First Test Paper Solution : PC 302 : Elements of Business Management Q.2 (A) Apportion the overheads Considering Administration, based on number of people For sales / Purchase = (1/11) x 60000 = 5455 For foundry shop = (5/11) x 60000 = 27273 For Machine shop = (5/11) x 60,000 = 27273 New overheads Sales / Purchase = 15000 + 5455 = 20455 Foundry shop = 90,000 + 27273 = 1,17,273 Machine shop = 1,00,000 + 27,272 = 1,27,273 Sales / Purchase Department Apportionment For Foundry shop = (75000 / 1,55,000) x 20,455 = 9898 For Machine shop = (80,000 / 1,55,000) x 20455 = 10,557 Foundry shop Machine shop
Dept. Overheads 1,17,273 1,27,273
Sales/Purchase 9898 10557
Total 127171 137830 2,65,001
Absorption on Direct Material Cost: Material Rate = (80,000 / 1,37,830) = 0.5804 Total Cost = (Direct Material cost + OH based on DMC) + (Direct Labour cost) = [27+ (27x0.5804)] + 22 = Rs. 64.67 Q.2 (B) ASSETS
BALANCE SHEET Amount in Lacs
Fixed Assets Plant, Machines, Building Depreciation Net tangible assets Loan to xyz company TFA Current Assets Work in process Pending payment Cash in bank TCA
20 (-2) 18 05 23 08 03 11 22
LIABILITIES Long Term Liabilities Loan from bank Long term creditors LTL
12 05 17
Short Term Liabilities Payment to supplier Debenture sold STL
10 01 11
Capital & Surplus Provision for liabilities Profit and Loss Total 45
Amount in Lacs
02 15 17 45