Answer the question only if you know all the parts.

Question1:

Khwaish has following details to calculate the questions asked below

Direct materials 10 kg @ ` 90 per kg 4500

Direct labour 8 hours @ `100 per hour 10000

Variable Overhead 8 hours @ `15 per hour 120

Fixed Overhead400

2,220

Budgeted output for the year was 2,000 items. Actual output is 1,800 items. Actual cost for year is as follows:

Direct Materials 17,800 Kg @ ` 92 per Kg. 16,37,600

Direct Labour 14,000 hours @ ` 104 per hour 14,56,000

Variable Overhead incurred 2,17,500

Fixed Overhead incurred 7,68,000

Question2:

. Analysis of income statement indicated a profit of

250 million on a sales volume of 5,00,000 items. Fixed costs are `1,000 million which appears to be high. Existing selling price is `680 per unit. The company is considering revising the profit target to 700 million. You are required to COMPUTE -

(i) Break- even point at existing levels in items and in rupees.

(ii) The number of items required to be sold to earn the target profit.

(iii) Profit with 10% increase in selling price and drop in sales volume by 10%.

(iv) Volume to be achieved to earn target profit at the revised selling price as calculatedin (ii) above, if a reduction of 10% in the variable costs and ` 170 million in the fixed cost is envisaged.

DISCUSS short notes

(a) on (i) Discretionary Cost Centre and (ii) Investment Centre

(b) DESCRIBE the three advantages of Cost-plus contract.

(c) STATE the advantages of Zero-based budgeting.

(d) DESCRIBE Operation costing with two examples of industries where operationcosting is applied