Q.

2 (B) Find out Labour Cost Variance, Labour Rate Variance, Labour Efficiency Variance, Labour Mix
Variance and Labour Sub-efficiency Variance (7)
100 Skilled Labour, 40 Semi Skilled Labors and 60 Unskilled Labors were to work for 30 weeks
to get a contract job completed. The standard weekly wages were Rs. 60, Rs. 36 and Rs. 24 respectively. The
job was actually completed in 32 weeks by 80 Skilled Labors, 50 Semi-skilled Labors and 70 Unskilled
Labour who were paid Rs. 65, Rs. 40 and Rs. 20 respectively as weekly wages.
Q. 2 (C) The following information has been extracted from the books of Chemical Ltd Company: (7)
Standard price of Raw Materials: A- Rs. 2 per Kgs, B Rs. 10 per Kgs.
Standard Mix: Material A: 75% and Material B; 25%
Standard Yield: 90%

In a period, actual cost, usages and output were follows:

Used: 2200 Kgs of Material A for Rs.4650; 800 Kgs of Material B for R. 7850.
Out Put (Actual): 2850 Kgs products
Calculate material cost Variance
Q. 3 (A) Assuming the cost structure and selling price remain same in the period I and II (15)
Period Sales Profit
I 120,000 9,000
II 140,000 13,000
Find out:
1. Profit volume Ratio
2. Fixed Cost
Break Even point for Sales
3. Profit when sales are of Rs. 100,000
4. Margin of Safety at a profit of Rs. 15,000
5. Sales required to earn profit Rs. 20,000
Variable cost in period II
Q. 3 B. Attempt any Two (14)
Q. 3 B 1 From the following particulars, find out the most profitable product mix and profitability of
Product mix.(7)
Particulars Product A Product B Product C
Unit produced and sold 1800 3000 1200
Selling Price per unit Rs. 60 Rs. 55 Rs. 50
Requirement per unit
Materials 5 Kgs 3 kgs 4 kgs
Direct Labour 4 Hrs. 3 Hrs. 2 Hrs.
Variable Overheads Rs. 7 Rs.13 Rs. 8
Fixed Overheads Rs. 10 Rs. 10 Rs. 10
Cost of Direct material Per unit Rs. 4 Rs. 4 Rs. 4
Direct labour rate per hour Rs. 2 Rs. 2 Rs.2
Maximum out of Sales in Units 4000 5000 1500

All The three products are produced from same types of material and same types of machine and
labour. Direct labour which is the key limit factor is limited to 18,600 hours
Q. 3 B 2. A toy factory presents the following information for the year ending 2016: (7)
Material Cost Rs. 1, 20,000. Labour cost Rs. 2, 40,000. Fixed overheads Rs. 1, 20,000, Variable
Overheads Rs. 60,000. Unit produced and sold 12,000 Units at Rs.50 per unit.
 Actual capacity of factory is 20,000 units per years. He firms get special order for 5000 units at a
price of Rs. 40 per unit. It is expected that by accepting this offer there will be a saving of Re. 1/- per unit in
material cost on all units manufactured, fixed cost will Increase by Rs. 35,000.and overall cost on labour
increase by 2%.
State whether the offer is acceptable or not? Why?
Q. 3 B 3. Skymark selling three types of product A, B and C. The management committee has decided to
discontinue the production of B since there is no much profit in it. From the following set of information
find out the profitability of the products and give your short comment on the decision of Management
Product Selling Price per unit Direct Material per Unit Direct wages per
unit
Dept X Dept Y Dept Z
A
B
C 300
275
305 60
30
70 20
20
10 15
20
10 10
10
20
Variable Overheads (% of Direct Wages) 150% 120% 200%
Fixed Overheads (% of Direct Wages) 200% 240% 150%