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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

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