LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.B.A. DEGREE EXAMINATION – BUSINESS ADMINISTRATION
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FIFTH SEMESTER – April 2009
BU 5501 – COST & MANAGEMENT ACCOUNTING
Date & Time: 17/04/2009 / 9:00 – 12:00 Dept. No. Max. : 100 Marks
SECTION-A
(Answer All Questions) (10x 2=20)
1.Define a cost center.
2.Write a note on EOQ?
3.What is a Bincard?
4.Explain the term “labour turnover”
5.From the following figures, calculate EOQ and number of orders to be placed in a year
Annual consumption of material -4000 units
Cost of buying per order –Rs.5
Cost per unit –Rs.2 per unit
Storage and carrying cost – 8% on average inventory.
6.Define the term ‘fund’
7.What is P/V ratio
8.Explain the meaning and significance of ‘current ratio’
9.From the following, calculate Stock Turnover ratio:
Opening Stock Rs. 40,000
Closing Stock Rs. 44,000.
Sales Rs. 4,15,000
Gross profit ratio – 20%
10.Selling price per unit: Rs.10
Variable cost per unit: Rs.7.5
Fixed cost ; Rs.2,00,000
Budgeted profit : Rs.50,000
How many units must be sold to earn budgeted profit?
SECTION –B (5×8=40)
(Answer any FIVE questions, choosing not less than TWO questions from each group)
GROUP –I
11.Explain the meaning and purposes of preparing cost sheet.
12.Two components X and Y are used as follows:
Minimum usage :50 units per week each
Maximum usage ;150 units per week each
Normal usage :100 units per week each
Ordering quantities :X-600 units Y-1000 units
Delivery periods :X – 4 to 6 weeks Y-2 to 4 weeks
Maximum reorder period for emergency purchases X: 2 weeks Y: 2 weeks
Calculate for each component:
a)Reorder Level
b)Maximum Level
c)Minimum Level
d)Danger Level
13.On the basis of the following information, calculate the earnings of A and B under straight
piece Rate system and Taylor’s Differential Piece-rate System:
Standard production-8 units per hour
Hourly rate- Re.0.40 per hour
Differential to be applied:
80% of piece-rate below standard
120% of piece-rate at or above standard
In a nine-hour day, A produces 54 units and B produces 75 units
14.In a factory, there are two service departments P & Q and three production departments A,
B and C. In April 2008, the departmental expenses were:
A- Rs.6,50,000 B- Rs.6,00,000 C- Rs.5,00,000
P- Rs.1,20,000 Q- Rs.1,00,000
The service department expenses are allocated on a percentage basis as follows:
Service departments A B C P Q
P 30% 40% 15% – 15%
Q 40% 30% 25% 5% –
Prepare secondary distribution summary under Simultaneous equation method
GROUP-II
15.Distinguish between Cost Accounting and Management Accounting
16.Write short notes on the following:
a)Cash from operation
b)Solvency Ratios
c)Marginal Cost
d)Break Even Analysis
17.From the following Balance Sheets you are required to prepare a Cash Flow Statement
Liabilities 2007 2008 Assets 2007 2008
Rs Rs Rs Rs
Share Capital 3,00,000 3,50,000 Land 70,000 86,000
Profit &Loss a/c 20,000 33,000 Stock 90,000 1,00,000
Current Liabilities 90,000 65,000 Debtor 1,20,000 1,15,000
Cash 1,30,000 1,47,000
————- ———– ————– ————-
4,10,000 4,48,000 4,10,000 4,48,000
—————————————————————————————————–
–
18.The following are obtained from the records of a factory
Sales(4000 units @ Rs.25 each) Rs. 1,00,000
Variable cost Rs 72,000
Fixed cost Rs 16,800
Calculate a) P/V ratio b)Break-even Sales c)Margin of safety
- d) What additional units should be sold to obtain the same amount of profit if the
selling price is reduced to Rs.20
SECTION-C
(Answer any TWO questions 2×20=40)
19.a)The following figures have been obtained from the costing records of R.Ltd. for the year 2007. Rs Rs
Cost of material 2,40,000 Administrative Expenses 1,34,400
Wages for Labour 2,00,000 Selling Expenses 89,600
Factory Overhead 1,20,000 Profit 1,68,000
Distribution Expenses 56,000
A work has been executed in 2008 and the expenses have been incurred- Cost of the material Rs.32,000 and Wages for labour Rs.20,000.
Assuming that in 2008 the rate for Factory overhead went up by 20%, distribution expenses went down by 10% and selling and administration charges up by 12.5%, at what price should the order be quoted so as to earn the same rate of profit on the selling price? Show the full working. Distribution, Administration and Selling charges are based on Factory cost.
(or)
19.b)Prepare a stores ledger using a)Weighted Average Method
b)FIFO Method of material issue
2007
March 1 Balance 1,000 units @ Rs.70 per unit
- Purchased 2,000 units @ 80 per unit
- Issued 500 units
- Issued 1,000 units
15 Purchased 2,000 units at Rs.80 per unit
- Issued 400 units
- Received back 25 units out of the issue made on 5th March
- Issued 1,500 units
- Returned to supplier 30 units out of purchases made on 15th March
- Purchased 1,000 units at Rs.75 per unit
- Issued 1,000 units.
Physical verification on 21st March revealed a shortage of 15 units and 20 units shortage on 30th March.
20.a) From the following financial statements of X.Ltd. calculate
i)Current ratio ii)Liquid ratio iii)Gross profit ratio iv)Net profit ratio v)Net profit to capital employed vi)Fixed asset turnover ratio vii)Sales to capital employed viii)Debtor turnover ratio
Income Statement for the year ending 2007
Particular Rs Rs. ————————————————————————–
Sales:
Cash 64,000
Credit 6,84,000
———— 7,48,000
Less: Cost of sales 5,96,000
————-
Gross Profit 1,52,000
Less: Expenses:
Warehouse and transport 48,000
Administration 38,000
Selling 28,000
Debenture interest 4,000 1,18,000
————————————
Net Profit 34,000
Balance Sheet as on 31-12-2007
———————————————————————————————————
Liabilities Rs. Assets Rs.
Share Capital 1,50,000 Fixed Asset(net) 80,000
Reserves 60,000 Current Asset
Profit &Loss 24,000 Stock 1,88,000
Debenture 60,000 Debtor 1,64,000
Current Liabilities 1,52,000 Cash 14,000
———– ———
4,46,000 4,46,000
(or)
20.b)Following are the Balance sheets of A Ltd as on 31st Dec. 2006 & 2007
Liabilities Rs Rs Assets Rs Rs
2006 2007 2006 2007
Share Capital 1,00,000 1,50.000 Land &Building 1,00,000 90,000
General reserve 50,000 60,000 Plant&Machine 1,00,000 1,19,000
Profit&Loss 30,500 30,000 Stock 50,000 24,000
Bank Loan 70,000 – Debtor 75,000 63,000
Sundry Creditor 50,000 37,200 Cash 500 1,200
Provision for Tax 32,000 35,000 Bank 2,000 15,000
Goodwill 5,000 –
3,32,500 3,12,200 3,32,500 3,12,200
Additional information
i)Dividend of Rs.23,000 was paid during 2007. ii) Depreciation written off on building Rs10,000 and Machinery Rs.14,000. ii) Income tax paid during the year Rs.28,000.
Prepare a Fund Flow Statement for 2007.
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