Final Examination

December-19
Cost and Management Audit

Section A(20 Marks)

1. Choose the correct option from amongst the four alternatives given, with
justification/workings. 1 mark will be for the correct choice and 1 mark will
be for the justifications /workings. 2x10=20

(i) SHYAN Ltd. has a machine of productive capacity of 1500 units per hour.
It runs 3 shifts with 1 weekly off and 12 holidays per year, each shift has
one stoppage due to lunch, change shift etc. Maintenance is done in
running time. The Normal capacity of the plant as per CAS-2 will be
(A) 131.40 Lakh units
(B) 94.815 lakh Units
(C) 108.36 Lakh Units
(D) None of the above

Answer: (b)94.815 lakh units.

Justification: - Normal Capacity = Installed Capacity – Internal factors

Installed capacity=365*8*3*1500=131.40 lakh units

Normal capacity= (365-52-12)*(8-1)*3*1500=94.815lakh units.

(ii) BORS & Co., a firm was appointed as Cost Auditor of PANTEX LTD. on
31/07/2018 for auditing the cost records for the FY 2018-19. The auditor appointed
as such shall continue in such capacity upto

(A) 31.07.2019, on expiry of one year of appointment.

(B) 30.09.2019, on expiry of Six months from close of accounts.
(C) 30.08.2019, date of submission date of Cost Audit Report.
 (D) 15.09.2019, date of holding of Annual General Meeting of PANTEX
LTD.

Answer: (c) 30.08.2019, date of submission date of Cost Audit Report.

Justification:-Every cost auditor appointed as such shall continue in such capacity

till the expiry of one hundred and eighty days from the closure of the financial year
or till he submits the cost audit report, for the financial year for which he has been
appointed.

(iii) Which one of the following KPI (Key Performance Indicator) is used to
measure efficiency of manufacturing performance?
(A) Production per Machine Hour.
(B) Operating Cycle of Materials turnover
(C) Materials as % of Total Cost
(D) % of idle time to total available time.

Answer: (B) Operating Cycle of Materials turnover

Justification:-
The Suggestive list of KPIs
Performance area KPI Measurement
Manufacturing Operating Cycle Material Turnover
Performance WIP Turnover
Finished Goods Turnover

(iv) The Consumer Service Audit Critically examines:

(A)Outstanding payment of consumers.
(B) Price consumers are ready to pay for particular product/services
(C) And appraise management of business enterprise of responsibility towards
consumers.
(D)Demand of a product by consumers.

Answer: (C) And appraise management of business enterprise of responsibility

towards consumers
 Justification: - The Consumer Service Audit critically examines and appraised
management of responsibility of a business enterprise towards consumers at right
time, in right quantity at the right place and price.

(V)”Related Party “with relation to a party means

(A)A Director or his relative.
(B) A Key managerial person or his relative.
(C) A firm, in which a Director, Manager or his relative is partner.
(D)Either or all of the above

(E) Answer :( D) Either or all of the above

Justification: -Section 2(76) of the Companies Act, 2013 ("the Act"), defines a
related party with reference to a company, to mean:
 director or a key managerial person or their relatives or
 a firm, private company in which the partner, director/ manager or his
relative is a partner or
 A private company or a public company in which a director or manager is a
director and holds along with his relatives, more than 2% of its paid-up share
capital.

(vi)Once the instances document is successfully validated from the tool, the next
step is to
(A)Download XBRL validation tool.
(B) Pre-scrutinize the validated instance document.
(C) Convert to human readable format and verify correctness of the instance
document.
(D)Attach instance document to the form CRA-4.

Answer :(B) Pre-scrutinize the validated instance document.

Justification: -Once the instance document is successfully validated from the tool,
the next step is to pre-scrutinize the validated instance document with the help of
the same tool. Next step is to Convert to pdf and verify the contents of the instance
document.

(vii) The bureau of Energy Efficiency is formed under

 (A)The Electricity Act,2003
(B) The Energy Conservation Act,2001
(C) The Electricity (Supply)Act,1948
(D)The Electricity Regulatory Commission Act,1998

Answer :(B) The Energy Conservation Act,2001

Justification: The Bureau of Energy Efficiency is an agency of the Government of

India, under the Ministry of Power created in March 2002 under the provisions of
the nation's 2001 Energy Conservation Act.
(viii) The knowledge of Entity’s Internal Control is to be understood by the Cost
Auditor as required by
(A)Cost Auditing Standard 101
(B) Cost Auditing Standard 102
(C) Cost Auditing Standard 103
(D)Cost Auditing Standard 104

Answer :( D) Cost Auditing Standard 104

Justification: As per Cost Auditing Standard 104, Cost auditor shall obtain an
understanding of internal controls relevant to the audit.

(ix) Profit Reconciliation of the Company as a whole is dealt with

(A)Part D para 2 of the Annexure to Cost Audit Report.
(B) Part C Para 1 of the Annexure to Cost Audit Report.
(C) Form of the Cost Audit report.
(D)Part A para 1 of the Annexure to the Cost Audit Report.

Answer :( A) Part D para 2 of the Annexure to Cost Audit Report.

Justification: Profit Reconciliation as per Cost and Financial Records forms part
of Part D-2 of the Annexure to Cost Audit Report.
(x) The following details relating to Meng Ltd. are given:
`
Royalty Paid on Units Produced 25,000
Hire Charges on Equipments 20,000
Design Charges 18,000
Software Development charges for production 22,000

What will be the Direct Expenses of the Company (as per CAS-10)
(A)`60,000
(B) `63,000
(C) `65,000
(D)`22,000

Answer :( D) 85,000.
MENG LTD.
Computation of Direct Expenses (As per CAS – 10)
Particulars `
Royalty Paid on Units Produced 25,000
Add:-Hire Charges on Equipments 20,000
Add:-Design Charges 18,000
Add:-Software Development charges for production 22,000
Direct expenses (total) 85,000/-

Justification: Direct Expenses: Expenses relating to manufacture of a product or

rendering a service, which can be identified or linked with the cost object other
than direct material cost and direct employee cost. Examples of Direct Expenses
are royalties charged on production, job charges, hire charges for use of specific
equipment for a specific job, cost of special designs or drawings for a job, software
services specifically required for a job, travelling Expenses for a specific job.
Section B (80 Marks)
Answer any five questions from Questions Numbers 2 to 8.
Each Question Carries 16 Marks.

Answer 2.(a)(i)
(I)a foreign company having registered office at Mumbai

Answer: - Every company, including foreign companies defined in clause (42) of

section 2 of the Act, engaged in the production of the goods or providing services,
specified in Tables A and B, (Regulated & Non-Regulated Sector) having an
overall turnover from all its products and services of rupees thirty five crore or
more during the immediately preceding financial year, shall be required to
maintain cost accounting records. Healthcare equipment limited is a foreign
company having registered office in Mumbai and engaged mainly in the
production of cardiac stents, Catheters, Pacemakers and Itracular Lence so it
covered under the Non-Regulated Sector therefore; maintenance of Cost Records
is applicable on the company.

(II) a Company classified as a micro Enterprise.

Answer: Companies which are classified as a micro enterprise or a small

enterprise including as per the turnover criteria under sub-section (9) of section 7
of the Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006)
are not required maintain Cost Records.

(III) a foreign company having only liaison offices at Delhi & Mumbai.

Answer: Foreign companies having only liaison office in India and engaged in
production, import and supply or trading of medical devices are exempted from
maintenance of Cost Records so same is not applicable on the company.

(IV) a Domestic company whose average turnover of Rs. 40 crore for last 2 years
has dropped to `24 Crore in FY2018-19.
Answer: Every company, including foreign companies having an overall turnover
from all its products and services of rupees thirty five crore or more during the
immediately preceding financial year, shall be required to maintain cost accounting
records. Once the maintenance of cost records becomes applicable, it would be
maintained on a continuous basis in the subsequent years also. In the given case
turnover average turnover is for the last 2 year is 40 crore so company is required
to maintain cost records no matter sales has dropped to Rs. 24 crore in FY 2018-19
as once the maintenance of cost records becomes applicable, it would be
maintained on a continuous basis in the subsequent years also.

Answer 2. (a)(ii)

(I) As per Rule 27 of CGST Rules, where the supply of goods or services is
for a consideration not wholly in money, the value of the supply shall be
the open market value of such supply; or the sum total of consideration in
money and equivalent; or the value of supply of goods or services or both
of like kind and quality.

(II) Proviso to Rule 28 of CGST Rules provides that where goods are
intended for further supply as such by the recipient, the value shall be an
amount equivalent to 90% of the price charged for the supply of goods of
like kind and quality by the recipient to his customer not being a related
person.

Answer 2. (b)

(i) clause 4 of Part-I of the Second Schedule to the Cost and Works
Accountants Act, 1959 states that expressing an opinion on cost and
pricing of any business or any enterprise in which the auditor or his firm
or a partner in his firm has a substantial interest would constitute
misconduct, unless he discloses the interest also in his report. As per the
facts of the case, the firm has been retained to evaluate the cost of
products manufactured by it for its information system. So this amounts
to Professional misconduct.
 (ii) According to Section 143(12) of the Companies Act 2013, if an auditor
of a company, in the course of the performance of his duties as auditor,
has reason to believe that an offence involving fraud is being or has been
committed against the company by officers or employees of the
company, he shall immediately report the matter to the Central
Government within such time and in such manner as may be prescribed.
Matter to be reported immediately but not later than 2 days of his
knowledge specifying:
i) Nature of Fraud with description;
ii) Approximate amount involved; and
iii) Parties involved.

Following disclosures to be made in Board’s Report:

a) Nature of Fraud with description;
b) Approximate Amount involved;
c) Parties involved, if remedial action not taken; and
d) Remedial actions taken.

Answer 3.(a)

(i) Advantages of The Cost Accounting Standards:

 Provides a structured approach to measurement of costs in
manufacturing process or service industry;
 Integrates, harmonize, and standardize cost accounting principles and
practices;
 Provides guidance to users to achieve uniformity and consistency in
classification, measurement, assignment, and allocation of costs to
products or services;
 Arrive at the basis of computing the cost of product, activity, or
service where required by legal or regulatory bodies;
 Enables practicing members to make use of Cost Accounting
Standards in the attestation of General Purpose Cost Statements; and
 Assists in clear and uniform understanding of all the related issues of
various user organizations, government bodies, regulators, research
agencies and academic institutions.
Answer 3.(a)(ii) In reference to Transportation Cost as per Cost Accounting
Standard-5(CAS-5)

(I) Cost of Transportation comprises of the cost of freight, cartage, transit

insurance and cost of operating fleet and other incidental charges whether
incurred internally or paid to an outside agency for transportation of
goods but does not include detention and demurrage charges.

(II) The following basis may be used, in order of priority, for apportionment
of outward transportation cost depending upon the nature of products,
unit of measurement followed and type of transport used :

i. Weight
ii. Volume of goods
iii. Tonne-Km
iv. Unit / Equivalent unit
v. Value of goods
vi. Percentage of usage of space

Once a basis of apportionment is adopted, the same should be followed

consistently.

Answer 3.(b)
Reconciliation of Profit between Cost and Financial Accounts for the year ended
March 31, 2019 of PANWOOD LTD.
Particulars Amount in Amount in
Rs. Rs.
Profit as per Financial Accounts 1,15,71,480
Add:-
Voluntary Retirement payment not included in 3,80,000
Cost Accounts
Four-fourth(4/5)of renovation expenses of 4,96,000
Rs.6,20,000
Donation towards CSR commitment 1,28,000
Loss on sale of Investment 32,800
undervaluation of closing inventory of raw 30,600
material in the financial records
Post Retirement Medical Grant 2,80,000 13,47,400
Less:
Profit on Sale of Fixed Assets-Not considered in 95,000
cost A/c
Interest received from outside the business 1,05,000
investment
Insurance claim relating to previous year 18,05,000
Overvaluation of closing stock in the financial 2,30,700
records
Profit from Retail Trading Activity 1,90,000 (-)24,25,700
Profit as per Cost Accounts 1,04,93,180

Answer 4(a)
Working capital refers to that part of firm's capital which is required for financing
short-term or current assets such as cash, marketable securities, debtors and
inventories. Funds, thus, invested in current assets keep revolving fast and are
being constantly converted into cash and these cash flows out again in exchange
for other current assets.

Being the Management Accountant of Manglow Ltd., following areas are required
to cover to overcome the crisis of working capital:-
1. Operating Cycle: - The cycle starts with the purchase of raw material and other
resources and ends with the realization of cash from the sale of finished goods. It
involves purchase of raw materials and stores, its conversion into stock of finished
goods through work-in- process with progressive increment of labour and service
costs, conversion of finished stock into sales, debtors and receivables, realization
of cash and this cycle continues again from cash to purchase of raw material and so
on. The speed/time duration required to complete one cycle determines the
requirement of working capital - linger the period of cycle, larger is the
requirement of working capital and vice-versa so in case of Working capital crisis,
operating cycle of the company should be supervise properly to avoid any delay.

2.Stock of Raw Materials:- The amount of working capital invested in holding

stock of raw material should be estimated on the basis of various costing
techniques so excess fund has not blocked here.

3. Stock of Finished Goods: - The amount of funds to be invested in holding stock

of finished goods can be estimated on the basis of annual budgeted units of
production, estimated cost of production per unit and the average holding period of
finished goods stock.

4. Investment in Debtors/Receivables- When the sales are made by a firm on cash

basis, the amount is realized immediately and no funds are blocked for after sale
period. However, in case of credit sales, there is a time lag between sales and
realization of cash. Thus, funds are to be invested in receivables, i.e. debtors and
bills receivables. It would, therefore, be more appropriate to ascertain the amount
of funds to be invested in debtors/receivables so the excess amount of working
capital is not blocked here and funds may utilized in some other work.

5. Cash and Bank Balance: - Cash is one of the current assets of a business. It is
needed at all times to keep the business going. A business firm has to always keep
sufficient cash to meet its obligations. Thus, a minimum desired cash and bank
balance to be maintained by a firm should be considered as an important
component of current assets while estimating the working capital requirements.

6. Trade Creditors: - The term trade creditors refer to the creditors for purchase of
raw material, consumable stores etc. The suppliers of goods, generally, extend
some period of credit in the normal course of business. The trade credit
arrangement of a firm with its suppliers is an important source of short-term
finance. It reduces the amount of net working capital required by a firm.

Answer 4(b)
Energy Audit is the key to a systematic approach for decision-making in the area
of energy management. It attempts to balance the total energy inputs with its use,
and serves to identify all the energy streams in a facility. It quantifies energy usage
according to its discrete functions. Industrial energy audit is an effective tool in
defining and pursuing comprehensive energy management programme.
As per the Energy Conservation Act, 2001, Energy Audit is defined as "the
verification, monitoring and analysis of use of energy including submission of
technical report containing recommendations for improving energy efficiency with
cost benefit analysis and an action plan to reduce energy consumption".
In that context, energy management involves the basis approaches reducing
avoidable losses, improving the effectiveness of energy use, and increasing energy
use efficiency.

. The following are some of the key functions of the energy auditor:
(i) Quantification of energy costs and quantities
(ii) To correlate trends of production or activity to energy cost.
(iii) To devise energy database formats to depict to correct picture – By
product, department or consumer.

While performing the aforesaid key functions, the energy auditor is required
to carry out the following activities:
1. To analyses the historical energy consumption and cost data.
2. To conduct preliminary energy audit with the objectives to identify:
(a) Major energy consuming equipment and process;
(b) Obvious inefficiencies and energy wastes; and
(c) Priority areas for further detailed investigation.
3. To conduct detailed technical and economic analysis of energy efficiency
measures involving large efficiency measures involving large capital investment or
long payback periods.

Answer 5(a)(i)

(I) The appointment of internal auditor can be done only by means of a

resolution passed at the meeting of the Board as specified under rule 8 of the
Companies (Meeting of Board and its Powers) Rules, 2014 and accordingly,
the company is also required to file Form MGT-14 with the Registrar within
 30 days from the date of passing of resolution by the Board. However, filing
of resolutions under clause (g) of sub-section (3) of section 117 has been
exempted for private companies.

(II) Section 138 of the companies act 2013 deals with provisions of
internal audit. As per section 138, (1) Such class or classes of companies as
may be prescribed shall be required to appoint an internal auditor, who shall
either be a chartered accountant or a cost accountant, or such other
professional as may be decided by the Board to conduct internal audit of the
functions and activities of the company. So, a chartered accountant or a cost
accountant or such other professional can be appointed as internal auditor of
a company as decided by Board to conduct internal audit.

Answer 5(a)(ii)
Adequacy of Internal Controls
As per SA 200R read with SA 315, the auditor should obtain an understanding of
the accounting system sufficient to identify and understand major classes of
transactions, manner of initiation of transactions, significant accounting records,
supporting documents and specific accounts in the financial statements and the
accounting and financial reporting process. Accounting control comprises the plan
of an organization and the procedures and records that are concerned with the
safeguarding of assets and the reliability of financial controls. Internal control so
far as financial and accounting aspects are concerned, aims at the following:
(i) Providing the flow of work through various stages.
(ii) There should be proper segregation of personnel duties so that no single person
can be in a position to handle whole of the work from its beginning to its end.
(iii)Adequate documentation should be made at each stage of work.
(iv) The transactions are recorded with appropriate amounts and in timely manner
and that too as per the applicable accounting policies and practices.
(v) The assets should be properly safeguarded. The access to the assets
(vi) Should be restricted to only authorize persons.
(vii) Existence of organizational chart would help in fixing responsibilities.
(viii) Building up of a system to locate the deviations and departures from the
prescribed procedures and to detect the frauds and errors automatically without
mush loss of time.
(ix)Standardized records and formats should be evolved. It would ensure
availability of right information at right time.
(x) There should be an efficient Management Information System.
(xi) Minimization of loss and wastages.
(xii) Employees should be encouraged to do good work and comply with the
procedures. Special attention should be given to the disgruntled employees.
(xiii) Adequate cut off procedures should be formulated so that the transactions of
one period can be separated from the transactions of other period.

Answer 5(b)
AUDIT OF HOSPITALS
The following points are to be considered necessary for conducting an audit of
Hospital.
(i) Check the letter of appointment to ascertain the scope of responsibilities.
(ii) Study the Charter or Trust Deed under which the hospital has been set up and
take a special note of the provisions affecting the accounts.
(iii) Examine, evaluate and verify the system of internal check, internal control and
determine the nature, timing and the extent of the audit procedures.
(iv) Vouch the entries in the Patient’s Bill Register with a copies of bill issued.
Test check the selected bills to see that these have been correctly prepared
taking into consideration the period of stay of each patient as recorded in the
Attendance Schedule.
(v) Vouch the collection from patients with copies of bills and entries in Bills
Register. Arrears of dues should be properly carried forward and where these
are deemed to be irrecoverable, they should be written off under due
authorizations.
(vi) Interest and/ or dividend income should be vouched with reference to the
Investment Register and Interest and Dividend warrants.
(vii) In case of legacies and donations which are received for specific purposes, it
should be ensured that any income therefrom is not utilized for any other
purposes.
(viii) Where receipts of subscription show a significant deviations from budgeted
figures, it should be thoroughly inquired into and the matter be brought to the
notice of the trustees or the Managing Committee.
(ix) Government grants or grants from local bodies should be verified with the
reference to the correspondence with the concerned authorities.
(x) Clear distinction should be made between the items of capital and revenue
nature.
(xi) The capital expenditure should be incurred under proper authorization by a
valid resolution of the trustees or the Managing Committee.
(xii) Verify the system of internal check as regards purchases and issue of stores,
medicines etc.
(xiii) Examine that the appointment of the staff, payment of salaries etc. are duly
authorized.
(xiv) Physically verify the investments, fixed assets and inventories.
(xv) Check that adequate depreciation has been provided on all the depreciable
assets.

Answer 6(a)

(A) Computation of Current Ratio = Current Assets/ Current Liabilities

=1400/400=3.5 times

Analysis:-
This ratio indicates whether an enterprise possesses sufficient Current Assets to
pay off its Current Liabilities. This ratio is an indicator of short term solvency or
liquidity position of an enterprise. Ideal ratio is 2:1, i.e., the enterprise should have
twice the current assets than the current liabilities, to exhibit ideal short term
solvency position. But 3.5 time is very high compared to given ratio of 2.5 times.

(B) Quick Ratio-(Trade Receivable Marketable Securities cash & cash

Equivalents) /Current liabilities
1000/400=2.5 times
Analysis:-
Obviously, it is vital that a company have enough cash on hand to meet accounts
payable, interest expenses and other bills when they become due. The higher the
ratio, the more financially secure a company is in the short term. A common rule of
thumb is that companies with a quick ratio of greater than 1.0 are sufficiently able
to meet their short-term liabilities.

In general, low or decreasing quick ratios generally suggest that a company is

over-leveraged, struggling to maintain or grow sales, paying bills too quickly or
collecting receivables too slowly. On the other hand, a high or increasing quick
ratio generally indicates that a company is experiencing solid top-line growth,
quickly converting receivables into cash, and easily able to cover its financial
obligations. Such companies often have faster inventory
turnover and cash conversion cycles.

(C) Sales to Inventory:-

Cost of Goods Sold/Inventory
=3275/400=8.18 times
Analysis:-
Inventory turnover is a measure of how efficiently a company can control its
merchandise, so it is important to have a high turn. This shows the company does
not overspend by buying too much inventory and wastes resources by storing non-
salable inventory. It also shows that the company can effectively sell the inventory
it buys.

This measurement also shows investors how liquid a company’s inventory is.
Think about it. Inventory is one of the biggest assets a retailer reports on its balance
sheet. If this inventory can’t be sold, it is worthless to the company. This
measurement shows how easily a company can turn its inventory into cash.

(D) Average collection period: = 365/DTR

Debtors Turnover ratio (DTR) = Sales/debtors
=4000/250=16 times.
Average Collection Period= 365/16= 22.81 days

Analysis:-
The monitoring of the average collection period is one way to track a company's ability to collect
its accounts receivable. It is 22.81 days compared to industry average of 35 days.

(E) Time Interest Earned:

The times interest earned ratio is calculated by dividing income before interest and income
taxes by the interest expense.
Profit before interest & Tax=605
Interest=90
Time Interest Earned=605/90=6.72 Times.
The times interest ratio is stated in numbers as opposed to a percentage. The ratio indicates
how many times a company could pay the interest with it’s before tax income, so obviously the
larger ratios are considered more favorable than smaller ratios.

(F) Profit margin: The profit margin formula is net income divided by net sales.
Net Income:-4000
Profit after tax-335
335/4000*100= 8.38%
Higher the ratio, good the position of the firm.

(G)Price to earnings ratio:

P/E Ratio=Market value per share/Earnings per share.
=Rs.75/Rs.4.19= Rs.17.90 per share

Companies with high price-earnings ratio are often considered to be growth stocks. It means
that investors have higher expectations for future earnings growth and are willing to pay more
for them as it indicates a positive future performance. However, the disadvantage of high P/E is
that growth stocks are often unpredictable, and this puts a lot of pressure on companies to do
more to justify their higher valuation. Therefore, investing in growth stocks will more likely be a
risky investment. Also, in some cases, it can even be interpreted as an overpriced stock.

(H)Return On total Assets: Return on total assets (ROTA) is a ratio that measures a
company's earnings before interest and taxes (EBIT) relative to its total net assets.
EBIT=605
Total Assets=3000
ROTA=605/3000*100=20.17%
 The greater a company's earnings in proportion to its assets, the more effectively that company
is said to be using its assets.

Answer 8(a)
The entity’s risk assessment process: The cost auditor shall obtain an
understanding of whether the entity has a process for:
(1) Identifying business risks relevant to cost reporting objectives;
(2) Assessing the likelihood of their occurrence;
(3) Estimating the significance of the risks; and
(4) Deciding about actions to address those risks.

Answer 8(b)
Internal Audit of Utilization of Resources:-
 Proper utilization of resources is important for maintaining productivity, because it
prevents staff from underperforming or being overburdened by workloads and
burning out.
 Projects can be managed with better visibility, reducing the risk of oversights.
 Using resources to their maximum potential gives company a better ROI.
 Internal Auditor has to ensure that specific resources aren’t being over or under-
utilized.
 Internal auditors has to look for discrepancies between resources available and for
what these resources are designed to be utilized and if any discrepancies are found,
they advise the senior management on processes to be implemented for
improvement.

Answer 8(c)
A CSR audit program can cover all or any of the following risks: -
• Effectiveness of the operating framework for CSR implementation
• Effectiveness of implementation of specific, large CSR projects
• Adequacy of internal control and review mechanisms
• Reliability of measures of performance
• Management of risks associated with external factors like regulatory compliance,
management of potential adverse NGO attention, etc.

Answer 8(d)
Process Input(kg) Output(kg) Loss Loss Output Net Output
(A) (B) (A-B) (%) (in %) for
1000 units of
input
(in Units)
Total 0.3 997
Consumption
Blow Room 41,10,169 38,27,662 2,82,507 6.87 93.13 928.47
Carding 38,42,123 35,74,310 2,67,813 6.97 93.03 863.75
Draw Frames 35,48,981 35,07,245 41,736 1.18 98.82 853.60
Roving(Simplex) 34,82,360 34,44,054 38,306 1.10 98.90 844.21
Ring Frame 35,16,085 32,73,475 2,42,610 6.90 93.10 785.96

Answer 8 (e)
Calculation of Value Added for the Year ended 31.03.2019
Amount In Amount In
Rs. Lakh Rs. Lakh
Net Sales(A) 4980 4980
Less: Cost of bought out of inputs:
Raw materials 2990
Stores 21
Power & Fuel 105
Overheads 377
Packing Forwarding Cost 21
Total cost of bought out of Inputs (B) 3514 3514
Value Added (A-B) 1466
Composition of Value Added.
Amt. in Rs. Lakh
Depreciation (Company as retained funds) 11
Interest 280
Bonus, Gratuity 42
Salaries, wages 410
Profit before tax (balancing figure) (Company as 743
retained funds)