Loyola College B.B.A. Business Administration April 2007 Adv. Cost Management Accounts Question Paper PDF Download

             LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.B.A. DEGREE EXAMINATION – BUSINESS ADMINISTRATION

MS 22

SIXTH SEMESTER – APRIL 2007

                                       BU 6600 – ADV. COST MANAGEMENT ACCOUNTS

 

 

 

Date & Time : 16-04-2007/9.00-12.00           Dept. No.                                                       Max. : 100 Marks

 

SECTION-A

(Answer all questions)                           (10×2=20)

1.What do you understand by memorandum reconciliation statement?

2.Identify any four industries in which batch costing is employed.

3.What do you mean by cost plus contracts?

4.Calculate the total Kms and passenger Kms from the following.

Number of buses           – 5

Trips made by each bus (round)-4

Distance of route – 20 kms (one way)

Days operated in a month –25

Capacity in each bus- 50 passengers

Normal passengers travelled- 90% of capacity.

5.Mention the cost units used under the following cases.

  1. i) Goods transport ii) Hospitals.

6.State the various methods of preparing sales budget.

7.Define “Standard cost”

8.What is Capital Budgeting?

9.What are the advantages of N.P.V.?

10.Calculate the material usage variance from the following;

Standard             : 400 units at Rs.10 each.

Actual                 : 360 units at Rs.7 each.

 

SECTION-B

(Answer any five questions, choosing not less than TWO from each group)            (5×8=40)

GROUP-I

11.Write short notes on the following:

  1. a) Abnormal loss b) Operating costing c) Job costing d) Valuation of work in progress

in contract  costing.                                                                                 .                          12.The following is the profit&loss a/c of “V”-Ltd

 

Particulars     Rs     Particulars      Rs
To Materials

To Wages

To Factory expenses

To Administration        expense

To Selling expenses

To Depreciation

To Net profit

 

     30,000

14,000

10,000

 

8,000

6,000

2,000

45,000

1,15,000

By sales

By Closing stock

By Profit on sale of machinery

By Discount received

 

 

 

 

1,00,000

8,000

 

2,000

5,000

 

 

 

1,15,000

 

Additional information;

  • Profit as per cost accounts was Rs.37,000
  • Factory overhead is absorbed in cost accounts at 100 % of wages.
  • Administration and selling expenses were recovered at 5% and 7% on

Sales respectively.

  • Depreciation was charged in costing at Rs.3,000.
  • Closing stock was valued at Rs.10,000 in cost accounting.

You are required to prepare a reconciliation statement of cost and financial profits.

 

13.From the following particulars, calculate the cost of running a taxi per kilometer.

Number of Taxis          -10

Cost of each taxi          – Rs.2,00,000.

Salary of manager        – Rs.6,000 p.m.

Salary of accountant     – Rs.5,000 p.m.

Salary of cleaner           – Rs.2,000 p.m

Salary of mechanic       – Rs.4,000 p.m

Garage rent                   – Rs.6,000 p.m.

Insurance premium       –  5% p.a.

Annual tax                    – 6,000 per taxi

Drivers salary               – 2,000 per month per taxi.

Annual repair                – 10,000 per taxi.

Total life of a taxi is about 2,00,000 kms. A taxi  runs in all 3,000 kms in a month

Of which30% is empty. Petrol consumption is one litre for 10 k.m at Rs.18

Per litre. Oil and other  sundries are Rs.50 per 100 kms.

14.From the following particulars, prepare a cost sheet showing both production and

Setting up costs, total and per unit,When  the batch consists of 200 units;

Cost of materials 12-paise per unit.

Operator’s wages Rs.1.44 an hour.

Machine hour rate.Rs.3

Setting up time of machine 4 hours and 40 minutes .

Manufacturing time 20 minutes per unit.

GROUP-II

15.Write short notes on the following.

  1. Key factor b) Budgetary control c) Pay-back period d) IRR.

16.From the following particulars given below, calculate the following labour variances

for the two departments.

  1. a) Labour cost variance b) Labour rate variance c) Labour efficiency variance.

 

 

      Department-A Department-B
 Actual gross wages (direct)

Standard hours produced

Standard rate per hour

Actual hours worked

      Rs.20,000

8,000

Rs.3

8,200

 Rs.18,000

6,000

Rs.3.50

5,800

 

 

17.The following particulars are taken from the records of the company engaged in

manufacturing two products X and Y from a certain raw material.

 

Product-X (Rs.per unit) Product-(Rs.per unit)
Sales                 Materials(Rs.2.5 per k.g)  Wages (Rs.15 per hour)

Variable overhead

 

 

                  125.00

25.00

37.50

12.50

         250.00

62.50

75.00

25.00

 

Total fixed overheads Rs.50,000

Comment on the profitability of each product when

  1. Total availability of raw material is 20,000 kgs and maximum sales potential

Of each product is 1,000 units. Find out the product mix to yield maximum profit.

  1. Total sales in value is limited
  2. Labour time is limited.
  3. Production capacity in units is a key factor.

 

18.A company sells two products A and B which are produced  in its special products

division. Sales for the year 2006 were planned as follows.

1-st Qr(units)   2nd Qr(units)  3rd   Qr (units)

 

4th Qr(units)
Product-A

Product-B

    10,000

5,000

     12,000

4,500

     13,000

4,000

 

   15,000

3,800

 

The selling prices were Rs.20 per unit and Rs.50 per unit respectively for A and B. Average sales returns are 5% of sales and the discount and bad debts amount to 4%

Of the total sales.

Prepare sales budget for the year 2006.

 

SECTION-C

(Answer any TWO Questions  )                          (2×20=40)

19.a) Three contracts X,Y and Z commenced on 1-stJanuary ,1stjuly and 1stOctober 2006,

respectively were undertaken by ELLORA Constructions Ltd, and their accounts on 31-st Dec.

showed the following position;

     X

(Rs)

    Y

(Rs)

     Z

(Rs)

Contract price

Expenditure;

Raw material

Wages

General expenses

 

Plant purchased

Materials in hand

Wages accrued

Work certified

Work uncertified

Cash received in respect of work certified

 

8,00,000

 

1,44,000

2,20,000

8,000

 

40,000

8,000

8,000

4,00,000

12,000

3,00,000

 

5,40,000

 

1,16,000

2,24,800

5,600

 

32,000

8,000

8,000

3,20,000

16,000

2,40,000

 

6,00,000

 

40,000

28,000

2,000

 

24,000

4,000

3,600

72,000

4,200

54,000

 

T he plant was installed on the date of commencement of each contract ,depreciation

is to be taken at 10% per annum.                                                                                        Prepare the contract accounts in Tabular form and show   how they would appear in the Balance sheet as on Dec.2006.

OR

19.b)A product passes through three processes. The following details are related to the

processes during-Dec-2006.

 

     Total Process-I Process-II Process-III
Materials(Rs)

Labour (Rs)

Production overhead (Rs)

Output (units)

Normal loss (%-of input)

Scrap value

     5,625

7,330

7,330

      2,600

2,250

450

10

2

 

 

     2,000

3,680

340

20

4

    1,025

1,400

270

25

5

 

 

 

500 units @Rs.4 per unit were introduced in process-I. Production overhead is absorbed in the ratio of labour.

Prepare process accounts and abnormal loss and abnormal gain accounts.

 

20.a) From the following particulars , prepare a cash budget for 6 months .

Months Total sales

Rs

Materials

Rs

  Wages

Rs

Production over

head

Rs

Selling and

Dist.overhead

Rs

Jan

Feb

March

April

May

June

 

  20,000

22,000

24,000

26,000

28,000

30,000

  20,000

14,000

14,000

12,000

12,000

16,000

    4,000

4,400

4,600

4,600

4,800

4,800

     3,200

3,300

3,300

3,400

3,500

3,600

 

      800

900

800

900

900

1,000

Cash balance on 1-st jan. was Rs.10,000. A new machine is to be installed at Rs.30,000 On credit, the amount to be repaid by two equal instalments in March and April.

 

Sales commission at 5% on total sales is to be paid within the month following actual

Sales.Rs.10,000 being amount of 2nd call may be received in march. Share premium                     amounting to Rs.2,000 is also obtained with 2nd call.

 

Period of credit allowed by suppliers-2 months

Period of credit allowed to customers-1 month.

Delay in payment of overheads-1month.

Delay in payment of wages-1/2 month.

Assume cash sales to be 50% of the total sales.

(OR)

20.b) J& co is planning to invest in a project which requirea a capital outlay of

Rs.4,00,000. Forecast for annual income after depreciation but before tax is as

Follows.

 

 

     Year          Rs
       1

2

3

4

5

   2,00,000

2,00,000

1,60,000

1,60,000

80,000

Depreciation may be taken as 20% on original cost and taxation at 50% of net income.

You are required to evaluate the projects according to each of the following methods.

  1. Pay- back period b) Rate of return on original investment c)Rate of return on average investment d)Discounted flow method taking cost of capital at 10%.
  2. Excess present value method.

 

Note;

The discount factor at 10% for the first 5-years are ; 0.909, 0.826,0.751,0.683 and

0.621.

 

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