Reference no: EM132899420
Questions -
Q1. From the following data prepare a statement of cost of goods manufactured and cost of goods sold of Popular Stoves Manufacturing Co. for the year 2011:
Rs.
Stock of materials on 1-1-2011 35,000
Stock of materials on 31-12-2011 4,900
Purchase of materials 52,500
Factory wages 95,000
Factory expenses 17,500
Office expenses 10,000
Completed stock in hand on 1-1-2011 Nil
Completed stock in hand on 31-12-2011 35,000
Sales 1,89,000
The number of stoves manufactured during the year 2011 was 4,000.
The company wants to quote for a contract for the supply of 1,000 Electric Stoves during the year 2012.
The stoves to be quoted are of uniform quality and make similar to those manufactured in the previous year; but cost of materials has increased by 15% and cost of factory labour by 10%.
Prepare a statement showing the price to be quoted to give the same percentage of net profit on turnover as was realized during the year 2011, assuming that the cost per unit of overhead charges will be the same as in the previous year.
Q2. Jones, an accountant for G.Ltd. has decided to estimate the fixed and variable components associated with the company's repair activity. She has collected the following data for the past six months:
Repair Hours Total Repair costs
10 Rs.800
20 1,100
15 900
12 900
18 1,050
25 1,250
a) Estimate the fixed and variable components for the repair costs using the high-low method. Using the cost formula, predict the total cost of repair if 14 hours are used.
b) Estimate the fixed and variable components using the method of least squares.