Cost Accounting Management - a Factory Manufactures a Chemical Product with Three Ingredient Chemicals a, B and C as Per Standard Data Given Below Chemical Percentage of Total Input Standard Cost Per Kg

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COST ACCOUNTING MANAGEMENT

CASE STUDY : 1

Materials X and Y are used as follows :
Minimum usage — 50 units each per week
Minimum usage — 150 units each per week
Normal usage — 100 units each per week
Ordering quantities x = 600 units
Y = 1000 units
Delivery period x = 4 to 6 weeks
Y = 2 to 4 weeks
Calculate for each material
a) Minimum level
b) Maximum level
c) Order level
d) Explain importance of inventory controls?

CASE STUDY : 2
A company presently sells an equipment for Rs 35,000. Increase in prices of labour and material cost are anticipated to the extent of 15% and 10% respectively, in the coming year. Material cost represents 40% of cost of sales and labour cost 30% of cost sales.
The remaining relate to overheads. If the existing selling price is retained despite the increase in labour and material prices. The company would face a 20% decrease in the existing amount of profit on the equipment.

Question :
1) You are required to arrive at a selling price so as to give the same percentage of profit on increased cost of sales, as before.
2) Prepare a statement of profit / loss per unit, showing the new selling price and cost per unit in support of your answer.
3) What is the anticipated amount of increased material and labour cost.
4) What policy changes should the company make for maintaining the profits.

CASE STUDY : 3
A product passes through two processes. The output of process, I becomes the input of process II and the output of process II is transferred to wearhouse. The quantity of raw materials introduced into process I is 20000 Kg at Rs 10 per kg. The cost and output data for the month under review are as under.
Process I Process II
Direct Materials (Rs) 60,000…...

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