COST ACCOUNTING – CA INTER – SOLUTION

Q.1. Statement showing cost per tonne per mile

Particulars Rs.
Maintenance Cost (WN1) 13,500
Driver’s wages (150 X 5 drivers X 50 weeks) 37,500
Supervisor’s wages (200 X 1 supervisor X 50 weeks) 10,000
Depreciation
Loading Equipment (1,00,000 – 0) ÷ 5 years 20,000
Vehicles (30,000 – 0) ÷ 5 years X 5 vehicles 30,000
Petrol Cost (1,70,000 miles X 0.3) 51,000
Repairs Cost (1,70,000 miles X 0.075) 12,750
Vehicles Insurance Cost (400 X 5 vehicles) 2,000
Insurance Costs 600
Tyres Cost 3,000
Miscellaneous Cost 2,250
Total Cost 1,82,600
÷ Tonne Miles (WN2)
4,20,000
Cost per tonne per mile 0.4347

WN1: Miles
Vehicles
1 6 trips X 2 (return) X 5 days X 50 weeks X 10 miles 30,000
2 4 trips X 2 (return) X 5 days X 50 weeks X 20 miles 40,000
3 2 trips X 2 (return) X 5 days X 50 weeks X 40 miles 40,000
4 2 trips X 2 (return) X 5 days X 50 weeks X 30 miles 30,000
5 1 trip X 2 (return) X 5 days X 50 weeks X 60 miles 30,000
1,70,000

WN2: Tonne Miles

Vehicles
1 6 trips X 5 days X 50 weeks X 4 tonnes X 10 miles 60,000
2 4 trips X 5 days X 50 weeks X 4 tonnes X 20 miles 80,000
3 2 trips X 5 days X 50 weeks X 5 tonnes X 40 miles 1,00,000
4 2 trips X 5 days X 50 weeks X 6 tonnes X 30 miles 90,000
5 1 trip X 5 days X 50 weeks X 6 tonnes X 60 miles 90,000
4,20,000

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 COST ACCOUNTING – CA INTER – SOLUTION
Q.2. (a) Statement showing Total Cost for 4 weeks
Particulars Rs.
Petrol Cost (WN3) 28,800
Oil (100 X 4 weeks) 400
Drivers Wages (400 X 1 driver X 4 weeks) 1,600
Repairs (100 X 4 weeks) 400
Garage Rent (100 X 4 weeks) 400
Depreciation (WN4) 16,800
Insurance (6,500 X 4 weeks ÷ 52 weeks) 500
Vehicles License Cost (1,300 X 4 weeks ÷ 52 weeks) 100
Other Overheads Cost (41,600 X 4 weeks ÷ 52 weeks) 3,200
Total Cost 52,200

(b)
Cost per km Total Cost
Kms

= 52,200
3,200

= 16.3125
Cost per tonne per km Total Cost
Tonne Kms

= 52,200
16,000

= 3.2625

WN1: Kms
= 2 trips X 2 (return) X 5 days X 4 weeks X 40 kms
= 3,200 kms

WN2: Tonne Kms

= 2 trips X 5 days X 4 weeks X 10 tonnes X 40 kms
= 16,000

WN3: Petrol Cost

8 kms 72
3,200 kms ?
28,800

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 COST ACCOUNTING – CA INTER – SOLUTION

WN4: Depreciation
Depreciation Original Cost – Scrap Value
Estimated Life
Lorry = 4,50,000 – 50,000
80,000 kms
= 5 per km X 3,200 kms
= 16,000
Tyres = 6,250 – 0
25,000 kms
= 0.25 per km X 3,200 kms
= 800
Total Depreciation 16,800

Q.3. (a) Statement showing Cost per tonne per km

Particulars Rs.
Depreciation (90,000 – 0) ÷ 10 years 9,000
Diesel, Oil, Grease (1 Trip X 2 (return) X 25 days X 12 months X Rs. 15) 9,000
Repairs and Maintenance (500 X 12 months) 6,000
Drivers Wages (500 X 12 months) 6,000
Cleaners Wages (250 X 12 months) 3,000
Insurance 4,800
Tax 2,400
General Supervision Charges 4,800
Total Cost 45,000
÷ Tonne kms (WN1) 90,000
Cost per tonne per km 0.50

WN1: Tonne kms

Outward Trip
= 1 Trip X 25 days X 12 months X (5 tonnes X 100%) X 50 kms = 75,000

Return Trip
= 1 Trip X 25 days X 12 months X (5 tonnes X 20%) X 50 kms = 15,000

Total = 90,000

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 COST ACCOUNTING – CA INTER – SOLUTION
(b)
Cost per tonne per km 50 0.50
Add: Profit per tonne per km 50 0.50
Freight per tonne per km 100 1

Freight per tonne per trip

= 1 X 1 tonne X 50 kms
= 50

Freight per tonne per round trip (journey)

= 1 X 1 tonne X 100 kms
= 100

Q.4.

40 minutes 40 minutes

12 miles
FACTORY INDIAN OIL
60 minutes (WN1)

12 miles

40 minutes 30 minutes

8 miles
FACTORY BHARAT
40 minutes (WN1) PETROLEUM

8 miles

WN1: Travelling Time WN2: Fixed Costs

INDIAN OIL INDIAN OIL
24 miles 60 mints 60 mints Rs. 7.5
24 miles ? 140 mints ?
60 mints Rs. 17.5

BHARAT PETROLEUM BHARAT PETROLEUM

24 miles 60 mints 60 mints Rs. 7.5
16 miles ? 110 mints ?
40 mints Rs. 13.75

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 COST ACCOUNTING – CA INTER – SOLUTION

Statement showing cost per tonne per mile

Particulars Indian Oil Bharat Petroleum
Variable Cost 14.4 9.6
(24 miles X 0.6) (16 miles X 0.6)

Fixed Cost (WN2) 17.5 13.75

Total Cost 31.9 23.35
÷ Tonne miles 60 40
(5 tonnes X 12 miles) (5 tonnes X 8 miles)
Cost per tonne per mile 0.5316 0.5837

Q.5. In this question, we are asked to calculate cost of one taxi per km. So instead of dividing each
cost by 10 taxis, we will calculate total cost of 10 taxis and divide the same by kms of 10 taxis to
calculate cost of one taxi per km.

(a) Statement showing cost per km for one taxi

Particulars Rs.
Depreciation (WN2) 96,000
Salary
Office Staff (1,500 X 12m) 18,000
Garage Staff (2,000 X 12m) 24,000
Garage Rent (1,000 X 12m) 12,000
Driver’s Salary (2,800 X 12m X 10 taxis) 3,36,000
Road Tax and Repairs (2,160 X 10 taxis) 21,600
Insurance Cost (75,000 X 10 taxis X 4%) 30,000
Petrol Cost (WN3) 39,46,667
Oil & Other Sundry Expenses (WN4) 1,44,000
Total Cost 46,28,267
÷ kms (4,80,000 kms – 20%) 3,84,000
Cost per km 12.0527

(b) Statement showing Profit for the first year

Hire Charge per km 15.8
Less: Cost per km (12.0527)
Profit per km 3.7473
X kms 3,84,000
Total Profit 14,38,963

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 COST ACCOUNTING – CA INTER – SOLUTION
WN1: Kms
= 4,000 kms X 12 months X 10 taxis
= 4,80,000 kms

WN2: Depreciation
Depreciation = 75,000 – 15,000
3,00,000 kms

= 0.2 per km X 4,80,000 kms

= 96,000

WN3: Petrol Cost

9 kms Rs. 74
4,80,000 kms ?
39,46,667

WN4: Oil & Other sundry expenses

100 kms Rs. 30
4,80,000 kms ?
1,44,000

Q.6. Statement showing Total takings and fare per passenger per km
Particulars Rs.
Depreciation (1,00,000 – 0) ÷ 5 years 20,000
Insurance (1,00,000 X 3%) 3,000
Road Tax 2,000
Garage Rent (400 X 12m) 4,800
Repairs 2,360
Drivers Salary (600 X 12m) 7,200
Conductors Salary (200 X 12m) 2,400
Managers Salary (1,400 X 12m) 16,800
Stationery (100 X 12m) 1,200
Petrol and Oil (WN3) 1,80,000
Total Cost (excluding commission) 75 2,39,760
Add: Commission 10 31,968
Total Cost (including commission) 85 2,71,728
Add: Profit 15 47,952
Takings 100 3,19,680
÷ Passenger Kms (WN2) 14,40,000
Fare per passenger per km 0.222

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 COST ACCOUNTING – CA INTER – SOLUTION
Fare per passenger per trip
= 0.222 X 1 passenger X 20 kms
= 4.44

Fare per passenger per round trip (journey)

= 0.222 X 1 passenger X 40 kms
= 8.88

WN1: Kms
= 3 trips X 2 (return) X 25 days X 12 months X 20 kms
= 36,000 kms

WN2: Passenger Kms

= 3 trips X 2 (return) X 25 days X 12 months X 40 passengers X 20 kms
= 14,40,000

WN3: Petrol & Oil

100 kms Rs. 500
36,000 kms ?
1,80,000

Q.7. Statement showing Total takings and fare per passenger per km
Particulars Rs.
Depreciation (1,00,000 – 10,000) ÷ 5 years 18,000
Insurance 4,000
Road Tax 2,000
Garage Rent 1,200
Repairs & Maintenance 6,000
Replacement of tyre and tube (480 X 12m) 5,760
Office Expenses (600 X 12m) 7,200
Petrol and Oil (WN3) 5,76,000
Drivers Salary (500 X 2 X 12m) 12,000
Conductors Salary (350 X 2 X 12m) 8,400
Interest 6,720
Total Cost (excluding commission) 76 6,47,280
Add: Commission 5 42,584
Total Cost (including commission) 81 6,89,864
Add: Profit (100 – 5) X 20% 19 1,61,820
Takings 100 8,51,684
÷ Passenger Kms (WN2) 17,28,000
Fare per passenger per km 0.4928
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 COST ACCOUNTING – CA INTER – SOLUTION
Fare per passenger per trip
= 0.4928 X 1 passenger X 20 kms
= 9.856
Fare per passenger per round trip (journey)
= 0.4928 X 1 passenger X 40 kms
= 19.712

WN1: Kms
= 6 trips X 2 (return) X 25 days X 12 months X 20 kms
= 72,000 kms

WN2: Passenger Kms

= 6 trips X 2 (return) X 25 days X 12 months X 24 passengers X 20 kms
= 17,28,000

WN3: Petrol & Oil

1 kms Rs. 8
72,000 kms ?
5,76,000

Q.8.(a) Statement showing net operating income per flight

Particulars Rs.
Revenue (96 passengers X 7,200) 6,91,200

Less: Total Cost

Fuel Cost (96,000)
Food Cost (96 passengers X 125) (12,000)
Commission (6,91,200 X 5%) (34,560)
Aircraft Lease (3,50,000)
Landing Charges (72,000)
Net Income 1,26,640

(b) Statement showing net operating income per flight

Particulars Rs.
Revenue (108 passengers X 6,720) 7,25,760

Less: Total Cost

Fuel Cost (96,000)
Food Cost (108 passengers X 125) (13,500)
Commission (7,25,760 X 5%) (36,288)
Aircraft Lease (3,50,000)
Landing Charges (72,000)
Net Income 1,57,972
Since, net operating income is increasing, the proposal should be implemented.

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 COST ACCOUNTING – CA INTER – SOLUTION
Q.9. Statement showing price of the package
Particulars Rs.
Diesel Cost (WN2) 2,635
Chauffeur’s salary (12,000 X 3 days ÷ 30 days) 1,200
Depreciation (WN3) 377
Servicing Cost (WN4) 452
Chauffeur’s meal allowance (WN5) 150
Other set up and office cost(2,400 X 3 days ÷ 30 days) 240
Total Cost 75 5054
Add: Profit 25 1,685
Takings 100 6,739

WN1: Kms
Delhi to Jaipur = 274 kms
Jaipur to Agra = 238 kms
Agra to Delhi = 242 kms

Total kms = 754

WN2: Diesel Cost

Delhi to Jaipur
16 kms Rs. 54
274 kms ?
925

Jaipur to Agra
16 kms Rs. 56
238 kms ?
833

Agra to Delhi
16 kms Rs. 58
242 kms ?
877

Total 2,635

WN3: Depreciation
Depreciation = 12,00,000 – 0
24,00,000 kms

= 0.5 per km X 754 kms

= 377

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 COST ACCOUNTING – CA INTER – SOLUTION

WN4: Servicing Cost

50,000 kms Rs. 30,000
754 kms ?
452

WN5: Chauffeur’s meal allowance

754 kms 3 Completed Journeys of 200 kms 3 times X 50 = 150

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 COST ACCOUNTING – CA INTER – SOLUTION
Q.10. (a) Statement showing Cost per km (10,000 kms)
Particulars New small car Old bigger car
Depreciation 12,800 6,400
(1,40,000 – 76,000) ÷ 5 years (80,000 – 48,000) ÷ 5 years
Repair and servicing 4,000 4,800
Taxes and Insurance 6,800 2,800
Petrol (WN1) 14,000 20,000
Total Cost 37,600 34,000
÷ kms 10,000 10,000
Cost per km 3.76 3.40

At 10000 kms, Old Bigger Car is the best option.

WN1: Petrol Cost

New Small Car
10 kms Rs.14
10,000 kms ?
14,000

Old bigger car

7 kms Rs. 14
10,000 kms ?
20,000

(b) Statement showing Cost per km (19,000 kms)

Particulars New small car Old bigger car
Depreciation 12,800 6,400
(1,40,000 – 76,000) ÷ 5 years (80,000 – 48,000) ÷ 5 years
Repair and servicing 4,000 4,800
Taxes and Insurance 6,800 2,800
Petrol (WN2) 26,600 38,000
Total Cost 50,200 52,000
÷ kms 19,000 19,000
Cost per km 2.6421 2.7368

At 19000 kms, New Small Car is the best option.

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 COST ACCOUNTING – CA INTER – SOLUTION
WN2: Petrol Cost
New Small Car
10 kms Rs. 14
19,000 kms ?
26,600

Old bigger car

7 kms Rs. 14
19,000 kms ?
38,000

(c) Indifference Point / Cost Break Even Point

It is that point at which cost of two alternatives becomes equal. This point arises because if in one
alternative variable cost is less than in other alternative fixed cost is less and vice versa.

Fixed Cost
NSC 23,600
OBC 14,000

Variable Cost per km

NSC 1.4 (14 ÷ 10 kms)
OBC 2 (14 ÷ 7 kms)

Let total kms at which total cost of two cars becomes equal be x

At x kms,

Total Cost of NSC = Total Cost of OBC

Fixed Cost + Variable Cost = Fixed Cost + Variable Cost

23,600 + 1.4x = 14,000 + 2x

9,600 = 0.6x

X = 16,000 kms

If level of activity is higher than Indifference Point (16,000 kms)

Select the car in which variable cost is less (New Small Car)

If level of activity is lower than Indifference Point (16,000 kms)

Select the car in which fixed cost is less (Old Bigger Car)

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 COST ACCOUNTING – CA INTER – SOLUTION
Q.11.

Statement showing Project Cost per day of concession period

Particulars Rs.
Site clearance 1,70,70,000
Land Development & Filing work 90,80,35,000
Sub base & base courses 102,60,70,000
Bituminous work 350,70,80,000
Bridge, Flyovers, underpasses, Pedestrian subway, footbridge etc 290,55,60,000
Drainage & Protection work 90,40,50,000
Traffic sign, marking & road appurtenance 84,05,00,000
Maintenance, Repairing & Rehabilitation 124,29,60,000
Environmental management 9,82,00,000
Administration and Toll Plaza Operation Cost 11,20,00,000
Total Project Cost 1156,15,25,000
÷ Days of concession period (25 years X 365 days) 9125
Project Cost per day 12,67,016

Statement showing Toll Collections per day

Particulars Rs.
Project Cost per day 12,67,016
Add: Profit per day (15%) 1,90,052
Toll Collections per day 14,57,068

Let toll collection per day from one two wheeler vehicle be x
Therefore, toll collection per day from one Car & SUV = 4x
Therefore, toll collection per day from one Bus & LCV = 6x
Therefore, toll collection per day from one Heavy Commercial Vehicle = 9x

Collection from:
Two wheelers + Car & SUVS + Bus & LCVs + Heavy Commercial Vehicles = Toll Collections
(44,500 X x) + (3450 X 4x) + (1800 X 6x) + (816 X 9x) = 14,57,068
76,444x = 14,57,068
x = 19.0605
4x = 76.2423
6x = 114.3635
9x = 171.5453

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 COST ACCOUNTING – CA INTER – SOLUTION
Therefore, toll collection per day from one Car & SUV = 4x
Q.12. Statement showing Collections for Hotel Taj, Mumbai
Particulars Rs.
Depreciation 15,00,000
Salaries 25,00,000
Transportation 1,50,000
Laundry Charges 4,00,000
Bed Sheets etc 2,50,000
Municipal Taxes, rates 6,00,000
Lighting (WN3) 18,12,000
Salary of Room Attendant (WN4) 31,98,000
Light Refreshment (WN5) 34,38,000
Other Expenses (WN6) 19,65,000
Head Office Expenses (20,00,000 X 10%) 2,00,000
Total Cost 100 1,60,13,000
Add: Profit 25 40,03,250
Takings 125 2,00,16,250

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 COST ACCOUNTING – CA INTER – SOLUTION
(b) (i) Let rent of one ordinary room per day in all seasons be = x
Rent of one deluxe room per day in all seasons = 2x
Rent of one aristocrat room per day in all seasons = 3x

OR Collection + DR Collection + AR Collection = Hotel Collection

(43,200x) + (22,800 X 2x) + (12,600 X 3x) = 2,00,16,250
1,26,600x = 2,00,16,250
x = 158.1062
2x = 316.2124
3x = 474.3186

(ii) Let rent of one ordinary room per day in all seasons be = x
Rent of one deluxe room per day in all seasons = 3x
Rent of one aristocrat room per day
Summer = 3.5x
Winter = 5x
Monsoon = 8x

OR Collection + DR Collection + AR Collection = Hotel Collection

(43,200x) + (22,800 X 3x) + [ (7,200 X 3.5x) + (3,600 X 5x) + (1,800 X 8x) = 2,00,16,250
1,69,200x = 2,00,16,250
x = 118.2993
3x = 354.8979
3.5x = 414.0475
5x = 591.4965
8x = 946.3944

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 COST ACCOUNTING – CA INTER – SOLUTION
WN1: Number of Rooms
Number of rooms will be calculated from the information of summer season.
Ordinary = 150 rooms

Deluxe
90% 90 rooms
100 % ?
100 rooms
Aristocrat
80% 60 rooms
100% ?
75 rooms
WN2: Room days
Particulars Ordinary Deluxe Aristocrat Total
(150 rooms) (100 rooms) (75 rooms)

Summer 150 X 120 X 100% 100 X 120 X 90% 75 X 120 X 80% 36,000
(120 days) = 18,000 = 10,800 =7,200

Winter 150 X 120 X 80% 100 X 120 X 60% 75 X 120 X 40% 25,200
(120 days) = 14,400 = 7,200 =3,600

Monsoon 150 X 120 X 60% 100 X 120 X 40% 75 X 120 X 20% 17,400
(120 days) = 10,800 = 4,800 = 1,800

Total 43,200 22,800 12,600 78,600

WN3: Lighting
Ordinary 43,200 X 20 8,64,000
Deluxe 22,800 X 25 5,70,000
Aristocrat 12,600 X 30 3,78,000
Total 18,12,000
WN4: Salary of room attendant
Summer Ordinary = 18,000 X 40 7,20,000
Deluxe = 10,800 X 50 5,40,000
Aristocrat = 7,200 X 60 4,32,000
Winter Ordinary = 14,400 X 30 4,32,000
Deluxe = 7,200 X 40 2,88,000
Aristocrat = 3,600 X 50 1,80,000
Monsoon Ordinary = 10,800 X 30 3,24,000
Deluxe = 4,800 X 40 1,92,000
Aristocrat = 1,800 X 50 90,000
Total 31,98,000

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 COST ACCOUNTING – CA INTER – SOLUTION
WN5: Light Refreshment
Summer 36,000 X 35 12,60,000
Winter 25,200 X 45 11,34,000
Monsoon 17,400 X 60 10,44,000
Total 34,38,000

WN6: Other Expenses

78,600 X 25 = 19,65,000

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 COST ACCOUNTING – CA INTER – SOLUTION
Q.13. Statement showing collections for Ramada International Hotel
Particulars Rs.
Building Repairs 12,60,000
Furniture Repairs 3,75,000
Permanent Staff Salary 24,75,000
Food Expense 3,81,000
Sundry Expenses 3,00,000
Depreciation
Building (5,00,00,000 X 5%) 25,00,000
Furniture (2,50,00,000 X 10%) 25,00,000
Salary of Temporary Staff (7,000 X 8m X 20) 11,20,000
Electricity Charges
Peak Season (12,000 units X 4.5) 54,000
Off Season (9,500 units X 3.5) 33,250
Total Cost 80 1,09,98,250
Add: Profit 20 27,49,563
Total Collections 100 1,37,47,813
÷ Room Days 19,000
Rent per room per day 723.5961

WN1: Room Days

Peak Season 100 rooms X 90% X (8m X 25 days) 18,000
Off Season 100 rooms X 10% X (4m X 25 days) 1,000
19,000

Q.14-. Statement showing Total Collections of the Hotel

Particulars Rs.
Variable Costs
Single Rooms (29,200 X 220) 64,24,000
Double Rooms (5,840 X 350) 20,44,000

Fixed Costs
Single Rooms (29,200 X 120) 35,04,000
Double Rooms (5,840 X 250) 14,60,000
Total Cost 80 1,34,32,000
Add: Profit 20 33,58,000
Total Collections 100 1,67,90,000

WN1: Room Days

Single Rooms 100 rooms X 80% X 365 days 29,200
Double Rooms 20 rooms X 80% X 365 days 5,840

Let rent of one single room per day be = x

Therefore, rent of one double per day = 1.25x

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 COST ACCOUNTING – CA INTER – SOLUTION
Single Room Collection + Double Room Collection = Hotel Collection
29,200x + (5,840 X 1.25) = 1,67,90,000

29,200x + 7,300x = 1,67,90,000

36,500x = 1,67,90,000

x = 460

1.25x = 575

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 COST ACCOUNTING – CA INTER – SOLUTION
Q.15. Statement showing Profit of 2020 for Roop Nagar Hospital
Particulars Rs. Rs.
Revenue (5000 patient days X 100) 5,00,000
Less: Total Cost
Rent (5,000 X 12m) 60,000
Salary
Supervisor (1,000 X 12m X 1) 12,000
Nurses (600 X 12m X 2) 14,400
Ward Boy (300 X 12m X 1) 3,600
Hire Charges of Bed 2,000
Doctor’s Fees (10,000 X 12m) 1,20,000
Repairs and Maintenance 14,450
Food supplied to patients 44,000
Monitor and other services for them 12,500
Laundry charges for their bed linen 28,000
Medicines supplied 73,500
General administration charges 49,550 (4,34,000)
Profit 66,000

Profit per patient per day = 66,000 ÷ 5,000 patient days = 13.2

WN1: Bed Days (Patient Days)

25 beds X 120 days X 100% = 3,000
25 beds X 80 days X 80% = 1,600
2,000 ÷ 5 = 400 (WN2)
Total = 5,000

WN2: Hire Charges for beds

Hire Charges per bed per day Hire Charges
Bed Days

5 = 2,000
Bed Days

Bed Days 400

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 COST ACCOUNTING – CA INTER – SOLUTION
Q.16.

(a) Statement showing cost of maintaining the library per year (excluding cost of new books)
Particulars Rs.
Cost of maintenance (50,000 books X 10) 5,00,000
Salary
Librarian (10,000 X 12m X 1) 1,20,000
Assistant Librarian (7,000 X 12m X 3) 2,52,000
Clerk (4,000 X 12m X 1) 48,000
Total Cost 9,20,000

(b) Cost incurred per library member per month

= 9,20,000 ÷ 1,000 members ÷ 12m
= 76.6666

(c) Statement showing Net Income per year (Excluding Cost of new books)
Particulars Rs.
Revenue
Library Fees (1,000 members X 100 X 12) 12,00,000
Fine (500 books X 5 days X 1 X 12m) 30,000
Total Revenue 12,30,000
Less: Total Cost (9,20,000)
Net Income 3,10,000

(i) Maximum no. of books that can be purchased

= 3,10,000 ÷ 300
= 1033.3333 books

(ii) Excess Books purchased = 1200 books – 1033.3333 = 166.6666 books

Comments on Subsidy Policy

Net Income of the library = 3,10,000
Cost of new books = 300 books X 1200 = 3,60,000

Therefore, Club has to give a subsidy of Rs. 50,000 which comes to Rs. 10 per member (50,000 ÷
5,000 members). The Policy of the club is to contribute Rs. 5 per member but now every
member has to contribute Rs. 5 extra as subsidy.

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 COST ACCOUNTING – CA INTER – SOLUTION
Q.17. (a) Statement showing cost per therm for March 2020
Particulars Rs.
Coal (1,400 quintals X 15) 21,000
Water (1,50,000 litres X 1) ÷ 1,000 litres 150
Freight and Handling of Coal (21,000 X 10%) 2,100
Ash Disposal 200
Repairs & Maintenance (2,000 X ½) 1,000
Stores (1,500 X 3/4) 1,125
Supervision & Admn Cost (2,500 X 3/5) 1,500
Wages & Salaries (50 X 150) 7,500
Depreciation (62,000 – 2,000) ÷ 10 years ÷ 12 months 500
Total Cost 35,075
÷ Therms 40,000
Cost per them 0.8768

(b) Statement showing cost per unit of electricity for March 2020
Particulars Rs.
Apportionment of steam production cost (35,075 X 4/5) 28,060
Repairs & Maintenance (2,000 X ½) 1,000
Stores (1,500 X 1/4) 375
Supervision & Admn Cost (2,500 X 2/5) 1,000
Wages & Salaries (10 X 300) 3,000
Depreciation (1,00,000 – 4,000) ÷ 10 years ÷ 12 months 800
Total Cost 34,235
÷ Units of electricity 3,00,000
Cost per unit 0.1141

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 COST ACCOUNTING – CA INTER – SOLUTION
Q.18. Statement showing Cost of Ignus Thermal Power Station
Particulars Rs.
Operating Labour 30,00,000

Repairs & Maintenance 10,00,000

Lubricants, spares & stores 8,00,000

Plant supervision 6,00,000

Administration overheads 40,00,000

Depreciation (5,00,00,000 X 5%) 25,00,000

Coal consumed (20,00,000 ÷ 5 = 4,00,000 kgs X 4.25) 17,00,000

Total Cost 1,36,00,000

÷ units of electricity 20,00,000
Cost per kwh 6.8

Q.19. Statement showing Project Cost Sheet

Particulars Rs.
Salary to Software Engineers 4,50,000
(15,00,000 X 3 ÷ 5 X 6 ÷ 12)

Salary to Project Leader 2,25,000

(9,00,000 X 1 ÷ 2 X 6 ÷ 12)

Salary to Project Manager 1,00,000

(6,00,000 X 2 ÷ 12)

Total Salary 7,75,000

Overheads (50% of Salary) (WN1) 3,87,500
Travel Expenses 1,87,500
Depreciation on Laptop 25,000
(50,000 X 2 X 6 ÷ 24)
Total Cost 13,75,000

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 COST ACCOUNTING – CA INTER – SOLUTION
WN1: Overheads
In Cost Accounting of IT Sector, overheads are absorbed by taking percentage of salary.
Absorption rate is calculated as follows:

Total Overheads 15,00,000

(Repairs + Administration overheads)

Total Salary 30,00,000

Absorption rate 50%

Q.20. Statement showing Cost of processing home loan application

Particulars Rs.
Loan Processor Salary 2,40,000

Overheads Apportionment (1,81,000 X 25%) 45,250

Total Processing Cost 2,85,250

÷ No. of Applications 500
Cost per home loan application 570.5

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