Assignment Questions
OVERHEAD
Question 1.
A machinery was purchased from a manufacturer who claimed that his machine could produce 36.5 tonnes in a year consisting of 365 days. Holidays, breakdown, etc., were normally allowed in the factory for 65 days. Sales were expected to be 25 tonnes during the year and the plant actually produced 25.2 tonnes during the year. You are required to state the following figures:
(a) Rated capacity
(b) Practical capacity
(c) Normal capacity
(d) Actual capacity
Question 2.
A company has three production departments A, B and C and two service departments, X and Y. The following data are extracted from the records of the company for a particular period.
Rent and Taxes Rs. 25,000
General lighting Rs.3,000
Indirect Wages Rs.7,500
Power Rs.7,500
Depreciation of Machinery Rs.50,000
Sundries Rs.50,000
Additional Data
Particulars  Dept. A  Dept. B  Dept. C  Dept. X  Dept. Y  Total 
Direct Wages (Rs.)  15,000  10,000  15,000  7,500  2,500 

Horsepower of Machines  60  30  50  10  —  150 
Cost of Machinery (Rs.)  3,00,000  4,00,000  5,00,000  25,000  25,000  12,50,000 
Production hrs worked  6226  4028  4066  —  — 

Floor space (sq.mtrs)  2,000  2,500  3,000  2,000  500  10,000 
Lighting points ( Nos.)  10  15  20  10  05  60 
Service Departments' Expenses Allocation :
Department  A  B  C  X  Y 
X  20%  30%  40% 
 10% 
Y  40%  30%  20%  10% 

You are required to prepare primary and secondary distribution summary according to repeated distribution System.
Question 3.
A company has three production departments, A, B and C and two service departments, P and Q. The following figures are available from the primary distribution summary.
Department  A  B  C  P  Q 
From Primary Distribution ( Rs.)  3,150  3,700  1,400  2,250  1,000 
The expenses of the service departments are to be apportioned on a percentage basis as follows.  
P ( %)  40  30  20  —  10 
Q (%)  30  30  20  20  — 
Prepare Secondary Distribution Summary as per the Simultaneous Equations Method.
Question 4.
A machine shop cost centre contains three machines of equal capacities. Three operators are employed on each machine, payable Rs. 20 per hour each. The factory works for forty eight hours in a week which includes 4 hours set up time. The work is jointly done by operators. The operators are paid fully for the forty eight hours. In additions they are paid a bonus of 10 per cent of productive time. Costs are reported for this company on the basis of thirteen four weekly period. The company for the purpose of computing machine hour rate includes the direct wages of the operator and also recoups the factory overheads allocated to the machines. The following details of factory overheads applicable to the cost centre are available:
· Depreciation 10% per annum on original cost of the machine. Original cost of the each
machine is Rs. 52,000.
· Maintenance and repairs per week per machine is Rs. 60.
· Consumable stores per week per machine are Rs. 75.
· Power : 20 units per hour per machine at the rate of 80 paise per unit.
· Apportionment to the cost centre : Rent per annum Rs. 5,400, Heat and Light per annum
· Rs. 9,720, and foreman's salary per annum Rs. 12,960.
Required:
(i) Calculate the cost of running one machine for a four week period.
(ii) Calculate machine hour rate.
ANSWER HINTS  
Question No.  Answer 
1  (a) rated capacity 36.5 tonnes; (b) practical capacity 30 tonnes; (c) normal capacity25 tonnes; (d) actual capacity 25.2 tonnes. 
2  A=Rs.46,697 B=Rs.45,304 C=Rs.60,999 
3  A=Rs.4,525 B=Rs.4,825 C=Rs.2,150 
4  Rs. 12,028; Rs. 68.34 per hour 
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