LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

# OA 10

FIFTH SEMESTER – November 2008

# BU 5504 – COST ACCOUNTING

Date : 07-11-08                     Dept. No.                                        Max. : 100 Marks

Time : 9:00 – 12:00

SECTION –A                                                (10X2=20 MARKS)

1. What is cost sheet?
2. What do you mean by Defectives?
3. Define inventory control?
4. How do you classify overheads?
5. What is process costing?
6. Calculate the total earnings of a worker under Halsey plan

Standard time        – 30 hours

Time taken             – 20 hours

Hourly rate of wages is Re 1 per hour plus D.A @ 50 paise per hour worked.

1. Find out the economic order of quantity with the help of following details :-

Monthly usage                                                       : 500 units

Cost of materials per unit                                         : Rs 20

Cost of placing and receiving one order                  : Rs 60

Annual carrying cost                                          : Rs 2 per unit

1. Compute the depreciation chargeable to each department:

Depreciation Rs 27500

Machinery value in the departments:

X- Rs 200,000,      Y- Rs 400,000,            Z- Rs 500,000.

1. Calculate profits as per financial accounts

Profit as per cost accounts                                    Rs. 60,000

Overheads recovered in costing                            Rs. 3,500

Under absorption of expenses in costing              Rs. 6,000

Income tax debited in financial                            Rs. 4000

1. Calculate the materials purchased during the year

Rs

Direct wages                                                         60,000

Prime cost                                                             110.000

Opening stock of raw materials                             20,000

Closing stock of raw materials                               25,000

Expenses on purchase                                            15,000

SECTION- B                                     (5×8=40 marks)

1. What are the effects of labour turn over?
2. What are the limitations of cost accounting?
3. Explain ABC analysis? What are its advantages?

1. From the following, prepare stores ledger under FIFO method:

JAN 1 opening balance at Rs 5 each

2 received 500 units of Rs 4each

10 issued 300 units

15 issued 200 units

26 received 500 units of Rs 5.50 each

27 issued 300 units

31 issued 250 units

1. From the following information, calculate kilometers and total passenger kilometers:

No . Of buses                                : 4

Days operated in a month             : 30

Round trips made by each bus      : 4

Distance of route                          :30 km long (one way)

Capacity of bus                             : 60 passengers

Normal passengers traveling         : 80% of the capacity

1. Calculate re-ordering level, minimum stock level , maximum stock level and average stock level:

Maximum consumption                – 150 units per day

Minimum consumption                 – 100 units per day

Normal consumption                     – 120 units per day

Re-order period                             – 10-15 days

Re- order quantity                         – 1500 units

Normal re- order period                – 12 days

1. Work out the normal and over time wages payable to a worker from the following:

Days                            Hours worked

Monday                                   8

Tuesday                                   10

Wednesday                              9

Thurs day                                11

Friday                                    9

Saturday                                  4

Normal working hours                        – 8 hours per day

Normal rate                                         – Rs 2 per hour

Over time rate                                     – double the usual rate

1. Compute the machine hour rate from the following :

Cost of machine                                        : Rs 10,000

Scrap value after 10 years                         : Rs 2,000

Rent for a quarter for the department       : RS 300

General lighting                                        : Rs 240 p.a

Department supervisor’s salary                 : Rs 600 per quarter

Insurance premium for machine                : R s 60 p.a

Repairs                                                      : Rs 100 p.a

Power 2 units per hour at Rs 5 per 100 units

Estimated working hours p.a 2000

Machine occupies 1/4th of the total area in the department .The supervisor devotes 1/6th time for this machine.

SECTION- C                                                 (2X20= 40 MARKS)

1. From the following, prepare a cost sheet.

Materials                           – Rs 80,000

Direct wages                     – Rs 48,000

Machine hours worked     – 8,000

Machine hour rate             – Rs 4

Office overheads              – 10% on work cost

Selling overheads              – Rs 1.50 per unit

Units produced                 – 4000

Units sold                          – 3,600 units @ Rs 50 each

1. A product passes through 3 stages from the following prepare process accounts and abnormal gains and abnormal loss a/c
 Particulars Process I (Rs) II (Rs) III (Rs) Raw material 2600 1980 2962 Direct wages 2000 3000 4000 Selling price of scrap (Per Unit) 2 4 5 Normal loss 5% 10% 15% production 950units 840 units 750 units

General expenses Rs 9,000 which absorbed on the basis of wages . 1000 units at Rs 3 each introduced into process I.

1. A company’s informations related to a contract are given below. Prepare a contract account and also show how entries appear in balance sheet of the company:

Particulars                                                              Rs

Materials sent to site                                             85,349

Labour engaged on site                                         74,375

Plant installed at site                                             15,000

Direct expenditure                                                            3,167

Establishment charges                                           4,126

Materials returned to stores                                  549

Work certified                                                       195,000

Cost of work not certified                                     4,500

Material in hand at the end of year                       1,883

Wages accrued for the year                                  2,400

Direct expenses accrued                                       240

Value of plant at the end of the year                    11,000

Contract price agreed                                            250,000