Alpha Manufacturing Company manufactures a product. The following is the information provided by them for the year ended March 31, 2017. Particulars Quantity (units) | Average Rate Opening Stock of Raw Materials Purchases during the year Closing Stock of Raw Materials The company follows weighted average stock method for valuation of inventory. But it does not maintain detailed stock register. The Input-output ratio of the company is 1:1. All the units produced during the year were sold. 5,000 65,000 6.10 6.80 10,000 ? Other details are : 1. Direct wages for the year amounted to Rs. 1,26,000. 2. Factory overheads (Rs. 14,100 are fixed) incurred for the year were Rs. 74,100. 3. The cost accountant says that the Cost of Production had amounted to Rs. 7,20,000 and total selling overheads were Rs. 1,80,000. 4. The company's sales for the year were Rs. 10,00,000. The Company wants you to prepare an estimated cost sheet for the year ended March 31, 2018 based on the following additional information; 1. The company expects to increase production by 16 2/3% and expects that there will be a closing stock of 5,000 units. 2. The raw materials cost per unit can be utilised by rounding off upto two decimal points. 3. There is no change in Direct wages. 4. The office Manager has asked for an increase in pay by Rs. 2,600 p.a. 5. The variable factory overheads as expected to rise by 20%. 6. Selling expenses per unit has gone up by 20 paise. 7. The company wants to maintain the rate of profit on sales as the previous year. Working notes form a part of the answer. Please show working notes wherever necessary.
Alpha Manufacturing Company manufactures a product. The following is the information provided by them for the year ended March 31, 2017. Particulars Quantity (units) | Average Rate Opening Stock of Raw Materials Purchases during the year Closing Stock of Raw Materials The company follows weighted average stock method for valuation of inventory. But it does not maintain detailed stock register. The Input-output ratio of the company is 1:1. All the units produced during the year were sold. 5,000 65,000 6.10 6.80 10,000 ? Other details are : 1. Direct wages for the year amounted to Rs. 1,26,000. 2. Factory overheads (Rs. 14,100 are fixed) incurred for the year were Rs. 74,100. 3. The cost accountant says that the Cost of Production had amounted to Rs. 7,20,000 and total selling overheads were Rs. 1,80,000. 4. The company's sales for the year were Rs. 10,00,000. The Company wants you to prepare an estimated cost sheet for the year ended March 31, 2018 based on the following additional information; 1. The company expects to increase production by 16 2/3% and expects that there will be a closing stock of 5,000 units. 2. The raw materials cost per unit can be utilised by rounding off upto two decimal points. 3. There is no change in Direct wages. 4. The office Manager has asked for an increase in pay by Rs. 2,600 p.a. 5. The variable factory overheads as expected to rise by 20%. 6. Selling expenses per unit has gone up by 20 paise. 7. The company wants to maintain the rate of profit on sales as the previous year. Working notes form a part of the answer. Please show working notes wherever necessary.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Alpha Manufacturing Company manufactures a product. The following is the information provided
by them for the year ended March 31, 2017.
Particulars
Quantity (units) Average Rate
Opening Stock of Raw Materials
Purchases during the year
Closing Stock of Raw Materials
The company follows weighted average stock method for valuation of inventory. But it does not
5,000
6.10
65,000
6.80
10,000
?
maintain detailed stock register. The Input-output ratio of the company is 1:1. All the units produced
during the year were sold.
Other details are :
1. Direct wages for the year amounted to Rs. 1,26,000.
2. Factory overheads (Rs. 14,100 are fixed) incurred for the year were Rs. 74,100.
3. The cost accountant says that the Cost of Production had amounted to Rs. 7,20,000 and
total selling overheads were Rs. 1,80,000.
4. The company's sales for the year were Rs. 10,00,000.
The Company wants you to prepare an estimated cost sheet for the year ended March 31, 2018
based on the following additional information:
1. The company expects to increase production by 16 2/3% and expects that there will be a
closing stock of 5.000 units.
2. The raw materials cost per unit can be utilised by rounding off upto two decimal points.
3. There is no change in Direct wages.
4. The office Manager has asked for an increase in pay by Rs. 2,600 p.a.
5. The variable factory overheads as expected to rise by 20%.
6. Selling expenses per unit has gone up by 20 paise.
7. The company wants to maintain the rate of profit on sales as the previous year.
Working notes form a part of the answer. Please show working notes wherever necessary.
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