LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.Com. DEGREE EXAMINATION – CORPORATE SEC.
FIFTH SEMESTER – APRIL 2012
BC 5501 – COST ACCOUNTING
Date : 27-04-2012 Dept. No. Max. : 100 Marks
Time : 9:00 – 12:00
SECTION – A
Answer ALL the questions: (10×2=20marks)
- Define cost accounting.
- Prime cost includes direct material, direct——-and direct——–.
- Say true or false with reason
ABC analysis gives equal importance to all materials
- The time card of a worker reveals that in a normal week of 48 hours, he worked for 52 hours at the rate of Rs.15 per hour. Taking over time premium at 100% of the time rate calculate the gross wages
- Find out the amount of rent apportioned to each department.
Rent-Rs.8000
Space occupied by departments:
A-100 sq.feet
B-200 sq.feet
C-300 sq.feet
D-400 sq.feet
6) Write a note on job costing and the industries which adopt job costing.
7) What is work certified?
8) Cost of tyres and tubes is a——-charge in operating costing.
9) Pankajam travels employs 5 buses which run over a route of 140 kms(one way),
making one round trip a day. The buses run 360 day per year and 10% of them on
average are laid out for repairs. Ascertain the total running kilometers per year.
10) What are joint products?
SECTION – B
Answer any FIVE questions: (5×8=40marks)
11) Discuss the objectives and functions of cost accounting.
12) Explain ABC method of inventory control.
13) What are the causes for labour turn over?
14) The following details have been extracted from the cost records of Rajasekhar Ltd.
| Particulars | Rupees |
| Stock of raw materials on 1st December 2010 | 75,000 |
| Stock of raw materials on 31st December 2010 | 91,500 |
| Direct wages | 52,500 |
| Indirect wages | 2,750 |
| Sales | 2,11,000 |
| Work-in-progress 1st December 2010 | 28,000 |
| Work-in-progress 31st December 2010 | 35,000 |
| Purchase of raw materials | 66,000 |
| Factory rent, rates and power | 15,000 |
| Depreciation of plant and machinery | 3,500 |
| Expenses on purchases | 1,500 |
| Carriage out wards | 2,500 |
| Advertising | 3,500 |
| Office rent and taxes | 2,500 |
| Traveling salesmen wages and commission | 6,500 |
| Stock of finished goods 1st December 2010 | 54,000 |
| Stock of finished goods 31st December 2010 | 31,000 |
Prepare a cost sheet with maximum possible information.
15) From the following information calculate:
- i) Economic order quantity
- ii) Reorder level
iii) Maximum level
- iv) minimum level
Normal usage 150 units per day. Minimum usage 100 units per day. Maximum usage 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 Rs.1. Carrying cost is 10% per annum.
16) From the following particulars, calculate earnings of a worker under:
- i) Time rate system
- ii) Piece wage rate
iii) Halsey plan
- iv) Rowan plan
Wage rate-Rs.2 per hour
Production per hour-4 units
Dearness allowance-Rs.1 per hour
Standard time fixed-80 hours
Actual time taken-50 hours
Production-250 units
17) From the following information of Swetha Construction Company prepare the contract account for
- Also show what part of the profit on the contract should be taken credit of in 2009. The contract
was for Rs.8, 00,000.
| Particulars | Rupees |
| Materials issued from stores | 1,50,000 |
| Wages paid | 2,20,000 |
| General charges | 8,000 |
| Plant installed at site on 1st july 2009 | 40,000 |
| Materials on hand at close | 8,000 |
| Wages accrued due | 8,000 |
| Work certified | 4,00,000 |
| Work completed but not certified | 12,000 |
| Cash received | 3,00,000 |
| Materials transferred to other contracts | 8,000 |
| Depreciation on plant is to provided at 10% per annum | 2,000 |
18) In manufacturing the main product A, a company processes the resulting waste material into two by-
products-B and C. During one period of production the following data was compiled
| Particulars | A | B | C |
| Sales | 8,00,000 | 64,000 | 96,000 |
| Cost before separation (Rs) | 3,10,400 | — | — |
| Cost after separation (Rs) | 80,000 | 12,800 | 14,400 |
| Estimated net profit percentage to sales value | — | 20% | 30% |
| Estimated selling expenses as percentage of sales value | 20% | 10% | 15% |
There is no beginning or ending inventories. Prepare an income statement concerning the period described using reversal cost method for by-products.
SECTION – C
Answer any TWO questions: (2×20=40marks)
19) The following information is available in respect of process I for the month of January 2011
Opening work in progress-5000units
Materials 100% complete-Rs.18,750
Labour 60% complete-Rs.7,500
Overheads 60% complete-Rs.3,750
Units introduced into the process-20,000
Closing work-in-progress-7,000 units
Materials 100% complete
Labour 50% complete
Overheads 50% complete
18,000 units are transferred to next process. The process costs for the month were as follows:
Materials-Rs.2, 31,250;Labour-Rs.1,64,500 and Overheads-Rs.82,250.
Prepare statement of equivalent production, statement of cost, statement of evaluation and process
account by following average cost method
20) Modern Manufacturers Ltd have three production departments A,B,C and two service departments S1
and S2, the details pertaining to which are as under
| Particulars | A | B | C | S1 | S2 |
| Direct wages (Rs) | 30,000 | 20,000 | 30,000 | 15,000 | 5,000 |
| Working hours | 3,070 | 4,475 | 2,419 | — | — |
| Value of machines(Rs) | 6,00,000 | 8,00,000 | 10,00,000 | 50,000 | 50,000 |
| H.P of machines | 60 | 30 | 50 | 10 | — |
| Light points | 100 | 150 | 200 | 100 | 50 |
| Floor space (Sq.feet) | 20,000 | 25,000 | 30,000 | 20,000 | 5,000 |
The following figures extracted from the accounting records are relevant.
Rent-Rs.15,000; General lighting-Rs.6,600;Indirect wages-20,000;Power-Rs.15,000;Depreciation on machines-Rs.1,00,000 and sundries-Rs.10,000
The expenses of service departments are allocated as under:
| Departments | A | B | C | S1 | S2 |
| S1 | 20% | 30% | 40% | — | 10% |
| S2 | 40% | 20% | 30% | 10% | — |
Find out the works cost of product X which is processed for manufacture in departments A,B,C for
4,5,3 hours respectively, given that its direct material is Rs.500 and direct labour cost is Rs.430.
21) A person owns a bus which runs from Delhi to Chandigargh and back for 10 days in a month. The
distance between Delhi and Chandigarh is 150 miles. The trip between these places is completed the
same day. The bus goes another 10 days to Agra which is 120 miles away from Delhi and completed
on the same day. For the rest of the 4 days in a month the bus makes local trips distance covered in
this being 40 miles. Calculate the rate the person should charge a passenger when he wants to earn a
profit of 33 1/3 % on his takings. The other information is given below:
| Cost of the bus | Rs 60,000 | Lubricant oil Rs 10 per 100 miles | |
| Depreciation | 20% | Repairs and maintanance | Rs 500 pm |
| Salary of Driver | Rs 350 pm | Permit fees | Rs 284 pm |
| Salary of Conductor | Rs 350 pm | Normal capacity of the bus | 50 passengers |
| Salary of accountant | Rs 160 pm | Token tax | Rs 600 p.a |
| Insurance | Rs 1680 p.a | Diesel Consumption 4 miles per litre costing Rs 1 per litre. |
The bus is generally occupied 90% of the capacity when it goes to Chandigharh and 80% when it goes to Agra and is full in local trips. Passenger tax 20% of his net takings.
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