# Loyola College B.Com April 2007 Cost Accounting Question Paper PDF Download

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com.

 TH 12

DEGREE EXAMINATION –COMMERCE

FIFTH SEMESTER – APRIL 2007

CO 5501COST ACCOUNTING

Date & Time: 28/04/2007 / 1:00 – 4:00          Dept. No.                                                     Max. : 100 Marks

Answer all questions:                                                                                         10 x 2 = 20

• State the objectives of Cost Accounting.

• State any three essentials of a good wage system.

• State whether the following statements are true or false:
1. Bad Debts are excluded from cost accounts.
2. Sale of factory scrap is reduced from works cost.

• Calculate the total earnings from the following data under Halsey plan and under Halsey-weir plan. Standard Time: 10 hours; Time taken: 8 hours; Time rate: Rs.2.50 per hour.

• What are the bases for apportionment of expenses given below to the different departments? 1) Depreciation, 2) Canteen expense, 3) Factory cleaning, 4) Crèche expenses, 5) Power.

• Write short note on equivalent production units.

• What is escalation clause?

• A transport service company is running four buses between two towns which are 50kms. Apart. Seating capacity of each bus is 40 passengers. Actual passengers carried were 75% of the seating capacity. All the four buses ran on all the days and of the month if April 2005. Each bus made one round trip per day. Calculate the total kilometers and total passenger kilometers for the month.

• Calculate margin of safety and the amount of actual sales from the following:

Profit Rs.10, 000; P/V ratio – 50%; BEP Sales Rs.20, 000.

• A factory consumes 60 units of material per day which is supplied by a vendor in lots of 240 units each at Rs.2, 400 per lot. The factory works for 300 days per annum. Each order involves handling charges of Rs.120 and Freight charges of Rs.380. The storage cost is Re. 0.50 per unit per annum. The interest cost of carry inventory works out at 1.25% per month. Calculate the EOQ.

Section – B

Answer any five only:                                                                                    5 x 8 = 40

11) Distinguish between Financial accounting and Cost accounting.

• Briefly explain various inventory control techniques.

• What is Labour Turnover? Explain its causes and effect. And also suggest the steps to reduce labour turnover.

• A company produces three products A, B and C with standard costs and quantities per unit are as follows:

Particulars                                              A                    B                     C

Quantity produced                              10, 000            20, 000            30, 000

Direct material per unit (RS)                       50                    40                    30

Direct labour per unit (RS)                         30                    40                    50

Labour hours required per unit                     3                      4                      5

Machine hours required per unit                   4                      4                      7

Number of purchase requisitions          1, 200              1, 800              2, 000

Number of set ups                                     240                  260                  300

Department 1 = Rs.11, 00, 000 and Department 2 = Rs.15, 00,000.

Department 1 is labour intensive and Department 2 is machine intensive.

Total labour hours in department 1 – 1, 83,333 while

Total machine hours in department 2 – 5, 00,000.

Receiving/inspecting = Rs.14, 00,000

Production scheduling /machine set up  =     Rs.12, 00,000.

Number of batches received/inspected   =                 5, 000;

Number of batches for scheduling and set-up = 800. You are required to prepare product cost statement under traditional absorption costing and Activity Based Costing method.

• A product passes through three processes, A, B and C. The normal wastage if each process is as follows; Process A- 3%; B- 5%; C- 8%. The wastage of process A was sold at Rs.0.25 per unit, B at Rs.0.50 per unit and C at Re.1 per unit. 10,000 units were introduced in process A at a cost of Re.1 per unit. The other expenses are:

Process-A        Process-B        Process-C

Rs.                   Rs.                   Rs.

Sundry materials                     1,000               1,500                  500

Labour                                     5,000               8,000               6,500

Direct expenses                       1,050               1,188               2,009

Actual output (units)               9,500               9,100               8,100

Prepare the process accounts, assuming that there were not opening or closing stocks. Also give the abnormal loss and abnormal gain account, normal loss account.

• The records of a company show the following:

Period                          Sales                Profit

I                                   Rs.1, 20,000    Rs.   9, 000

II                                 Rs.1, 40,000    Rs. 13, 000

Find out: a) P/V ratio. b) Break even point, c) Fixed cost, d) Profit when sales are

Rs.1, 00, 000, e) Sales required to earn a profit  of Rs.20,000, f) Margin of safety,

1. g) variable cost for period II.

• A) From the following information calculate: a) Economic order quantity,
1. b) Reorder level, c) Maximum level, d) Minimum level.

Normal usage is 150 units per day. Minimum usage is 100 units per day. Maximum usage is 200 units per day. Reorder period 50 to 60 days. The annual usage is 50, 000 units. The cost of purchase is Rs.100 per order. Cost per unit is Re.1 carrying cost is 10%per annum.

1. B) From the following particulars, prepare stores ledger by adopting Weighted Average Method of pricing of material issues:

Date                Receipts                                              Issues

01.01.99          600 units at Rs.20 per unit

10.01.99          400 units at Rs.24 per unit

12.01.99          800 units at Rs.22 per unit

15.01.99                                                                      500 units

16.01.99                                                                      300 units

18.01.99          400 units at Rs.28 per unit

20.01.99                                                                      300 units

22.01.99          600 units at Rs.30 per unit

25.01.99          200 units at Rs.32 per unit

27.01.99                                                                      400 units

31.01.99                                                                      200 units.

• The following details are available from the books of accounts of accounts of a contractor for the year ended 31st March, 2003 with respect top particular contract No.313. He has undertaken for a manufacturing organization:

Materials sent to site                                                               5, 11,800

Labour engaged in site                                                            4, 66,100

Cost of plant installed at site                                                  1, 00,000

Direct expenses                                                                           24,000

Establishment expenses                                                              29,000

Materials returned to stores                                                          2,120

Work certified                                                                       10, 70,000

Cost of work not certified                                                          31,000

Materials in hand as on 31st March, 2003                                   12,220

Accrued wages as on 31st March, 2003                                      11,160

Accrued Direct expenses                                                              1,330

Value of plant as revealed on 31st March,2003                          88,000

The contractor price agreed upon with the Contractee is Rs.13, 00,000 payment of Rs.9,90,000 has been received from the Contractee. You are required to prepare the contract account, computing and incorporating the said account the profit to be taken to the profit and loss account for the year ended 31st March, 2003.

Section – C

Answer any two only.                                                                                  2 x 20 = 40

19) The following figures are available from financial accounts for the year 2005.

Direct Material consumed                               Rs.       2, 00,000

Direct Wages                                                              1, 00,000

Selling and distribution overheads                             2, 40,000

Preliminary expenses written off                                    40,000

Legal charges                                                                  20,000

Interest on bank deposit received                                   20,000

Sales (1, 20,000 units)                                               18, 00,000

Closing stock (30,000 units)                                       1, 60,000

The cost accounts reveal the following:

Direct material consumed Rs.2, 20,000. Direct wages Rs.80, 000.  Factory Overheads at 20% on prime cost. Administration overheads at Rs.2 per unit produced and selling overheads at Rs.2 per unit sold.

Prepare: (1) Statement showing cost and profit; (2) Financial profit and loss account; (3) Reconciliation statement.

• Electronics Ltd., furnish the following information. It has three production departments A,B and C and two service departments D and E. The following figures are extracted from the records of the company:

Rent and Rates.          Rs.10, 000.      Power                                      Rs.  3, 000

General lighting          Rs.   1,200       Depreciation on Machinery     Rs.20, 000

Indirect wages             Rs.  3,000       Sundries                                  Rs.20, 000

The following further details are available:

Particulars                   A              B              C                D              E

Floor Area (Sq.mts.)   2000         2500         3000          2000             500

Light points                     10             15             20              10                 5

Direct wages (Rs)       6000         4000         6000           3000          1000

H.P.of Machine               60             30             50               10            —-

Value of Machine.Rs.60000      80000     100000           5000         5000

Working hours             6226        4208         4066

The expenses of D and E are allocated as follows:

A         B         C         D         E

D                                 20%     30%     40%     —          10%

E                                  40%     20%     30%     10%     —

What is the total cost of an article if its raw material cost is Rs.60. Labour cost Rs.40, and it passes through departments A, B and C for 4, 5 and 3 hours respectively?

• The following data are available in respect of process I for the month of October:

Opening work in progress: 2250 units at Rs.11, 250

Degree of Completion Materials – 100%; Labour – 60%; Overheads – 60%

Input of materials: 22,750 units at Rs.88, 500

Direct wages: Rs.20, 500

Units scrapped: 3,000 units.

Degree of Completion: Materials – 1005; Labour – 70%; Overheads – 70%

Closing work in progress: 2, 500 units.

Degree of Completion: Materials – 100%; Labour – 80%; Overheads – 80%.

Units transferred to the next process: 19,500 units.

Normal process loss in 10% of total input (opening stock plus units put in). Scrap value is Rs.3.00 per unit. The company follows FIFO method of inventory valuation.

You are required to: 1) Prepare statement of equivalent production; 2) Statement of cost per equivalent unit for each element and cost of abnormal loss, closing work in progress and units transferred to next process; and Prepare process I account.

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