Cost & Management Accounting April 2026 Solved Assignments

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Cost & Management Accounting | Apr 2026 Examination

Q1. CustomTek Solutions is monitoring the progress of a Rs.100 crore hospital construction project under a cost-plus contract with the government. The project has experienced unexpected labor shortages and fluctuations in steel prices, leading to a significant increase in direct costs. The contract includes an escalation clause and requires transparent, periodic reporting to the client. The project manager needs to ensure the company earns a fair profit while justifying all costs and managing stakeholder expectations during these volatile times.Applying the cost-plus contract framework and escalation clause, how should CustomTek Solutions approach cost allocation, documentation, and client communication to justify increased expenditures and secure the agreed profit margin under changing market conditions? (10 Marks)

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Q2. A manufacturing concern issues materials to production using FIFO and Weighted Average methods.

From the following information relating to Material M for April 2025, you are required to:

(a) Prepare the Stores Ledger Account under the FIFO method

(b) Prepare the Stores Ledger Account under the Weighted Average method

(c) Compare the total value of material issued and closing stock under both methods

Date	Particulars	Quantity (Units)	Rate (Rs.)
Apr 1	Opening Stock	1,200	20
Apr 4	Purchase	800	22
Apr 7	Issue	1,000	—
Apr 10	Purchase	1,500	24
Apr 14	Issue	900	—
Apr 18	Purchase	700	26
Apr 21	Issue	1,100	—
Apr 25	Purchase	900	28
Apr 28	Issue	800	—

Assumptions:

– No losses or shortages

– Weighted Average rate is recalculated after each receipt  (10 Marks)

 

Q3(A). Alice’s Bakery, previously a single-location business, is about to expand into a second storefront in a totally new market area. Alice knows that direct and indirect costs, sunk and differential costs, as well as joint and common costs, will all impact her future profitability. She also wants to implement a cost allocation and tracking system that is fair, scalable, and supports her future expansion strategy—including franchising. She seeks your guidance as an MBA consultant specializing in cost and management accounting systems.Develop a customized cost allocation and tracking system for Alice’s Bakery expansion, synthesizing advanced concepts of cost classification, joint/common cost allocation, and expansion scalability. How will your framework guide strategic decisions now and in the event of further scaling through franchising? (5 Marks)

 

Q3(B). A manufacturing company produces three joint products—A, B, and C—by processing 20,000 kg of raw material at a cost of Rs.12 per kg. Total direct labour and overhead amount to Rs.1,10,000. At the split-off point, the production and selling prices are:

Product	Output (kg)	Selling Price per kg (Rs.)
A	9,000	32
B	6,000	20
C	3,500	16

 

However, 1,500 kg of process loss is considered normal and can be sold as scrap for Rs.2 per kg. Joint costs are to be apportioned among A, B, and C using the sales value at split-off method. Compute the cost per kg of each product after allocating joint costs and adjusting for the revenue from the normal loss, clearly showing all steps and logical assumptions. (5 Marks)

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