Page 117 - DMGT403_ACCOUNTING_FOR_MANAGERS

Accounting for Managers

Notes 14. Profit center is a responsibility center for profits and
(a) Variability and controllability
(b) Planning and control
(c) Cost and revenue

(d) All of these
15. The statement prepared for the computation of a product/service cost is known as
(a) Standard Costing (b) Marginal Costing
(c) Prime Costing (d) None of these

5.9 Review Questions

1. Once standard costs are established, what conditions would require the standards to be
revised? Give your opinion.

2. What is cost classification? Classify it, in detail.
3. As an occur what do you mean by unit costing?
4. Discuss analytically, direct and indirect costing.
5. Illustrate the concept of cost sheet through example.
6. Illustrate indirect and direct expenses by help of example.

7. Prepare the cost sheet to show the total cost of production and cost per unit of goods
manufactured by a company for the month of Jan. 2010. Also find the cost of sale and
profit.
Particulars Particulars
Stock of raw materials 1.1.2010 6,000 Factory rent and rates 6,000
Raw materials procured 56,000 Office rent 1,000
Stock of raw material 31.1.2010 9,000 General expenses 4,000
Direct wages 14,000 Discount on sales 600
Plant depreciation 3,000 Advertisement expenses 1,200
Loss on the sale of plant 600 Income tax paid 2000
Sales 1,50,000

8. XYION Co. Ltd. is an export oriented company manufacturing internal-communication
equipment of a standard size. The company is to send quotations to foreign buyers of your
product. As the cost accounts chief you are required to help the management in the matter
of submission of the quotation of a cost estimate based on the following figures relating
to the year 2010.
Total output (in units) 20,000.

Particulars Particulars
Local raw materials 20,00,000 Excise duty 4,00,000
Imports of raw materials 2,00,000 Administrative office expenses 4,00,000
Direct labour in works 20,00,000 Salary of the managing director 1,20,000
Indirect labour in works 4,00,000 Salary of the joint managing 80,000
director Contd...
Storage of raw materials and 1,00,000 Fees of directors 40,000
spares
112 Fuel LOVELY PROFESSIONAL UNIVERSITY 3,20,000
Expenses on advertising
3,00,000
Tools consumed 40,000 Selling expenses 3,60,000
Depreciation on plant 2,00,000 Sales depots 2,40,000
Salaries of works personnel 2,00,000 Packaging and distribution 2,40,000