Loyola College B.Com Corporate & Secretaryship Nov 2008 Cost Accounting Question Paper PDF Download

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – CORPORATE SECRETARYSHIP

LA 06

 

FIFTH SEMESTER – November 2008

BC 5501 – COST ACCOUNTING

 

 

 

Date : 05-11-08                     Dept. No.                                        Max. : 100 Marks

Time : 9:00 – 12:00

 

SECTION – A

Answer ALL questions                                                                                               (10 x 2 = 20 marks)

 

  1. What is perpetual inventory system?
  2. Explain EOQ.
  3. Give reasons as to why it is necessary to reconcile cost accounts and financial

accounts.

  1. Explain with example ‘first-in- first-out’ (FIFO) method of stock valuation.
  2. Differentiate between job costing and process costing.
  3. How much of profit would you allow to be considered in the following case ?

Rs.

Cost incurred so far for contract      :    2,80,000

Contract price                                   :    5,00,000

Cash received                                   :    2,70,000

Uncertified work                              :       30,000

Retention money 10%

  1. Mr. X runs a tempo service and has 5 vehicles. Distance traveled by each vehicle per

day – 200 kms.  Normal loading capacity – 100 quintals.  Wastage in loading capacity

–  10%.  Percentage of vehicle laid-up for repairs – 5%.  Effective days in a month –

  1. Calculate quintal kms of the vehicles.
  2. Calculate direct labour hour rate from the following:

Total number of workers-100; Working days in a year-300; No. of hours per day

worked -8; Idle time -5%; Factory overheads-Rs. 11,400.

  1. The records of Anand Company present the following data for the month of

August 2008. Direct labour cost-Rs.16,000(160% of factory overheads); cost

of production-Rs. 56,000;  administration expenses-2,600; opening stock of raw

materials-Rs. 8,000 and closing stock of raw materials-Rs. 8,600; sales for the

month-Rs. 75,000. Prepare statement of cost.

  1. Calculate earnings of Worker ‘A’ under straight piece system and Taylor’s

differential piece rate system.  Normal rate per hour Rs. 2.40;standard time per

unit-30 seconds; Worker ’A’ produced 800 units per day.

                                                             

                                                             SECTION – B

      Answer any FIVE questions                                                                                             (5 x 8 = 40 marks)

  1. What do you mean by elements of costs? Discuss the various elements of costs.
  2. What is labour turn-over? Explain its causes and effects and also suggest the steps to

reduce labour turn-over.

 

 

 

  1. Production sections of a factory working on the job order system pay their workers

      under the Rowan Premium  Bonus Scheme.  Workers also get a Dearness allowance

of Rs. 12 per week of 55 hours.

A  worker’s basic wage is Rs. 2 per day of 8 hours and his time sheet for a week is

summarised below:

Job No.                  Time allowed                      Time taken

1844                             25 hrs                               20 hrs

1926                             30 hrs                               20 hrs

Idle time(waiting)                                                                 8 hrs

48 hrs

Calculate the gross wages he has earned for the week and indicate the accounts

to which the wages amounts will be debited.

 

  1. In a factory, there are two service departments S1 and S2 and three production

departments P1, P2, and P3.  In April 1998, the departmental expenses were:

Departments       P1                    P2                  P3                  S1                   S2

Rs.           6.50,000         6,00,000        5,00,000         1,20,000        1,00,000

The service department expenses are allotted on a percentage basis as follows:

Service Departments               Production Deptts.                         Service Deptts.

P1           P2            P3                    S1                  S2

S1                           30           40             15                    —                   15

S2                           40           30             25                     5                    —

Prepare a statement showing the distribution of the two service departments

expenses to the three departments.

 

  1. Utkal Construction Ltd. took a contract in 2007 for road construction. The contract

price was Rs. 10,00,000 and its estimated cost of completion would be Rs. 9,20,000.

at the end of 2007, the Company has received Rs. 3,60,000 representing 90% of

work certified.  Work not yet certified had cost Rs. 10,000.

Expenditure incurred on the contract during 2007 was as follows: Materials

Rs. 50,000; Labour Rs. 3,00,000; Plant Rs. 20,000.

Materials costing Rs. 5,000  were damaged and had to be disposed of for Rs. 1,000

Plant is considered as having depreciated by 25%.

Prepare Contract Account for 2007 in the books of Utkal Construction Ltd.

 

16.Union Transport Company supplies the following details in respect of a truck of 5

tonne capacity:

Cost of truck                            Rs. 4,50,000

Estimated life                           10 years

Diesel, oil, grease                     Rs. 150 per trip each way

Repairs & maintenance            5,000 per month

Drivers’ wages                         5,000 per month

Cleaners’ wages                       2,500 per month

Insurance                                  4,800 per year

Tax                                           2,400 per year

General supervision charges    4,800 per year

The truck carries goods to and from the city covering a distance of 50 km. each way.

In outward trip, freight is available to the extent of full capacity and on return 20%

of capacity.  Assuming that the truck runs on an average of 25 days a month, work

out: (a) Operating cost per tonne-km (b) Rate per tonne per trip that the company

should charges if a profit of 50% on freight is to be earned.

 

 

 

17.Ace Ltd. manufactures a product and the following particulars are collected for

the year ended March, 2000.

—Monthly demand(units)                 1,000

—Cost of placing an order(Rs.)            100

—Annual carrying cost(Rs. per unit)      15

—Normal usage(units per week)             50

—Minimum usage(units per week)         25

—Maximum usage(units per week)        75

—Re-order period(weeks)                      4-6

Your are required to calcultate (i) Re-order quantity, (ii) Re-order level,

(iii) Minimum level, (iv) Maximum level, (v) Average stock level.

 

  1. 10,000 units of raw materials are introduced into a process at cost of Rs. 20,000. Wages

and overheads for the process are Rs. 5,100 and Rs. 3,400 respectively.  7,500 units

were completed; of the remaining 2,500 units on the average 40% work has been done

in respect of labour and overheads.  Ascertain the cost of completed units and

work-in-progress at the end. 

 

 

SECTION – C

Answer any TWO questions                                                                               (2 x 20 = 40 marks)

 

  1. South Viscose Ltd. has furnished you the following information from the financial

books for the year ended 31st March 2008.

Profit and Loss Account

For the year ended 31st March 2008

 

Opening Stock

500 units at Rs. 35 each

Materials consumed

Wages

Gross Profit c/d

 

Factory overheads

Administration overhead

Selling expenses

Bad debts

Preliminary expenses

Net Profit

 

    Rs.

 

17,500

2,60,000

1,50,000

 3,02,500

 7,30,000

94,750

1,06,000

55,000

4,000

5,000

    48,000

3,12,750

 

Sales:

10,250 units

Closing stock:

250 units @ Rs. 50 each

 

 

Gross Profit b/d

Interest

Rent Received

    Rs.

 

7,17,500

 

12,500

________

 7,30,000

3,02,500

250

10,000

 

 

________

3,12,750

The cost sheet shows the cost of materials as Rs. 26 per unit and the labour cost as

Rs. 15 per unit.  The factory overheads are absorbed at 60% of labour cost and

administration overheads at 20% of factory cost.  Selling expenses are charged at

Rs. 6 unit.  The opening stock of finished goods is valued at Rs. 45 per unit.

You are required to prepare:

(i) a statement showing profit as per cost accounts for the year ended 31st March

2008.

(ii) a statement showing the reconciliation of profit disclosed in cost accounts

with the profits shown in the financial accounts.

 

 

 

 

 

  1. From the following details of stores receipts and issues of materials “EXE” in a

manufacturing unit, prepare the Stock Ledger using Weighted Average Method of

valuing the issues.

 

2005

       Nov.    1 Opening stock 2,000 units @ Rs. 5.00 each

3  Issued 1,500 units to production

4  Received 4,500 units @ Rs. 6.00 each

8  Issued 1,600 units to production

9  Returned to stores 100 units by Production Department(from the issues

of Nov. 3)

16  Received 2,400 units @ 6.50 each

19  Returned to supplier 200 units out of the quantity receive on Nov. 4

20  Received 1,000 units @ Rs. 7.00 each

24  Issued to production 2,100 units

27  Received 1,200 units @ Rs. 7.50 each

29  Issued to production 2,800 units.

(Use rates upto two decimal places)

 

  1. Product ‘Z’ is obtained after it passes three distinct processes. The following

information is obtained from the accounts for the month ending March, 2005:

Process

Items                                                   Total               I             II             III

Rs.               Rs.          Rs.           Rs.

Direct material                                    7,542            2,600      1,980        2,962

Direct wages                                       9,000            2,000       3,000        4,000

Production overheads                         9,000               —              —              —

% of Normal Loss to input                                         5%         10%          15%

Output(in units) during the month                              950          840          750

Value of scrap per unit(Rs.)                                          2              4              5

1,000 units at Rs. 3 each were introduced to process I.  There was no stock of

material or work-in-progress at the beginning or end of the period.  The output of

each process passess direct to the next process and finally to finished stores.

Production overhead is recovered on 100 per cent of direct wages.

Prepare process cost accounts and other related accounts. 

 

 

 

 

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