Solved Questions: Budgetary Control | Cost Accounting - B Com PDF Download

Flexible Budget

Q1: Prepare a Flexible budget for overheads on the basis of the following data. Ascerta in the overhead rates at 50% and 60% capacity

Sol:

Flexible Budget

Working Note

Repairs

Q2: Prepare a flexible budget for overheads on the basis of the following data. Ascertain the overhead rates at 60% and 70% capacity.

Sol:

For 60% capacity Fixed 80/100 * 3,000 = Rs.2400

Variable = 20/100 * 3,000 = Rs. 600

=Rs. 2400 + Rs.600 =Rs.3,000

Electricity Exp

Flexible Budget

Q3: The expenses budgeted for production of 1,000 units in a factory are furnished below:

Prepare a budget for production of 600 units and 800 units assuming administrative expenses are rigid for all level of production.

Sol:

Flexible Budget

Q4: The budgeted output of a industry specializing in the production of a one product at the optimum capacity of 6,400 units per annum amounts to Rs. 1,76,048 as detailed below:

The company decides to have a flexible budget with a production target of 3,200 and 4,800 units (the actual quantity proposed to be produced being left to a later date before commencement of the budget period)

Prepare a flexible budget for production levels of 50% and 75%. Assuming, selling price per unit is maintained at Rs. 40 as at present, indicate the effect on net profit.

Administrative , selling and distribution expenses continue at Rs.3,600.

Sol: 

Flexible Budget

Q5:  A factory engaged in manufacturing plastic buckets is working at 40% capacity and produces 10,000 buckets per month.

The present cost break up for one bucket is as under:
Materials
Rs.10 Labour

Rs.3
Overheads Rs.5 (60% fixed)

The selling price is Rs.20 per bucket. If it is desired to work the factory at 50% capacity the selling price falls by 3%. At 90% capacity the selling price falls by 5% accompanied by a similar fall in the price of material.

You are required to prepare a statement the profit at 50% and 90% capacities and also calculate the break‐ even points at this capacity production

Sol: 

Flexible Budget