Productive wages
Materials purchased
11,000
7,000
1,66,000
1,23,000
Sales
Indirect expenses
Completed stock (1-1-2001)
Completed stock (31-3-2001)
2,87,100
26,000
NIL
58,000
The number of sheets manufactured during three months was 4,400 and the price is to be quoted for 1,296
sheets in order to realise the same percentage of profits as for the period under review, assuming no
alteration in rates of wages and cost of materials.
Prepare a statement of cost for the manufacture of 4,400 sheets and quotation for 1,296 sheets.
14. The particulars of a factory for the year 2006 are given below:
Raw materials
Direct wages
Works overhead
Office overhead
3,00,000
1,68,000
1,50,000
1,68,000
Selling overhead
Distribution overhead
Net profit
1,12,000
70,000
1,10,000
In 2007, the expenses incurred on the execution of a work order:
Raw materials - 12,000; wages – 7,000; Assuming that in 2007 works overhead went up 20% distribution
overhead went down by 10% and selling and office overheads went up by 12 1/2 %, at what rate of price
should the product be quoted so as to earn the rate of profit on the selling price same as in 2006?
15. On August 15, 1991 a manufacture Soman desired to quote for a contract for the supply of 500 radio
sets. From the following details prepare a statement showing the price to be quoted to give the same
percentage of net profit on turnover as was realised during 6 months ending on 30th
June 1991:
Stock of materials as on 1st
Jan 1991
Stock of materials as on 30th
June 1991
Purchase of materials during 6 months
Factory wages during 6 months
20,000
25,000
1,50,000
1,20,000
Indirect charges during 6 months
Opening stock of completed sets
Closing stock of completed sets
Sales during 6 months
25,000
NIL
100
3,24,000
The number of radio sets manufactured during these six months was 1,450 sets including those sold and
those stocked at the end of the period. The radios to be quoted are of uniform quality and size as were
manufactured during the six months to 30th
June, 1991. As from August 1, the cost of factory labour has
gone up by 10%.
16. Cooling Ltd. Manufactured and sold 1,000 refrigerators in the year ending 31-12-1997. The
summarised trading and profit & loss account is as follows:
Rs Rs
To cost of materials
To direct wages
To other manufacturing costs
To gross profit c/d
80,000
1,20,000
50,000
1,50,000
By sales 4,00,000
4,00,000 4,00,000
To management salaries
To rent, rates
To selling expenses
To general expenses
To net profit
60,000
10,000
30,000
20,000
30,000
By gross profit B/d
1,50,000 1,50,000
For the year ending 31-12-98, it is estimated that:
a) Output and sales will be 1,200 refrigerators.
b) Price of materials will go up by 20% on the level of the previous year.
c) Wages will increase by 5%.
d) Manufacturing cost will rise in proportion to the combined cost of materials and wages.
e) Selling costs per unit remain unchanged.
f) Other expenses will also remain constant.
5. 5
You are required to submit a statement to the board of directors showing the price at which the
refrigerators should be sold so as to show a profit of 10% on selling price.
17. The accounts of Pleasant company Ltd., shows the following details for the year 1990:
Materials – 3,50,000; Labour – 2,70,000; Factory Overhead – 81,000; Administration overheads –
56,080;
It is estimated that Rs. 1,000 for materials and Rs. 700 for labour will be required for one unit of the
finished product for quotation purpose.
Absorb factory overheads on the basis of labour and administration overheads on the basis of works cost.
A profit of 12.5% on selling price is required on quotation.
a) Prepare a cost sheet and
b) Prepare a statement of the selling price per unit of the finished product.
18. The cost of manufacturing 2,500 units of a commodity is as follows:
Materials – 40,000; wages – 50,000; direct expenses – 800; variable overheads – 8,000; fixed overheads –
32,000;
For manufacturing every 500 extra units of the commodity, the cost of production increases as follows:
Materials – Proportionately
Wages – 10% less than proportionately
Direct expenses – No extra cost
Fixed overheads – 400 extra
Variable overheads – 25% less than proportionately
Calculate the estimated cost of production of 4,000 units of the commodity.
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6. 6
Specimen of cost sheet
Cost sheet of ---- for the month of January 2011
Particulars Total Cost Cost per unit
Rs. Rs. Rs.
Opening stock of raw materials
Add: Purchase of raw materials
Add: Carriage inwards
Add: Other direct materials used
Add: Taxes and duties on the material purchased
Less: Closing stock of raw materials
Less: Saale of unsuitable raw materials
Less: Sale of scrap of raw materials
Cost of raw materials consumed
Direct labour
Direct expenses or chargeable expenses
Prime cost
Add: Works Overhead
Indirect materials
Indirect wages
Factory rent and rates
Factory lighting and heating
Power and fuel
Repairs and maintenance
Drawing office expenses
Depreciation of plant and machinery
Factory stationery
Insurance of factory
Factory/works managers salary
Water consumption in factory
Total works overhead
Add: opening work-in-progress
Less: Closing work-in-progress
Works cost/Factory cost/Manufacturing cost
Add: Office or Administration overheads
Office rent and taxes
Office lighting
Office stationery
Office furniture depreciation and repairs
Office salaries
Legal expenses
Bank commission
Telephone and postages
Office cleaning
Total administration overhead
Cost of Production
Add: Opening stock of finished goods
Less: Closing stock of finished goods
Cost of production of goods sold
Add: Selling and Distribution overheads
Salesmen’s salaries
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
Xxx
xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
7. 7
Salesmen’s commission
Showroom rent
Showroom expenses
Advertisement
Sales office rent
Travelling expenses
Warehouse rent and rates
Warehouse staff salaries
Repairs and depreciation of delivery vans
Carriage outward
Total selling & distribution overhead
Cost of sales
Profit/Loss
Sales
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
xxx
Xxx
Xxx
Xxx
xxx
Xxx
Tender and Quotations
A) Direct material and direct labour cost are generally estimated on the basis of cost per unit of preceding
period, subject to fluctuations in the market price of materials and labour rates.
B) Overhead is estimated on the basis of past experience as a percentage as given below:
1. Percentage of factory overheads to direct wages
= (Factory overheads / Direct wages) * 100
2. Percentage of office overheads to works cost
= (Office overheads / Works cost) * 100
3. Percentage of selling and distribution overheads to works cost
= (Selling and distribution overheads / Works cost) * 100
Or
The percentage may be calculated on cost of production
= (Selling and distribution overheads / Cost of production) * 100
C) Estimation of profit for a tender or quotation
Profit = Cost of sales X (Percentage of profit / 100)
If profit is to be ascertained as a percentage of selling price of the tender, the profit is to be calculated
as given below:
Profit = (Cost of sales x Rate of profit on sales) / (100 – Rate percentage on sales)
---------------