PKSIKDARS ADVANCE LEARNING 23 C EKDALtA PLACE

KOLKATA - 700019 M 98301 65501

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Cost Audit amp Management Audit

ICWAI - Stage IV Question 1 The table gives the Cost of Production of Product X

ProdllctloM 13600 unit Total Coat

Rs rakh RsjUnit 679 4996

(I) Ra_ Material (Ii) w _ aftd Salarie 1596 117

2020 149(Hi) Scorea and Cbotnolcals 87_ 644

(tv) S rvc aftd UtlUtl_ 080 6(v) Dcpreci_tlon 441 32(vi) OthCIT OvohelId 640 47(vB) Adrninistration Overheads

Nil Nil(vlU) Scock Adjustne-nt ToOl

(ix) Selling Overh- 83363 6129 middotr~1

4260 314(x) Interest 87623 6443

(xU) Salas R Usadoll (inciudve of Excise Duty) (xl) Total co of Sales

129400 2515 41777 3072(xUi) MaJaln of Profit

o~ Para 24- ofYou are required to rive at the folloWfno RaUo tor the furpoee the AnnEgtxu to the Cost AudIt Report for the product only (a) Fngtflt percentag of Capltal employed (b) Frotlt as a percentagEgt to Sales Turnover

Notbull ~ 1 Vor-ktng Capitalls a bullbullbullased aa 3 months cost 01 Sale (of Yeievant elernents

- of 008t on1y) aes separate data efaUng to Current Assets and Current LIbllltl fo the product Is not avallabl

2 Flatio of Net Slock to depreciation is 10 1 The Value of Gro Block Is As 75 lakHs and Capital Worllt-In-progr Is As 20 akh

3 exI Outy Ie 40 ojthe SalUng Prlc

r Namp~ BlocJc _ ft_ 80000 ~ 10 as 8 JoJch

WorkinJ( capial _ Coat of ale - (tntOreampr Igteprociadon) R 87623 tkb - (4260 O~80 ltUoch) _ R~ 33283

Worldn CapJtal ltraquo 3 cnonUu ooat oE alct 83283 14 _ Rl 208~20 lakh

CapltKI otnpJO)lod _ Nea block WollcJna caphaJ - Ra 8 lkh Rl 2Q8~2 lakh Q R bullbull 2162 lakh

Exelbullbull Dury _ t~ M 01$() I 140 _ R~ 3t~971 lakh

Profit (Bxeludlna xcla nlty)_ R~ (41777 - l1S971) luh Rs 4806 lakh

Protit boforo Itu= and LJabllltlbullbull _ Ra~ (48~06 42~6) laJch _ a 90 lampkh

N curno~et_ Ra (1294 - 36971) laJeh _ a~ 92429 lakh

(a) RAllo or prone Co capital ntplQyd _ 9Q66 I 21420 gtt 100 _ 04193 9ft

(b) RoUQ euroIf plOEh ItO aaJbullbull turnovo _ SgtO66 I $120429 )Ie lOO _ 98t

Question 2

ABC Ltd h r_o_lvedan _nqulry for the supply of 200000 LImber of Spaolal TYpe 01 Maghln_ Part CpaoltY exlbullbullbull for th_ rn_nu~aoture Of the m_chne parts but _ --tbced Invtrn_nt of 80000 and VVotklng capItal to tn_ extent of 25 ofSe_ V t b_ _qul If th_ Jeb 18 undertaken Th Coata a tlmated a_ fOUO8

RaW M_trta - 20~OOO kg _ ~a ~iL50 per kg LabC3lur HOur - 9000 of vvhloh 1 000 Quid be ovaTttrne hou payable a double the labour rate Labu Aate - Re 2 per hour_ Factory Oveead - Rs 2 pet dIrect labout hOUrS~

SeUing and Dietrlbution Expenaea - Aa 23000 Material Recovered at the end of th opration VIIff be Ftbullbull 8000 (eetimatEtd) The Company xpects _ Not FltufT) 0 25-0 on Cpltal Empjoyd~

Vo~ are tn Management Accountant 0 the COfYlpeny Tha ManagnQ Dlreetor requests yen to prepare a Coet and Prloe Statement IndlcatJng the prleo VIIhlch ahoula be QuC)tad to the Cuatorner

AnWer Stat-anent o~ Cost and Price Quottlon

Pr-oduca Machine Parts (Special 7ype) Q-aTltity = 200000 units as Rs

Mft1criaJs (20~OOO KgS as 2S0) 5O000 Less Se-rap -alue ~ 44000 LabQurshy

8000 hours R- 2 16000 1000 (On hour ltIigt R4tfr ~ ~

Prinr CQsr _000 Factory overhead (9 000 hIS (flgt Rs 2) liWJQQ Factory Cos 82000 SelUng and Djstsibution Expcentnses 230QQ

Telal CQSf 105000 Profit (Expected) 2833

Saiex 33333

Selling PrjC4 unit - 133333 200000 - Ft 067 Wor-klng Notes

Suppose~

SIlJcs =- S == Total cast 25 0( capital employed ZOSOOO + 2S1100 lt80000+84)

-= 105000 20000 S16 or 165 = 1680000 320000 + s 0lt 155 _ 2000000

bull ie S = 133lt3333 Sale-oS Rs 133333

Profit Sales - Cot = 13335) 05000 - l~s 28333

Working Cftptnl = 141h of $uj(

Question 3

FoUOAfing data is available for a cornpltlny -etRtlny to th~ Coe-t ot P(oduction of a product subjected to Cost AUdit

Prepare tho Export Profi-aoHUy StntaTHlHlt to oe inch_Hi~a jn th~ Annoxu(6 to tho CoSt Audit Repoft_

0$50

Producnoft

Sates (Local)

PKSIKDARS ADVANCE LEARNING 23 C EKDALIA PLACE

KOLKATA-700019 M 98301 65501

Web wwwpksaLcom middot2shylOoon Units

Rs 9000 units 202500

Sales (Export) 1000 unit~ 20000 Materials COngUlned 20 Tonnes Rs 5 kg 100000 ImpOfted Culnpontnl Rs 3 I unit 30000 (One unttunlt of production)DlYcctLabour 10000 Pto) Or=lt1 15000 Admlniraquolranve Overhead ~OOO Pdeght amp Packing (Local Sides) 4500 Packlna to BxPcentlt 2000 Handling At POr1 500 OpenIng Work tn-prog1ess 10000 Closing Work-Inprogress 5000

Additional Information

(I) Export incentive of 10 on FOB is receIvables (II) Draw Back-on-Duty paid on Raw Materials and Components vallble on

exoorts is Rs 2500

Ans~cr

Taking -ncQ consideration the rcqoccInenU of provbions under Coat Audit (Report) Ru)es hkc aho___ing scparately Local SalClJ and Export Sales With details Ukc Quantity Not Realisation PncclJn1t~ Packing CharBcs~ etc ProfitabJlhy StAtCJTlCmts have bcOJ) p~ 89 bclovv

Statement of Cost or P odu~tion

Production 1O~OOO unUs Total Pcr unit RI RI

Di~ MuLerials (20000 kSS at Qs~5 per kg) 100000 1000 Imported cClTnponenc (lO~OOO uniY iia 3 I unit) 30000 300 Dlroct Labour 10000 100 Prhneeost 140000 1400 Pactory overhead 15000 150 Opening WlP 10000 100

165000 1650 Less Closing Wlfgt $000 050 WOrks CO$t 160000 1606 Administrative over-head 5000 050 Coat of Production 165000 16SQ

aPCrt Saloa 10000 u nl1S PunlrTogtrai r~3bull ) tRsJ

COl of prCduotJon 16bull SOO 16 50 Expor Paekina 2000 200 ~_ndn at port (A) coc Ot _1bullbull OUdmiddotmExport sale reaUslgn ~g Cbampb IncOPive ltIIigt tOCJb oCP~OEJ_ 2 00 Duty DrayenVb-k Oft colnponent 250 (B) Taota1gt a-eaJldoD 30p~ oOlJI IEJtpo~ (8) ltAi

Question 4

The following data are extracted from the aCQOunts of a factory manufacturing Industrial alcoho~ for poUutlon control

R (a) Undertaking cnvironrnont ltnpet S1Udicamp 245000 (b) Depreclation Qf Bjo--g Plant Installed durina the y 675000 te) Otber rnatcrtais purchaampeC1 for mat1utacturc of Cotnpost manure 5~40000

(d) Salw-les -W or 810-- d Compost manure plant 120000 (e) Sal proceeds of manure Bold 340000

How you will treat the above Items in the Cost Accounting Reoord taking into account the $ocla responslbuHy of the companymiddotfor preventing pollution 7

Mos of the CO Accountina Records Rules provide for showing the expenditure incurred for omucnt treatment or pollution control as a separate element of QOSt~

Industrial Alcohol Plants are one of the most poJJuting industries and unless the effhlents ttre property treated and disposed oL they win contaminaro the environment and pollute the groundshyate1 in the neighbouThood The cotnpany tnanufacturing the product bas a socia responsibility to prevent such pollution and hence tbe e-tpenditure incurred for that purposc is a Jegitlrna~e cost in the manufacturing process

The cost of effluent treatfiiltent in the pollution ll be Alorked out as follows

Rs a) Cost of environment i-mpact 5ltudieamp 245000

(b Depreciation on 8iogas Plant 67S000 (0) Material cost for Biogas lTlanure 540000

(d) Salarie$ and ages 1 20000

15 80000

Less SaJe procecd~ of organic manure 34QooO

Net cost of Effluent TroiltmenL 1a 40 OQQ i2sdon 5

Tht follOWing is the Profit amp Loss Account ofPygmy fnduscries LuL a single product cCJInpany

(Rs in lakhs)

IncoJne 380242GrossSalts

Other income 20fDividend recei~d

2016inrcrest received Proftt on sale of iItVltIsrmentf 117

Sale of scrap -48Z Total lnCOftlr

Expcnses 264894MaterialgtcOrsun1ed

Ul9)Increase Ul stork 806Stores ond Imiddotpares consuIIud 9878Power aru fult1 1252Rev(_uys and rnalnle(uUuc

PKSIKDARS ADVANCE LEARNING 23 C EKDALIA PLACE

KOLKATA - 700019 M 98301 65501

-3shyWeb wwwpksalcom J29LabDf4r prDCss~nB and macld hirelCharBlaquo 441 til

TOIQ~ 6mploylaquo cost J72SQJr1pitlls 4tJltllS promotioll and advtrtis4menl

3285BrDlul4Iltll~ discount and cQmlftission 3884Warlaquohousing and distribuTion fffxp~nstS

AJdiJioneU 3414 TcIICiITuInovr Tax (not recnlJrable) 170 j80Provisionfor bad btl

h~SIacbullbull tffA~S amp tQXIIts and other 4dminlI(nive ixpel1s($ 587 35828C~lral ~cisfJ Dul) paid 12160Intlrest arulirtanctf cha11Jes 65DepreciatiDn

---UlQLoss on sAL ofQSSfilts ~

bull This includeJ ~mploye~ costs of Selling and diJlribllltion Rs 232 lllkh

Clunll Stock as On 332002 iRs lakhs)

Raw mDurlals 378 Sto qparrrt 72Q WDrb-inprltgtes 1777 Fini6hlttd ods 0234

Worlc OUI the follo IGIlol as iJulcaea ~ yennl Ann(f)(UTIIf to 1M Co Adis Rllport

(a) irtlt _ pnzGbullbull ltifSallts (b) Sllb06 iI1UId di6l1rlburJ CO prcnrag ltifaus (t) Fillithed(foods oek I Irmo$ ofnmbr cifonM cah CDst of ale

(s) Rs(lakhs)

S Intereat amp Pin charso 12160 Le$3 fntonest leceiv~ ~ N bullbull Jnt lOJ_

LtlslBD6-

1_ _ _101441344414 - 295J11o

(b) Sclll and Dlamptributlcm Bgtrpona

Rs (okhs)Employ___ 232

Sarnp slea promotion and advL 372 kortc 3285 Wanobouain Distrn 38S4shyAddl ST 1720 Prov fof bad deb ~

IQIl2l Sellin amp DIdbutlon BKpons a$ II JIIo on sales 10073344414 29211gt

(c) Cltraquo~ of Salbullbull

Rs(lalcht) Thtal xponas ~ LA_ 2gtltd_ duty 35828 In-at roceived 2016 loa on 10 of FA 280 Sal of scrap ---AB2

lJUWl Cost of sal 327432

Rs (Iakh) eoat of aal 327432 us Dotpreciation ~ Cuh ooa of lea for Ih y 3ll18l

Po month 31178112 21982

Stock of finished goods 10234

Stock of finihed good~ i~ terms of number of months Caah con of sales 10t34 2982 _ 039 months

The fotrowlng I the abridged ealnoG Sheet of PoWerpack aDUGI~ Ltd

(Flbull In I_h) 3132003 3132002

labllltJs Shae Capltat sao ~uo

Cebenture Ftecternptfon RosGrve 25 SO Capital subsidy from $tete Governmenf 30 SO AevtuatJon Aeerve 125 40 Genera R bullbullbullrve 160 120 ealance In PrOftt amp Loss Ale 48 32 Soour~ Loana 275 295 Unbullbullcured Loans -123 llZ

1O1U1 ~ Abull tfItbull~

Giro etook 725 680 AcoumulatedDeprecfation (3t5) (290)Cept V(0nc-laquon-Progreas 43 37 Invet~nta 5 5

Cunt A r~middot

fnventorbullbullbull 47 4Sundry Oebtofs 182 95 Advances for CapItal Equipment 2 7 Othel Loans amp Advances 44 37 Cash amp Bank BalancQs 2~ 9

CurrQnt LJabllltls Sundry Or-edltor$

For Capital expenses (17) (21 ) For Others (185) (197) Provisionfor Taxes (64) (71)

MidceUaneous Expensoa ~ ---1P2 TotEli lQae JQG~

PKSIKDARS ADVANCE LEARNING 23 C EKDALIA PLACE

KOLKA T A - 700019 M 98301 65501

Web wwwpksalcom middot4 Notes

(a) Fixed Assets include Goodwill and Patents As 122 lakhs (Previous year As 137 lakhs)

(0) ~ TerlYl Loans duo tor repaymont within 12 tTlonths are Re 96 lakhe (Previous year As 84 akhS)

Calpulate the follow-tng for the company as a VVhote

(a) Capita Employed tor the year ended 3132003

(b) Net Worth a on 3132003 amp 3132002

(0) Oebt-5qulty Aatlo as on 3132003

(a) Capital Employed

(Rs In L~kh) 3bull2003 3132002

CitOlUl Btock 725 6S0 Lssmiddot Doprcclation u1 ~ NetSlock 410 390 L~ss lntangible AS$CtJi J22 Ju Nee Pi xed Asscts 288 253 CU1fOnt Assets 31320003 -3132002 Inventories 47 441 Sundr-y tgtcbtors 182 195 Loana and Advances 144 137 Caah and Bank -4l ~

Ml 222 Cun-ent UbUlties Creditors othora 185 197 Provn fOT taxea 64shy 71 Loan due in l2 months 2fi -ipoundl

~ 3U Working eapitl ~ ~ ll2 ~ CAPITAL EMPIOYEO JSll fEU

Average capital etnployed (707+693)12 = 700 Lakhs (b) Net _orth

CR Laklh) 3132003

CR Lakh ) 3132002shy

Share cap tal 300 300 Debenture Redctnption Rse1Ve 25 30 Capbull ] Subsidy 30 30 O-ODCItal Roacrve 150 120 Balance in PampLAfc ~ ~ Equity 563 512 Less Intangible Assets 122 Misc Bxpenditurc 22 Not Worth

(0) Detn-Equlty aUo

Dobt Secured amp Unseltured Loans 398 412 I-css due in 12 JDonths ~ ~ IonS term debt 304 ua equity all in above 563 512shyDebt Equity Ratio 0 541 0641

Question 7

Following ara the data avallabl om a company which has both domee-tlc amp export albullbull Th company I 8ubJ8ct to Cost Audit Prep statement at _gtltport pro1ltablllty

Production 10000 units

S_ Do8tIc 9000 unItS 0 Rs 22 per unit Egtltpltgtrt ~OOO unts Aa17 per unit Raw Maerlals Consumed R 90000 rnponed OOn1ponent used

only for Export quality A 3000 Olrect Labour FI ~OOOO

Factory OverheaCi Rs15000 Adniatratfve Overhead As 5000 5xport Packing As 3000 Freight and Pecklng for DomestiC Sales As 4500 Handling at Port As 500 Opening NP Rs10000 Closing VIIP Rs 5~OOO

For export an importad ootYlponent is to be used at a cost of Rs 3- per unit The indlgenouajy produced component that Is used for domestIc sales and Inoluded in rElv matenal ccneulTJp1lon fa Rs 4- per unit

OraVgtlbaok on the 000 units exported I Ae 1000 AnsWcr

Statement of Cost

OULpUt 10000 units

Rs Raw Materials 90000 uss Cost of components used for domestic sale (9000gtlt4) ~

54000 DiTect labour LQQQQ Prime Cost 64000 Factory overhead JSQQQ

79000 Add Opening WIP lQQQQ

89000 uss Closing W1P ~ Factory C05t 84000 Administrative overhead 5QQQ Cost of Production 12ilOO

P KSIKDARS ADVANCE LEARNING 23 C EKDALIA PLACE

KOLKATA -700019 M 98301 65501

I shyWeb wwwpksalcom 5 shy

lostlunlC Rs 8900010000 - Rs 890

StateeDt of Export -ontbllity Rs ~ Cost of Expon Sal_ (1000 units qp Rio 890) 8900

CalK of Import component used91OO0ltlrS 3) 3000 Export pIIClcing 3000 COSI of handlinjl at Port ~

Coal of Exports 1S400 Sal (1000 unitaRo 17) uooo

Profil 1600 Add Duty Drawback on Eport lQQQ

Export Profit after adjustment l6Xl

Question 8 Card re1tingL to aThe foUowing tranbullbulletton are extracted from Stores Bin

colTlponent during tn year 2002-03 Dal Receipt (unit) 1$lt1 (units) Balance (IJnirsj

200 42002 200 100 001842002 50 SO

250 10 2003

200 2332003 11532003

250

Total oonsurTlption 400

Calouate the Inventory Turnover RatiO

An~wel

Inventory turnover Uo _ Average Conrumption 1 Average Stock

Stack (units) No of d ys Product

lta) (b) (c) (a) )( (b)

200 17 3400 100 267 26700 SO 6S 320

20 1- 37-0 o ~ --ll

~ l1lXI Average stock 371001365 10164 units

InvClntory turnover ratio Average consumption I Average stock - 400110164 394

Queilllio 9 lit a ftUIory PnJducJn8 Indwltlal alcohol bioga ir geralelti frwn lh gtvaillt WAS The bioC= used as tlfuttl bl lltttllluttam 1011 with COnlHlUJonalful oil Tit high p1tl66Urltr ream i$ first s4nt to tlut 4tant tUrOJIM andthtll thau3t 3tO is ustl1d in thttt process ofmanQcturing acool rJu fall in t tltalpJc val DfI am is 10 Front tit flt7l1owilfB dat PPQU sJpaat~ corr shts for Sfant and Power

Boil4r Stun 7)ltbi

Rs RII Cosr of Mizrr 209615 FuIOil 18377090 Biogas PJanr Exp~3es 5160326 StcnvfS amp ChenJicols 545 339 Salaries amp Wagols 591650 146565 Ropcus amp Main1enQI1CIfl D~pnciarjon 312831 5JS24 DepfIciarion 344948 29905 Other Expnslts Zpound8ZM ltin High PrfIzsurt Stttom generated 33739 MT Pow~ gttIfItTQId 1965990 K WH

C04t or Steaun

Quantity produced 33739 T 1btal anount COMJIlYIT of Steam

lU bull RIgt Water 20963S 621 Fuel oil ]8377090 S4468 Slogas plant exps 5160326 15295 Stores Blld chemicals 51415 152 Salaries and wages 591650 1753 Repairs and maintenance 1312831 3891 Depreciation 344948 10n Other expenses 798714 ~

268466Q2 12iJi2 Cost of PoWer generated by Steam Turbbe

Power generated 1965990 kwh

Total amount Costkwh

R Rs

Steam 26846609 1366 Stores and Chemicals 13139 001 Salaries and wages 146565 007 Repair and Mdntenance 51524 003 Depreciation 129905 006 Other expenses 24132 QQl

27211874 1384 Lessmiddot credit for exhaust steam -241151948 u22 Cost of power used in Aleohol manufaetllre 3049946 lSS

PKSIKDARS ADVANCE LEARNING 23 C EKDALIA PLACE

KOLKATA 700019 M 98301 65501

Web wwwpksalcom 6 214ltflSUoIt 10

The olloMling figures ale taktt1 from tlte rtuord- of a company SltbICl to Cost A Lldit Calculate he Value AddiTion irs ratio cU a perclttlltage of sales od also shcrv the disrrtbution of tne Value Add~ui as r(quired in Para 23 of the Annex1yen 10 Cose Audit Report

Rs lakhs

Oross Sales (including ED 0 Rs 22801lttkhs) 37400 increast b2 cloJinK srock of WI amp FO J4 Raw MateriaLs P~cking Matsriais atd Stores de Spares consuFt1~d 14520 Salaritfs amp Wages and omsr employelt bel1~filS 6225 MVs Retnuneratlon 6lt POlVer amp FJlel 5234 Rates amp Tax~f l74

Addirionai Sale Ta~ (nOT Recoltahl~) 748 Deprfci(ltton 1849 IntlreST 2120 InctIne from lnvestments 74

Profit on Sallt of Assets 150 Other nlallufacrurg~ rltlling and distrIbution ovtrhflods (Purckasdd-ifentS) 1440 Provision for 7aces 175 Dividlld Proposcd 570

Answer

Para 23 Value Addition and DistrlburJon of Earnln

A Value Addition RsLakhs

1 Oros Ies 37400 2 middotfes$ Bese Dut) -Zlampl 3 Net Ies 35120 4 Adjustment in tocks (+) --1l4c

35234 S Less COSt of bought out materi als and services 21l2l sce detai Is belo 6 VaJue ddd 14040 7 lncome from other sources ~ 8 EafT)ings for distribution ~

B n~ributiol1 of Ea-nines I Etnployces as salaries wages and all benefits (including

MO$ muneration) 6287 2 Sharenold dividend 570 3 Retained Funds- (Oeprn amp Profits) 2341 See dotails belo_

J849 4 Government as ~raxcs

a lnCOme-lEtx provision 175 b) Rates and taxes 174 ) Additional ampJell till MIl 1097

Others - Interest JUQ Toal ~

BlOught out goods JUlcl servicWs

Raw cnaccrillls packaging materials storeS amp spar-es 14520

Power and fuel 5234

Other mBnufacturin~ expenses ~ Proftts

35120Sal InctCase in stoeks --llel

~ Bought out g()od~ and services 21194

Employee costs 6287

Depreciation 1849 Taxes 1097

tOLer-est u2Q 32Sl2

2687PrOfit Othomiddot inCOClto 22d

291 t

Less~ PropOsed dividood ~

RotAined profiti u4l

Value addition as on sale = 1404035120 -- 4-0

-t2uw 11 Th4 foUo~tllg is the Profi amp Loss Account ofPygmy IndltSlries Lcd a sngl~ prodwct company

(Rs in takhs)

lncotne 380242 Gross Sal4s Other income 201Dividend r~ceived

2016 fuftnesr received

l37Profit al1 sale of investtnenrs

~ Sal I of ~crop

Toral inconte Expenses

264894 MQt~r~~i$ CQuskIHed (3179)InCrltClSe I srock

8061 Storllf and spares cOllsurrced

9878 Pover artdfuel

l252Repairs and TTtaint(fuuue

fJ29Labour proC(SSiNg and I7J4chil1e hi~ charges

44lTotal employe costs

372Sal1lpiftS 9 salrs promotJon and advertiflfnlent

3285Brok~rag4 discowrtt ancl conuniOsion

3884Warehousing and distribution expenses

720Addilion(I1 Sales 7axTurIJOV~U Tax (nor r~uQve7ablltlt) 580

Provisionfor bad debts 5837Insuraltct rales amp tltZX8S and orner adrniniSlrariYe expenses

35828Central Excise Duty paid

PKSIKDARS ADVANCE LEARNING 23 C EKDALIA PLACE

KOLKAT A - 700019 M 98301 65501

Web wwwpksalcom middot7shy12JO)

Jnrrt~middott andfircpnltf711 charge 156 J DpltdfJrarr --UIULcuor Olt 8lt ofOlfls

~

Thu fltcUJS IImployec COJmiddotS of ornilill and di~middottriblaquotion Rs 232 lQkJr

CI~ilampR SU)L-k 04 (In 3132002 (Rs laknd

3785RfLtV lnaerinls 7tll Sunr4 of jPltEntf

1777 WorkJ_jn pn)(es~middot J 02 $4 Fini$hlui If(oods

Work ouyen ~htif olloltIV4ng rario3 as indicutfa in rhlaquo Autxotnr 10 the Cast Auail Rl(l(pcn-r

(a) 4rrcl ~ a p4fTCtIIfnyen4841 ofSales (h) SUlng und disn-ibution cosu Qs flNlnmiddotClI1~laquo-gl of31(111$

(c) Flnishd coods srock in r~rnts of I1rnber of wtonlhs cash cosr ofsatlllrs

A_

(a) R (okhs)RI_ (lakhs)

121_60380242 Interet amp Pln charge 358 28 LAN Intust recoived

Salea -2Ql6 10144344414 Net interestNet s lea

alo_l0i4413444~]4 _ 295lnCOftllt bullbull CJL on

Rs_ (lodhs) ~32Brnployeec coat 3_72

38__ Sampn1plalas prornoCion and dvt

32SS VVhouln amp Dlcn1 Addbullbull S_T_

B1OkacaJP etc

1720 P v for b ___ -LIW

lSlQXl bullbullnlna DItrib U Ex_n _ on al 100_733-14 - 292l1V

(c) co~ 01 Sal

()StHSO +_IMa1 Xpeftllbullbull Lt BxJf duty 3SS28 Inrreat ntQIOl vod 20_16 Lobullbull on sat of FA 2_80 Sale Of scp --Aa2

~ gt274_32

Rs (la-kits)

Con 0 raquo4d 3274 32shyLJM optOCliadon 156 S 1 ch ooat of loa for th yeampr 3 t ] 7 81

pu_IiDn 12 A $818 prodUCT indUlry prfU4tllWt Is principal raw Inar~rlalfromfDr difjrent JlDUrcJlt3 taking ino aCCDunt tltlt quollry dWItC~A in til sUppUIS fTo Iach Sd4tl1tC4 rh cont-pan) has euiltpred thlt foll(gtwilr no-r Df ytlld in budlleUB __

MGlttlrdl1D1H lDurcl A raquoS 9amp yidd MGrriaJfrona iourr B raquo0 yiotld MattlrlaJrol1l SOUICft C 85 yild Maf4trialfian fIaurc D 80 9amp yield

D-imiddotg rhB raquolaquoar 2(J02-03 Ih~ ~cnspa~zy UUd thl following I11lx of reJMlt l1uu4frfoll jronJ tl1e Jato soUn~S

A so BIO D 2

Tk r(1rDi inpyend lIveiglu of rGtw IDQk~icI(f ~ 4200 on~s and the output oDlflinllla as 37400 ICHIS

No ill You P-Sftfl1 rhlaquo abovrI dara in [hI C~ Audit R4IPOrllJl cDIf1pleuin the actual consurrt~ion INllh the ItOIt11$

Answer

Weightod Average norm of cOrtlUnvpt~HI

SOttn~ In Mix Std yiiftld oCJI wtighrltrd yield

A SO 95 4750 B 10 90 900 C 15 85 12_75 D 2 80 ~QQ

JJI2 ~

Por every tonno of output for the ampCtual tnix the nOMTlaJ U5aSO was 100 I 892S _ t 1204 (1)

Actual consumption per tonrto of OUtput i 4250037400 = ] 364 T

Th dtat will be leportod in Para S (8) by Cost Auditor as f-olloWs ~

Particulars Unir Acl41 USa1f~

Lasr Year Year B~fore

Material Tonne I 1204 1]365 lb be obtained and given

gIW 13 A clUtr orzJalie elyUf1l capanll$I((ncltcui ill Out outskJrrs ofQ city 114JIv b bullbull cJUUittlD Un Ihttt offftCttIJ of pltJ14Iclnll me ground aC4tr The ccnnpGhies lI4Ie nkd TO pur up tlflYlflillfIU IrreaWhtnu pionyens and irnutNJIAtrouly arlltfhlltfOr supply ofporab~ _aNtr roO abo~ JOOO TWIrklnr6 ~ctctd ThI dyct untl JOinrt)l forlft4td a cceprativfII rdCilitly rfgt pur wp a COIiU~ ~JJfucftl flW4I1f1 pia and alsoJbr swppl)l drlnklng WOttlYo Tit C0fftPany $ CoO Audir ~taIttII~ 1urriIUad rluu lh~ conpClli ~s nvtlrtfTltlnZ i me cQopcrativlt tocitty an inyatlnut oussilt1l thltll bMisilt Is Ihis cand CoOrldcr If 1amp01 he ill thtt iY4r~-l1 and t1u ruUtiMif ttrXpllrtScs of laquo tOCiflUy be euroU4uI l

AnampWeJ

Etnue-rn tt1centqtJlern cost is one Qf the normnl coat of production roMTlina A corporate noltZultty is only one of the ahcTTlalives ftvaHAble to tfke care of thi~ fune-don Running effluent treAtrnent activhy through 4 600Ciety has tWo lto~s - ane the CApital expondhutC in plant (CsrO) nrId the other is the cost of apcnttion which altain hafl tVtlO cornponcnu~ ~ one effluent treatrTlent cos( and the other is cltgt~ of supplying Vfl~er to the affexted people Thf-~ ctphaJ co~t is by sUD$cribing to

the sh re capitAl or the $QCiery The ETP operlltion cost find (O$t uf ator sLipply vvilt be recurring revenue The share capital h-vel(TnCflt ie- very Hleh bull part of the eOlTlpanymiddot eaph ernployltej (to t~e cxten~ of the vliLlUe of the ihlUes subscribed) and the opernting costs payable to rhe cooperadve SOCiety bascd on the quantum of CtllUeJlt treated i~ fl COflt ~l-h~ invcstlnanl cannOl hlt consldercd a5 investment out-side the cOtTponY~5 bU1uoe$s

PKSIKDARS ADVANCE LEARNING 23 C EKDALIA PLACE

KOLKATA - 700019 M 98301 65501

Web wwwpksaLcom 8middot Question 14

(a) Folloving data is avaiiabl~ for a COfTlpany relating to the cost of production ota product sLlbjeced to Cost Audit

Prepare the ExporT Profitability Statement (0 be incuded in the Annexure to the Cost Prodwcenttion 10000 )nits

S81lt (L0ltgta1) Sales (Export) Material consumed Imported Component Rs 3unit Direct Labour Factory Overhead AdTllnistrative Ove-rhead Freight amp Packing (Loo1 Sales) Packing for Export Handling POri Opening Work-in-pfogt-ess Closing W(lrk-in-pt~ogess

AdditlonalnfoJution

Rs 9 bull000 units 202500 I 000 llnits~ 20pOO

20 Tonnes Rs 5 Kg 100000 30000 10000 15000 5000 4500 2000 500

10000 5000

(1) Eqtort inccntivq of 10deg0 on F_O13~ is rcceiVflble$~ (ii) Dra Back-Oil-Duty paid Of) Ra MateriAls and Components available on export

is Rs 2500 (b)

(1) Why is Cost Alldit R~polt not -Dde public Whether the rnefnber of Parlia01ent haveaccess to the Cost- Audit Report

(i1) A cOTlp~ny 1nnlfa~tlH-ng CoHon TegtEtde rote off itl the same year the cxpendi1~ue in replacelnent ofCopper Roller$ li$cd ror Printing Fabl-ics Alld Stainloss $teel fran~es used TOl Dying Yarn hose OFe are ncue than onemiddotmiddotycar_ State Whether the Cost Auditor can qualify the report for thee

lti ii) A person has been appointed as Cost l-uditormiddot for tYwenty products lT1snufacturod in sevcn eonpan~es_ He is again propo$cd For appointlnent as a Cost Auditor for three lIlOre prodttcts manufacturd by tvvo other cQfnpanies WilJ this appohument be ~ in order~

(iv) ~ A person is dOinS Internal Audit on one of the tmiddotactolmiddoties JllaJlufacturingCemcft ilf a compan) He was proposed for appointment as CostmiddotAuditor n another ractory of thostltne cOJnpsny Inanufacturing cernent fur the s~me pcriod_ fs tJlS appointment

Au__er as CO$t Au~itor in order~7

~fkllla inl-O cosideTetion the r~ulre11enq uder proviaiona under Co-at Audt (Repcu-t) Ftule$ Uk hoVin~ fileparate1ymiddot Local Salos IlLId Export Salea vvith detaUs tf~~ QuaBtY Not RoallztthgtI PrioetJnh Paeking Charaes etc Prof5-cabi Hty middotStatdrnents have been prepared aa beSOlW

Stateampnt of Cost of Production

Ploduction 10000 Utlrts

Direct lntcrlahsmiddot (20000 Kg8 Rs Smiddotpcumiddot Kg) lrnportOd Qonponents (10000 ttnlts regRs3unit) OCIOct ofbotl~

Prime COMSshy

FlI-ctory ovorhc Open ina WIP_

Lcss CIOstns VVJP ~-amp)rlss CpX Adrnl1[ptrative Overlldad C9~ of pduy$log

Statement 0- Cos and ProfII or Export Saos

Total Per unit Rs Ra

100000 1000 30000 300 100QO LQQ

1 40~OOO 1400

1 S~QOO IS0 10000shy ~

165000 16S0

5QQQQ ~ 160000 1600

---gtQQQ ~ 165000 ]650

Export Sates 000 units

Cost 01 Production Export PaCkIng Handling at port (A) Coat o~ 51 190001middot900

Export Salos reaUaatton export inontv =100 FO_S Outy OravvtJack on oomponent (8) Tot Uzatlot Prorltan Expore (B)-(A)

a tlon 15

n)tapc uni~

(Rs~) (R4I) 16500 1650 2000 lt00

500 050

20000 lt000 2000 200 lt500 2150

24500 2450 5500 5 SO

The middotfOIiOwing figures are egtctrSicted fron the AnMua Report of Eastern industries Ltd

3132005313~2006 (R In tkha)(R~_ In ~khamp) --~~ SOURCESShsre Capital

Reserve aflo StJrphJs

I General Reserves Oebonure RederYp1ion Re-serve Rfilv~uQtlon REtSiervo Profit amp Loss Account

S~Qured Loans

I Debentures Term Loansi Cash Credit

Unsecured Loans Flxed Deposits InterGst Free Sates Tax Loan

TOTAL APPLtCATION OF FUNDS Net Block Caplte1 Work-in-Prograss investments Current Assets Loans amp Advances Cu-rent LiabHitios amp Provtstons MIscellaneous Expenditure

TOTAL

24002400

22lt0021000 570011300 74006200

3750038700 ~~-_iillQ

2200048000 14~1005300

4325061100 ~ ~

22102000 _-QQ9 lLQOO ~ ~

~~OQ ~

7236086650 1BOO8250 5600S~050

21B5011~gg 13100 -JlQaQ 126100 150 ~

1320C ~ I

PKSIKDARS ADVANCE LEARNING 23 C EKDALIA PLACE

KOLKATA - 700019 M 98301 65501

Web wwwpksalcom middot9shyNot

1 I Oebenturbullbullbull ndbullbullabtbullbullbull 1QUow-

Ra 1 20 eret tt nd or the 5 eW and 71 years In eqvai inalimenUl The earUst date of rdemptlon I 300iiiJ200tS

R bull 100 Oro In tN middotbullbullrnannu instaUments fror 30062006

R-260 Qrorilt ift five orYtt-annua1 iftet8UIfI_ntamp of Ra 40 Cror and one finbullbull ina14llllrnent of R bullbull80 CtCHWamp CCHTlnClng ffCttT 30062010

2 Term Loan and Fixed Oeposits pllyabl~ before 3132007 F=t_11$Olakn5 (prlou yesr R 4050 lekh)

3 Re3000 lakha of fnteat F Saloamp Tax Lolitn is repayable on 30 l 2006

N~t Block lnclud laJue ~f end equity (bl8nda purchased) Ae1250 t8khamp (p~vrou year RS1450 lakha)

You sre retQuired to Calculate

a) Capital _nployed bullbull cenned In the Annexure to the Cost Audit Report b) Debtequfty Ratto _8 on 31032006

AnSWer to qulon ~a)

C I 1m dbull a DlR Rlbull

n 032006 3~ 03200G

SOURCES Net BloeK L Rvaluation Fl__tva

tas Intenglb AataSnCl Equity) Net Curnt Aebullbullbull Lase gliiZi 5hbullbullbull rdtbio 12 CCQoltl

OebenturtMJ -norm LoOonsll OepottaIntt Free ~)( Lon

capita employed

lt_In _kh)

Beeso 6200 ~ 13100

aooo 11150 ~

79200

~ 60150

(Rbullbull In lakh)

72350 7400 ~

12eoO

-4050 - shy

3500

~ 722t10

OlIJO 72250Avga Capltal IPtoyed - 2 - 715 1200

~_~ queortlon Ib)

paM-SSyity a_gp

Debt Oebenturbullbull 4000Term Lon 6300 FI_d Oepo11a 2000 tnterbullbullt Sal TIIx Loan P 000

84300middotl__= Duo wtthln 12 month 2 HSP

Equity Sh-Capttal 2400Rrv__oIl1dj~g Rvaluatlon Reserve ~ 34900

Oebt-Equlty Ratio - 152150 3-4800 - 149 1

tlonc 16 A company manufaoturing elngl product h~u an intaHed opacJty ot 25 akha MT Ouring the year 200304 capaclty utfilzetlon vvas t00 and the coat detU8 ra bullbull under

Unit variable ooats were Rs91S per MT as detailampd below

RsJr Raw materia 600 Labour 150 Pcrwt (Varlabte) 65 Consumable 20 p klng AQ

JUSFbc6d costs for the year were

Ralakhs Overheads 120 Oeraolat100 100 Pow r (MO Ch rges) 375

Ouring tne year 2004middot05 the production was only 125000 MT due to tower demand in the market During this er the VartfbrEt costs 8$catatod by 7deg0- but there was no ohange in the totat Fixed Costa

Calculate the Total Coat Jgter MT of the Product in 2004-05 Wtlat wiH be the abnorn-uai OOSts anet how would this be reporte~ In the CostAudlt Report

AnsYVer

State1THnt or totAl CClit per MT Cor 2003-04

RaIMT RAWV Matorial 600Llbour 150 PnYVomiddot 55 C(Uurnablo 20 FlCKU1M 80

Vntiblc CoetlMT 915

Fixed Over HQad 48 1202 5 r)aprccjtltiltln 40 1002Puwor 135 3 3U)J2 5

Total Co~t per MT fOr 2004-05 Production MT 120000

R~MT Raw lVfntcrinl 642 Lnbnul 1600 Povt~r 6955 Coosutnnbles 214 Packinr 856

Variable Co~n 9790~

PKSIKDARS ADVANCE LEARNING 23 C EKDALIA PLACE

KOLKATA - 700019 M 98301 65501

Web wwwpksalcom -10 -Rli Lukha

Pixod Ovor Head 120 Deprociation 100 PoWor (MD Chargoor) 3375

223375

509f of ThttLl ~~bccd COEJta ~11687)125 tnkhs 893l FixGd c(It~t B) (ii TotRl COlftpor MT (A)+Bgt 10684shy(Hgt SO~ of thu Filtvct Co~t vrill bo oooaidcTed illS Abnonnol

Thi~ vill G~ RH 11~687 lokh 1hi~ will be reported under Porn 17

Altcrnatlve An9V~r I

Culc~t1tj()n ur-total er1t(t petmiddot flr~

Productiuu 250000 12~OOO ~~__~~~__________~__~____~2~Q~Q~1-_______________~~__~~Z~O~Q~4L-~O~5~~__~_______

Partlculnrs Ftr l1T Total Amount PC1MT Total Amount Rs ns R~

Raw Mutcrial~ 60Q ~5OOQOOOQ 64200 80250000 Labour 150 37600000 lElO50 2OO626OQ PoWor (Variable) 65 16250000 6955 8693750 ConMutnables 20 6000000 2140 2e75000 Packing

tiXed CQgt~ 9U5 228750000 97950 12238125()

Overheads 48 12000000 4800 60~OOOOO Deprlaquogtciation 40 10000000 4000 5000000 POVllcrltMD churgea) 135 337500 135 168~750

Overh~ada 12000000 Depreciation 1~OO~OO~OOO

POWtr(MD Churges) 337 SQQ

Total

50~o(Fiyenod expenses L11 68750 will be shown Icoll id~red 8amp abnorrnaJ This Will be roportud in Para 17

QUltaation 17 From the following data extracted from the 0091 Accounting Records of a minlsteel

plant prepar a report to the management analysing the reaons for tf1e variance In profit from the- BudgeLIgnore increasedecrease In opening and olosing stocks)

Budget Actual

Quantity VEllue Quanti1y Value RsLakhs Rs Lakhs

Produc11onlSaies 33000T 30500T SaJeVaJutJ 4897 Raw Materlat Consumed 37500T 358SQT 3050 PONar CQnaumed HI8 1952 869

(La KWH) (Lkh KVVH) Other Veriabto CostS 949 S8e Contribution 490 92 Fixed Expen 300 260 profttLobullbull before Taxes 190 16e

AnampWer

Variance Worksheet

1 Sale Price Budgseed priceunit-52BO lakhsla3000-Rs~eooo Altitual- 4897 lakhsl301S00-R15400 9010 prilte variance Rea8a lakha (A)

2 Ra Material Prioe Budgeted price_aOOO 1khr37500~R8000 Actuallice-3050 lakhsl35880-RaB500 Raw material price varianceRs1791nkhs (A 1

3 Ra Material Yield 3300OJ37500~88 Budget 305001358B2-85 Actual Yield variance (3050085 - 30S0088)x8000=Rs97 lakh (A)

4 Po Rate Budeted Rate_841119Bz425IKWH Aotual Rate-8891952-4-401KWH Povvor Tote variance - 1952 X 2_Rs391akhs Adv]

5 Por ConSUtnptiou Budgeted pric=198 l kh6l33000~600 KWHitonne Actual price=1952Iakhala0500-640 KWHttonne POWCl usage vurianltlie-3~500 X 40 X 445_Ra54 lakhs (Adv)

6 Other Variable Coat Budgeted price_949000008S000_Rs28751tonne Actual pmiddotie_68600000aOISOO~RB2250tonne Other variable eost varlanc~30500 625_Rs191Iakhs (Fav)

7 Vohne Budgeted Contribut1on-490 iakh33000=Ra1485 Volume variance 2500 tonne )( 1485= RsS7 lakhs (A)

8 Fixed Overhead Variance _ 300-260-40 lakhs (FI

Reason tor drop In profit

RLin lakh Favourable Adverse

37 183

1 Contribution Fall because of PrOdllction 2 Sale price

1793 Ra Matltlrial Price 97

4 Ravv Material Yield as5 PONer RatfIJ Vtlriance 546 POWBr Consumption

1917 Other Variable Cots Saving 408 Fixed Over Head VariallCCS

----~-231

Net drop in profit

PKSIKDARS ADVANCE LEARNING 23 C EKDALIA PLACE

KOLKATA - 700019 M 98301 65501

Web wwwpksalcom aubullbullI 18

Alpha PhDtma ltd u bullbullbull tYo Ingredients P and 0 for productlon or formulatlo( X In the ratio

of 23 P j procured ntJrey from (ilgenOya sources Wh4iiloF88S 50 Of Q is ttTlportlt6ld The ratio of ifTlporta and Indigenous SOUfC_ is rnntalno throughout 1he year The inputoutput ratiO of ra matetla to fintshed goods Is 09 Dunng the veer 200$ - oe the co~ny produced 270 tonne of tintahad produot of X and the COnIH5)tlOr of raw nlstEtrtahl was bullbull 1oUows~ P _ 121500 kge 0 Ra360 p kg

a _ 78400 kg at en eerag_ ooat 0 Fla220 per kg Ourfng the yar tn cornpeny imported 90000 kg_ of a and tne brek up of landed cost was

II fQlIOWS Ra 16643000elF value Rs 16153600hTport Outy

Clering amp f=orwarding Charges Ra 1041$000

Re 21651eoolendad Coat How will you preent ~h above Information in the manner prbullbullcrlbed In Paras 5A 5e and 6 01 the Annexure to the Coat Audit Report

AnNor 270000 kg

Total PrQductlon Tneoretlaal eonsumpdon of Raw Materlbullbullbull in tnbull tJo of 10~ - 27000009 300000 kgs

copoaed of Aew Matarl po 215m 120000 Iltgs

Raw Meter Q - 35 160000 1lt0

Actuat consumption P 121500 Iltgs

Q 178400 kg

Nonnamp of conaumpttona fa - 120000270000 044$44

Q _ 1800001270000 0eS8r

Actual consumption rate P = 121500270000 045

Q 17a~AOO270000 0ee07

tmQQlaquo1ttd matmj0r

Aotue quantity ot tfrlported mater Q oonufTted

Total value o~ a consultelt 1 7e400 kg x Ra220 per KO shy 89200 R bull3924S000

kgs

lbullbull8 Value 00 Irnportad rnawlal courTlecl 85gt200 kg R 216$1eoO~OOO Ba a 11 ~g g~g

valu Of IndlgenOu tIl __nl Q conaumed (Sg200 kgs) R bull 17887970 ost pr e t lncl__ a Q Aa200e53 0 20064 Oot pr kg of In-pcrtect __1 Q 216e1eOOOoOOO Ra23946

The abOve deta wi1i be prnted In the Anne)(lre 0 Cost AucUt Rpoft bullbull foUON

para otA)

MAJOR INPUT MATIIIRlALS CONUMIII Partlculera CurritVbullbullr TWo PVlo Vano

Qty (kg)

Raw (Rbullbull )

AnOunt (Rs In Isk)

Qt) (klil)

R_ (Ftbullbull )

Amount (R In 18kh)

1 Indgcnqya (8) p (b) Q

2 au mowrtZUDI

121GOO ae200

-_000 200_

-43740 17eea

- -- -- --3 meenedlt-) Q lSI zgg 239U auaQ - - -

ot14 2 bullbullggOO ea - - -paRI CUBl

TANDAROIACTUAL CONSUMPTION OF INPUT MATERIA PIR UNIT Prtlcu_ra Unit stanelrd Actual

CuntYer TWa PreviOus Ye 1 f Kg 04_4 04800 -2 Q Kg 0_7 0_07 -

BRIAK UP OF QOST OF INPUT MATERIAlS IMPORTED DURING THI VIIAR

Particulars

elF price CUSltom Duty

3 CIbullbullnng and Forwding 4 TotaJ landed Co

CutTnt Vear (Fts In 18khegt

18543

18_

1~ 21$82

ToNO Previous Vear (R in 18khe)

---

QUeet1on 19

~r~t~O~~~urebullbull)(tactd~r6m tn tlnanol1 and co~t accentountlng eo~chS you aro

(I) Value ltldeocl

(II) Ratio of Opetlng Proflt to Net Sales and

(W) Ratlo of OperaUng Profit to value added

Net Sales exctuding eXCise Duty

lnoreabullbull In stock of finished goods

E)(penabullbull

Raw MaterIals coneued Packng rnaterifs cansUrnoQd

Store and Spares consumed

Power and Fuel

Repairs and Mntenancea Insurance

Orect SaJaries and VVage-s

oPrechatton

tnterest paId

Factory Overhaeda

SOlaries end Wages

Others

Selling an~ Oistribution Overheads

Salaries and Wages

Additional Sales Tax

Others

Aaminlstratlon Overhaads

Salaries and Wages

Othors

Re In fakha

21000

2150

2600

1200 seo

4800 200 120 4150

8~ 1398

240

250

120 457

1700

120

80

PXSIKDARS ADVANCE LEARNING 23 C EKDALIA PLACE

KOLKATA-700019 M 98301 65501

Web wwwpksalcom - 12 shyA$Ivvar

Ra tn lakhs

Leee Rs In Jakhamp

21250

Coot of bp ght put ggQ-CJs_~nsf srylces REt Meltriee 2$00 Ft-eking MatarlQs 1200 Sto and Spar_ 5eO Po r and Fuel 4600 Ftc-pairs and MdllntenancfOt 200 insuranCCII 120 Othr Factory OVQrtuad 250 Othor Set lin and Dis1rbtltion Overhead 1700 Other AdminIstratIon O erhead ------Sl2 11 3 0ValuAdded

~li~l2 QRpratnp PrqttlProfit beforfJ fax 6240tote-rest 139a

7638

O Rettlo Of opor~ting prcgtfit to net sal$

ltII) Ratio 01 o-erattng pngtflt to value GAdded _ ~~ -lt 100 7$8400

Note

AS per CARR operating profIt

Profit rrUiilana opratino profit after provIding for depreciation ana eH othear titxpenes except interest 01 borrowings 2nchJdng debentures btJt before provfding for taxes on Incornel

Vaus Addition meantS the dffferen~ between the nat output valueNet Sales adjueUiJd for WorK-ln~ ~~~r-r~e~~c~Iehed GoOds atoCk) and cost of bought out rnaterlalaand servIces for the produCt

Question 20 Bawod on the foUowing infolmltlon~ in r~peCf of a ~on4ern manufacuJrttlg lement you ~ue rc quilf)d to offer your comnOnlJi~ R) n Co~( Audilrn on (i) the perfor1nonce of the coc~rn bull (H) your aUiogthn~ for lnlprC)vemcnt

Given Rotelt Cpucly ~O MTHr Z1llJ ZQQ2

( I ) Bmiddotkdovvn(Hrs) 2164 1()()9

(2) Planned maintcnance (Hr~) 246 420 (3) Power rec ictionb(Hr1O) 1230 1471 (4) Shonfnll (th~ are no orders) (Hr~) 787 673 (5) -Wont of wagons(Hrs) 492 631 (6) To1 stoTlge(Hrs) 49i9 4205 (7) Th running (Hr) 3865 45sS (8) tOto Qvailable Houn i7i4 i760

Production ltluring to yenr (MT) 247360 327960 Hlturly Rnte nfPrnduc1inn (MT) 64 72 CapAcity Uti1iralittn () 6184 8199 Annual tnstalled Capacity 400OOOMT

Answer iJ Perftlrmancc or the concern

Rated CpacilY 80 MTlHr Rtlled Capllcity uchieved In2002 =72180) bull I UO 90f Raled cllJlUity uchievcd in 2003 =(64180) x I ()()=lO

Thu the pacly achievement a of the Rilled capacity has cotTle down from 90Jlt 110 in 2003

ii) Further th capacity ulilizutinn h ~ 1I0ne down (0 618410 In2003 as against Ihe figure of II 19911gtn Z002 iebull dwon hy 2015

Iii) From the dillU Ilvllilnolc the following obf arc ruled a) Breakdown howgt hav June up [r(lm 1009 H to 2164 Hr~

b) Planned minlcnance H h reduced from 420 H (0246 Hrs

I Shortfall H duc to No of ordc h inascd from 673 HIli to 787 HIS

dl The loml lopp~ge Hrs hru ncreused from 4205 Hrs 104919 Hrs

l The tOlnl rannin Hrs h come down tn 4515Hrs 10 3865 Hr

) The prod tion hus come down fmm 327960 M1 IOZ 47360 MT Frorn tht ullovc fiolHng tl i5JIu4Ccrtainoo that the under tJtiHzation or CQpacilY to Ihe extentof

20M Ciln be attributed mllinty tu the

u1Ld Io(w lUWill Hrs_ of 4i19 in ]003 ~$ upounduin the filure of 420~ Hrs in 2002 Ii) the net jncroawtS or 714 Hrs ltLe 41gt 19 - 4205 Hn~) it nitn due lhe incnuuc of btcnk down l-Io rs

by l 153 Hn (ic2164 - 1009 Mrs) in the year 2003vor the y~Qr 2002 Further frorn Ihe gtVC-1t clotl~ t is noted tht shy

Breakdown (Hn ) 2164 1009 Torut ~toppJgc (Hnbull ) 4919 42Q5

PrClrltagc of hreakdown Hjmiddots

a of lOLUl torpaKc Hr (21644919) x ()O ( I ()09420S) 00

gt 44ff 24 rff

Thu the plt~rfOIITlaIHmiddot_e hL OCICr1nnlICd Shcply In the y~ar 200~ al-gt cotnparcd 10 the pcrtonuan(e i ~hc yeAr 2002

Joe management i~ at1v~cd 1()

0) Augment its planned maintenance witha ie to reducing bnkaowu nouls

(it) fn-tali PCwcr OcncrHH1n Sllo wih u vilv to ornl)cf1HC he hutus lost due [0 Povcr restrlcOon

Quesllon 21 From the- ollowing figUf05 ltpxtrzctthi from the Cost Accountng Records Of a company calCulate tte Value Addition and its Ratio as a percentage of sales and also show how the value added is distributed to the different claimc1ot lhereto