St. Joseph’s College of Commerce B.Com. 2013 I Sem Cost And Management Accounting Question Paper PDF Download

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ST. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)
END SEMESTER EXAMINATION – OCTOBER 2013
B.COM – III SEMESTER
COST AND MANAGEMENT ACCOUNTING
Duration: 3 hours Max. Marks: 100
SECTION – A
I) Answer any TEN of the following: ( 10 x 2 = 20)
1. What is the difference between ‘Idle time’ and ‘Idle capacity’?
2. What is ‘works on cost’? How is it different from ‘Works Cost’?
3. What are Semi-variable costs? Give two examples?
4. State two factors to be considered in the choice of methods of pricing material
issues?
5. What is ‘continuous stock taking’?
6. Briefly explain how bonus is calculated in Rowan Plan?
7. How is setting up time treated in calculating machine hour rate?
8. What do you understand by the term ‘Retention Money’?
9. A truck starts with a load of 5 tons of goods from Station ‘X’. It unloads ‘2’ tones
at station ‘Y’ and the rest of the goods at station ‘Z’. It reaches back directly to
station X after getting reloaded with 4 tons at station ‘Z’. The distance between X
to Y, Y to Z and X to Z are 20km, 30 km and 40 km respectively. Compute the
total ton kms.
10. State any 2 such items which are included in cost accounts but not in Financial
Accounts/
11. What are the three elements of Cost?
12. Briefly explain ‘Work certified’ in Contract Costing?
SECTION – B
II) Answer any FOUR of the following (4 x 5 = 20 )
13. Mr. Gopal furnishes the following data relating to the manufacture of a standard
product during the month of April 2009:
Raw material consumed Rs.15,000
Direct labour charges Rs.9,000
Machine hours worked 900
Machine Hour Rate Rs. 5
Administration overheads 20% on works cost
Selling Overhead Rs. 0.50 per unit
Unit produced 17,100
Units sold 16,000 at Rs. 4 per unit
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You are required to prepare a cost sheet from the above, showing:
(a) the cost per unit, (b) cost per unit sold and profit for the period.
14. SV. Construction Ltd. have obtained a contract for the construction of a bridge. The
value of the contract is Rs. 12 lakhs and the work commenced on 1st October, 2009.
The following details are shown in their books for the year ended 30th
September,2010:
Plant purchases Rs. 60,000; Wages paid Rs. 3,40,000, Materials issued to site
Rs. 3,36,000; Site expenses Rs. 8,000; General overheads apportioned Rs. 32,000;
Wages accrued as on 30-9-2010 Rs. 2,800; Materials at site as on 30-9-2010 Rs. 4,000;
Direct expenses accrued as on 30-9-2010 Rs. 1,200; Work not yet certified at cost Rs.
14,000; Cash received being 80% of work certified Rs. 6,00,000. Life of plant
purchased is 5 years and scrap value is nil.
(1) Prepare the contract account for the year ended 30th September, 2010;
(2) Show the amount of profit which you consider might be fairly taken on
the contract and how you have calculated it.
15. Prepare stores ledger a/c showing the receipts and issues, pricing materials issued
on the basis of: Simple average method
Receipts
1-10-12 opening stock 400 units at Rs.3.50 per unit
3-10-12 purchased 600 units at Rs.4.00 per unit
13-10-12 purchased 1800 units at Rs.4.30 per unit
23-10-12 purchased 1200 units at Rs.3.80 per unit
Issues
5-10-12 issued 800 units
15-10-12 issued 1200 units
25-10-12 issued 1200 units
16. From the following figures prepare a Reconciliation Statement
Rs.
Net profit as per costing records 1,72,400
Works overhead under recovered in costing 3,120
Administrative overhead recovered in excess 1,700
Depreciation charged in financial records 11,200
Depreciation recovered in costing records 12,500
Interest received but not included in costing 12,500
Obsolescence loss charged in financial books 5,700
Income tax provided in financial books 40,300
Bank interest credited in financial books 750
Stores adjustment (credit in financial books) 475
Depreciation of stock charged in financial books 6,750
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17. The standard time allotted for a job is 20 hours and the rate per hour is Rs.20 plus a
dearness allowance of Rs.5 per hour worked
The actual taken by a worker is 15 hours. Calculate the earnings under (a) Time
system (b) Halsey Plan (c) Rowan Scheme.
18. A factory has 2 production departments ( A &B) and 2 service departments (X & Y).
The departmental overhead distribution summary is s follows
A B X Y
Rs Rs Rs Rs
Overheads
allocated
6,000
4,000
1,170
1,500
The expenses of the service departments are to be charged on a percentage basis as
follows
A B X Y
Expenses of Service
department X
40%
50%
10%
Expenses of Service
department Y
50%
30%
20%
Show how the expenses of the 2 service departments are to be charged to the 2
production departments using repeated distribution method
SECTION – C
III) Answer any THREE of the following (3×15 = 45)
19. M.K Works can produce 60,000 units per annum at its optimum (100%) capacity.
The estimated costs of production are as under:
Direct material Rs. 3 per unit
Direct labour Rs. 2 per unit
Indirect expenses:
Fixed Rs.1,50,000 per annum
Variable Rs. 5 per unit
Semi variable Rs. 50,000 p.a. upto 50% capacity and an extra expenses of Rs.
10,000 for every 25% increase in capacity on part thereof .
The factory produced only against orders an not for own stock. If the production
programme of the factory is as indicated below, and the management desires to ensure
a profit of Rs.1,00,000 for the year, work out the average selling price at which each unit
should be quoted.
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First 3 months of the year 50% of capacity
Remaining 9 months 80% of capacity
Ignore selling, distribution and administration overheads.
20. The following is the Trial Balance of Pragathi Construction Company, engaged on
the execution of Contract No.107, for the year ended 31st December, 2001:
Rs. Rs.
Contractee’s Account
(Amount received against 75% of work certified) 3,00,000
Buildings 1,60,000
Creditors 72,000
Bank Balance 35,000
Capital Account 5,00,000
Materials 2,00,000
Wages 1,80,000
Expenses 47,000
Plant 2,50,000
8,72,000 8,72,000
The work on Contract No.107 was commenced on 1st January 2001. Materials
costing Rs. 1,70,000 were sent to the site of the contract but those of Rs. 6,000 were
destroyed in an accident. Wages of Rs. 1,80,000 were paid during the year. Plant
costing Rs. 50,000 was used on the contract all through the year. Plant with cost of Rs. 2
lakhs was used from 1st January to 30th September and was then returned to the stores.
Materials cost of Rs. 4,000 were at site on 31st December, 2001.
The contract was for Rs. 6,00,000 and the contractee pays 75% of the work
certified. Work certified was 80% of the total contract work at the end of 2001.
Uncertified work was estimated at Rs. 15,000 on 31st December, 2001.
Expenses are charged to the contract at 25% of wages. Plant is to be depreciated
at 10% for the entire year.
Prepare Contract No. 107 Account for the year 2001 and make out the Balance
Sheet as on 31st December 2001 in the books of Pragathi Construction Co.
21. A manufacturing concern has 2 identical large machines and 4 small machine. Each
large machine occupies 1/4th of the working area and employs 3 workers. Each small
machine occupies ½ the space of the large machine and employs 2 workers. The
workers are paid on the basis of piece rate system according to units produced. Each of
the 6 machines are estimated to work for 1,440 hours a year.
The effective working life for the large machine is 12,000 working hours and 9000
working hours for the small machine. The large machine costs Rs.2,00,000 each and
small machine costs Rs.40,000 each. The scrap value are Rs.40,000 & Rs.5,000
respectively for the large & small machine. Repairs & maintenance are estimated at
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Rs.4,000 for the large machine and Rs.1,200 for the small machine during its effective
life. Power consumption is 50 paise per unit. And amounts to 20 units for the large
machine and 2 units for the small machine per hour. The manager is paid a salary of
Rs.2,50,000 p.a. and the supervision requires ½ of his time divided equally among the 6
machines.
The other expenses were rent of the department Rs.6,400 pa, lighting Rs.1,820 p.a. (to be
apportioned on the basis of number of workers). Calculate the machine hour rate taking
a period of 3 months as the basis.
22. The following figures are taken from the books of Jayanth & co for the year ended
31st Dec 2004.
Financial Accounting Cost Accounting
Opening stock
Raw materials
Finished goods
6,000
5,000
5,000
4,800
Closing stock
Raw materials
Finished goods
4,000
6,000
4,300
8,000
Purchase of materials 40,000
Direct labour 20,000
Factory expenses 18,000 21,000 absorbed
Indirect labour 3,000
Sales 1,20,000
Administrative expenses 6,000 4,000 absorbed
Interest received 5,000
Goodwill written off 1,000
Calculate the Profit as per cost and financial books. Prepare a reconciliation statement
showing clearly the reasons for the variation in profit figures.
23. A small scale industrial unit produces specialty products employing 5 workers. It
has planned to introduce an incentive scheme- either Halsey or Rowan scheme for
increasing labour productivity and the increased productivity for the product by
25%. By introducing the incentive scheme the SSI unit expects a 20% increase over
the present earning of the workers( assurance given to workers) .
As a result of the scheme, the following outcomes have been observed
Hourly rate of wages (guaranteed) Rs.2.00
Average time for producing 1 piece by one worker at the previous performance 2
hours
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(this time is to be considered as time allowed for the purpose of the incentive
scheme)
No. of working days in a month -25 days
No of working hours per day for each worker – 8 hours
Actual production during the month – 625 nos.
You are required to (a) Calculate the effective rate of earning per hour under Halsey
scheme and Rowan Scheme (b) Calculate the savings in terms of direct labour cost
per piece under the above schemes. (c) Advise the SSI unit about the selection of the
scheme to fulfill its assurance to workers
SECTION – D
IV) Compulsory Question. (15 marks)
24. A transport company operates a 4 buses in a route covering 35 kms. Cost of
each vehicle is Rs.20,00,000 (fuel efficiency 6 Kms per liter ). The annual charges are
Insurance Rs.2,85,000
Road tax Rs.1,40,000
Garage rent Rs.52,000
Cost of repairs Rs.67,000
Expenses on tires and tubes Rs.11,200 pm
Office expenses Rs.14,000 pm
Cost of fuel (diesel) Rs.54 per liter
Drivers salary Rs.7,500 pm
Conductors salary Rs.6,000 pm
In addition the driver and conductor are entitled to 3.5% commission on ticket sale.
Effective life of each vehicle is 10 years with a scrap value of Rs.50,000 at the end. Each
bus has 50 seats and is expected to run 6 two way trips ( round trip) for 30 days in a
month (including 4 Sundays where the bus runs at 75% capacity). calculate the
passenger fare structure for approval by transport authorities who allow 15% profit on
net sales. Interest on loan is allowed on vehicle cost which amounted to Rs.6,50,000 p.a.

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