Loyola College B.Com Nov 2010 Cost Accounting Question Paper PDF Download

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

   B.Com. DEGREE EXAMINATION – COMMERCE

FIFTH SEMESTER – NOVEMBER 2010

CO 5501 – COST ACCOUNTING

 

 

 

Date : 01-11-10                     Dept. No.                                        Max. : 100 Marks

Time : 9:00 – 12:00

PART – A

 

Answer ALL questions:                                                                                                      (10 x 2 = 20 marks)

Explain the following terms: Questions 1 – 4.

  1. `By products’ and `Joint products’
  2. Cost unit and Unit cost
  3. Absorption of overheads
  4. Cost plus contract
  5. State whether the following statements are True OR False:
  6. a) Abnormal idle time cost is recovered from the customer.
  7. b) During periods of rising material prices, FIFO method results in inflating the profit.
  8. A contract commenced on 1/7/2010. Details relating to the contract upto 31/12/2010 was as follows:

Material issued Rs.42,000

Wages paid Rs.30,000

Overheads Rs.15,000

Material at site on 31/12/2010 Rs.2000

20% of the material used and 10% of the wages paid are incurred for the work done but not certified.

Overheads are charged to the uncertified work as a %age on direct wages.

Calculate the cost of work uncertified as on 31/12/2010.

  1. From the following data, calculate re-order level and maximum level.

Rate of consumption – 10 to 20 units per day

Lead time – 6 to 10 days

Reorder quantity – 200 units

  1. From the following data, prepare Process 1 account

Materials introduced 4700 units at Rs.28,200

Labour Rs.14,910

Overheads Rs.10,000

Normal loss 10% of input

Scarp realized Rs.5 per unit

Output 4,300 units.

  1. From the following data calculate Labour turnover rate using Flux method:

No of workers at the beginning of the month – 500

No of workers at the end of the month – 600

During the month 5 workers left, 20 workers were discharged and 75 workers were recruited. Of these 10 workers were recruited for the vacancies of those leaving, while the rest were engaged for an expansion scheme.

  1. From the following data, calculate the Economic Batch Quantity:

Annual usage of a component – 6000 units

Set up cost per batch – Rs.20

Cost of production per unit – Rs.100

Carrying cost – 6% p.a. on inventory cost.

PART  B

Answer ANY FIVE questions                                                                                                 (5×8=40 marks)

 

  1. Define overheads. Distinguish between `allocation’, `apportionment’ and `absorption of overheads.

 

  1. What are the objectives of Cost Accounting? Explain any 4 differences between Cost Accounting and Financial Accounting.

 

  1. The financial records of AB Ltd reveal the following data for the year ended 31st March 2010:

Sales (50,000 units) Rs.10,00,000

Direct material Rs.5,00,000

Direct wages Rs.2,50,000

Factory expenses were Rs.1,50,000

Administration expenses Rs.1,45,000

Interest and dividend received Rs.15,000

Closing stock of finished goods was 5,000 units valued at Rs. 1,00,000

In cost accounts, factory expenses are charged at 70% of direct wages and administration expenses are charged at 20% of works cost. Ascertain the costing and financial profit and prepare a statement reconciling the two profits.

 

  1. From the following data, you are required to work out the earnings of a worker for a week under:
  2. a) Straight Piece Rate
  3. b) Taylors Differential Piece Rate
  4. c) Halsey Plan
  5. d) Rowan Plan

Weekly working hours – 48

Hourly wage rate – Rs.7.50

Piece rate – Rs.3 per piece

Normal time taken per piece – 20 minutes

Normal output per week – 120 pieces

Actual output for the week – 150 pieces

Differential piece rate – 80% of piece rate when output is below normal and 120% of piece rate when output is above normal.

 

  1. From the following data prepare Stores Ledger under FIFO method:

1st October opening stock 600 units at Rs.14 per unit

Receipts during the month:

3rd                    300 units at Rs.15 per unit

7th                   900 units at Rs.16 per unit

23rd                  400 units at Rs.18 per unit

Issues during the month:

5th        500 units

8th        800 units

27th      500 units

On 31st October a shortage of 10 units were noticed.

 

  1. The information given below is taken from the cost records of the factory in respect of job no. 707.

Direct material Rs.6,060

Wages –   Dept A 80 hours at Rs.4 per hour

Dept B 60 hours at Rs.3 per hour

Dept C 20 hours at Rs.5 per hour

Variable overheads are as follows:

Dept A Rs.7,500 for 5,000 hours

Dept B Rs.3,000 for 1,500 hours

Dept C Rs.2,000 for 500 hours

Fixed overheads of the factory are estimated at Rs.30,000 for 10,000 working hours.

Calculate the cost of the job 707 and the price to be quoted to give a profit of 20% on cost price.

  1.   A contractor obtained a contract for Rs.8,00,000 on 1st Jan.2009. The expenses incurred during

the year ended 31st Dec.2009 were as under:

Rs.

Materials                                                        2,20,000

Wages paid                                                     2,00,000

Wages accrued                                                10,000

Other expenses                                                20,000

Plant costing Rs.40,000 having a life of 5 years was used on the contract for 73 days. Material costing Rs.3,000 were stolen from the site. Material at site on 31.12.2009  were valued at Rs.24,600.  The contractor had received Rs.4,00,000 in cash upto 31.12.2009  representing 80% of the work certified. Work uncertified was estimated at Rs.14,000.

Prepare the contract account.

 

  1. X owns a truck, which cost Rs.1,20,000. The life of the truck is 2,00,00 kms and has a scrap value of

Rs.20,000  at the end of its life. The truck runs 5000 kms per month of which 20% is run empty. From

the following data, calculate the cost per km.

Manager’s salary                        –           Rs.3000 p.m.

Driver’s salary                 –           Rs.2500 p m

Cleaner’s salary               –           Rs.1500 p m

Garage rent                     –           Rs.1000 p m

Insurance                         –           2% p a on the cost of the vehicle

Road tax                          –           Rs.1200 p a

Repairs                            –           Rs.1800 p m

The truck uses 1 litre of petrol for every 10 kms. Cost of petrol Rs.48 per litre.

 

PART – C

Answer ANY TWO questions                                                                                                      (2×20=40 marks)

 

  1. R Ltd gives you the following information for the year 2009, during which 10,000 units were produced and sold.

Material Rs.90,000

Power Rs.12,000

Cost of rectifying defective work Rs.3,000

Direct wages Rs.60,000

Factory indirect wages Rs.20,500

Clerical salaries Rs.39,000

Selling expenses Rs.19,500

Plant repairs Rs.11,500

Sale proceeds of factory scrap Rs.2,000

The net selling price was Rs.31.60 per unit

Prepare a cost sheet and ascertain profit made in 2009.

From January 1, 2010 selling price is reduced to Rs.31 per unit. It is estimated that 15,000 units will be produced and sold. The rates for material and direct labour is expected to increase by 10%. Assuming factory overheads are recovered as a percentage of direct wages, and office and selling expenses as a percentage of works cost, prepare a cost sheet for the year 2010 showing the estimated cost and profit.

 

  1. 20000 units were introduced in a process at a cost of Rs.2 lakhs. Other expenses incurred were:

Material  Rs.1,04,000;  Labour Rs.1,71,000;  Factory overheads Rs.68,400. Normal loss is expected to be 10% of input.

16,000 units were completed and transferred to the next process.

2500 units were scrapped when they were completely processed.

1500 units remained as closing work in progress, the degree of completion being:

Material 75%;  Labour and overheads 40%.

Scrap was sold at Rs.11 per unit.

Prepare a statement showing the Process Account, Abnormal Loss Account, Equivalent production, Cost per equivalent unit and a Apportionment of cost.

 

  1. In a manufacturing concern there are 2 Production departments, A and B and 2 Service Depts. C and D. C renders service worth Rs.12000 to D and the balance to A and B in the ratio of 3:2. D renders service to A and B in the ratio of 9:1.

The overhead expenses incurred for the year are as follows:

Depreciation – Rs.95000

Rent         – Rs.18000

Power – Rs.10000

Canteen expenses – Rs.5400

Sundry expenses – Rs.4500

The following further information are given regarding the departments:

A                      B                      C                      D

Direct material (Rs.)                   6000                5000                3000                2000

Direct labour (Rs.)                       20000              10000              10000              5000

Floor space (sq mt)                      5000                4000                1000                2000

Value of machinery (in lakhs)     10                    5                      3                      1

Horse power of machines           1000                500                  400                  100

No of workers                              100                  50                    50                    25

Department A recovers overheads at a rate per labour hour. The labour hours in department

A is Rs.8000.

Department B recovers overheads at a rate per machine hour. Machine hours in department

B are 5000.

Calculate the cost of a job which requires Rs.2000 in material, Rs.1500 in wages.

The labour hours for the job in Department A is 20 and the machine hours for the job in Department

B is 10.

 

 

 

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