Doli Gupta (ca) (89 Points)
13 November 2010is it the answer is correct in rtp of cost ??????
the Q. no. is 1(iv) in my opinion the correct answer is 5700.... n in it rtp 5580 is given???
and in Q. no. 6 why they ve nt allocated the direct wages in service department???
plz rply as soon as possible........
Sarabjit Singh Muddar
(Student ca final)
(216 Points)
Replied 13 November 2010
Q1 (vi) :
actual qty used = 5640kgs
standard cost =rs. 23124
hence, rate = 23124/5640 = 4.1 per kg
it is given that material usage variance is 246 adverse ( negative) ie 246 is the additonal cost incured
in material terms : 246/4.1 = 60 kgs excess materials have been used
hence,standard quantity = actual quantity used - excess quantuty used = 5640-60 = 5580 kgs
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Q6 :
In the question the direct wages are not forming part of the item of cost whereas
the direct wages information are provided only for the pupose of allocation of indirect wages.
hence it is not allocated , not only the service dept. but it is also not provided at the time of computation of rate per production hour.
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hope my explanation is useful to u....tc
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