| REG NO: |
- JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)
END SEMESTER EXAMINATION – MARCH/APRIL 2016
B.Com (BPM) –II Semester
C3 15MC202: COST ACCOUNTING
Duration: 3 Hours Max. Marks: 100
SECTION – A
- Answer the following questions. Each carries 2 marks. (10×2=20)
- Differentiate ‘Apportionment of overheads ‘with ‘Absorption of overheads’.
- Mention the reasons for difference between ‘Cost Accounting and ‘Financial Accounting’ profits.
- How do you differentiate ‘Cost’ from an ‘Expense’?
- Explain ‘Overhead recovery rates’.
- What do you understand by Fixed cost, Variable cost and Semi-Variable Costs?
- Give the meaning of ‘Carrying Costs’ and ‘Ordering Costs’?
- What do you understand by ‘Differential Piece Rate system’ of remuneration?
- Suggest suitable costing methods for following industries
(a) Transport company (b) Cotton textiles (c) Hospital (d) Pharmaceuticals
- Explain the meaning of ‘Imputed Costs’.
- What is a ‘Goods Received Note’ and ‘Material Requisition Slip’?
SECTION – B
- Answer any FOUR questions. Each carries 5 marks. (4×5=20)
- On the basis of the following information calculate the earnings of two workers Shiva and Rama under the straight piece rate system and Taylor’s Differential piece Rate system.
Standard Production: 10 units per hour
Normal time rate : Rs.50 per hour
Differential Piece rate to be applied
80% of piece rate for below standard performance
120% of piece rate for performance at or above the standard
Actual performance
Shiva produced 75 units in a day of 10 hours
Rama produced 115 units in a day of 10 hours
- From the following particulars, prepare a statement of cost of manufacture for the year 2014 and show what percentage each individual item of cost bears to the total cost. Calculate factory on cost at 20% on prime cost and office on cost at 80% on factory cost.
| Rs. | |
| Opening stock of raw material | 1,44,000 |
| Purchase of raw materials | 8,64,000 |
| Stock of raw materials at end | 2,16,000 |
| Wages | 3,60,000 |
- Prime enterprises have separate cost and financial records. The profit as per financial records arrived at Rs.1,60,000. The following information is available:
- The firm received Rs.40,000 as dividend and paid Rs.30,000 as Bank interest during the year.
- A plant with a book value of Rs.80,000 was sold for Rs.40,000
- Cash discount allowed Rs.70,000
- The firm made a notional rent charge of Rs.24,000 in cost Accounts in respect of its own premises.
- The actual factory overheads incurred amounted to Rs.5,60,000 but only Rs.5,00,000 were recovered in cost accounts on the basis of percentage of direct wages.
- Stock values
| Financial a/c ‘s | Cost a/c’s | |
| Opening stock of raw materials | 44,000 | 48,000 |
| Opening stock of finished goods | 86,000 | 82,000 |
| Closing stock of raw materials | 70,000 | 80,000 |
| Closing stock of finished goods | 80,000 | 88,000 |
Prepare the statement of reconciliation and ascertain the cost accounting profit.
- Prepare stores ledger a/c showing the receipts and issues, pricing materials issued on the basis of: Simple average method
Receipts
1-1-2014 opening stock 800 units at Rs.7.00 per unit
3-1-2014 purchased 1200 units at Rs.8.00 per unit
13-1-2014 purchased 3600 units at Rs.8.60 per unit
23-1-2014 purchased 2400 units at Rs.7.60 per unit
Issues
5-1-2014 issued 1600 units
15-1-2014 issued 2400 units
- issued 2400 units
- A manufacturing concern has 2 production departments A and B and three service departments – time keeping, stores and maintenance. The departmental summary showed the following expenses for December
| Rs. | Rs. | |
| Production Departments
A B |
32,000 20,000 |
52,000 |
| Service Departments | ||
| Time Keeping | 8,000 | |
| Stores | 10,000 | |
| Maintenance | 6,000 | 24,000 |
| 76,000 |
Other Information
| A | B | Time keeping | Stores | Maintenance | |
| No of employees | 20 | 15 | 10 | 16 | 5 |
| Stores requisition | 24 | 20 | 6 | ||
| Machine hours | 2400 | 1600 |
Prepare secondary distribution summary using STEP LADDER METHOD
- What are the essentials of a good wage system?
SECTION – C
- Answer any THREE questions. Each carries 15 marks. (3×15=45)
- From details furnished below you are required to compute the machine hour rate ( work is done in the factory by means of 5 similar machines)
| Rs. | |
| Rent and rates ( proportional to the floor space occupied) for the shop | 4,800 |
| Depreciation on each machine | 500 |
| Repairs and maintenance for the five machines | 1,000 |
| Power consumed @ 5p. per unit for the shop | 3,000 |
| Electric charges for lighting in the shop | 540 |
| There are 2 attendants for the five machines and they are paid Rs. 60 per month | |
| For 5 machines in the shop there is one supervisor whose emoluments are Rs.250 pm | |
| Sundry supplies such as lubricants for the shop | 450 |
| Hire purchase installment payable for the machine
(including Rs.300 as interest) |
1,200 |
The machine uses 10 units of power per hour
- International Motors manufacture crankshafts for Jeeps and Trucks. They have furnished the following particulars for the quarter ended 31st March 2007.
Materials Rs.2,98,000; Direct wages Rs.42,000; Stores Expenses Rs.20,000; Machinery Maintenance Rs.4,600; Depreciation Rs.22,300; Staff Welfare Rs.12,000; General expenses Rs.30,000; Administration and Selling expenses Rs.27,000
Additional information provided by them
| Jeep | Truck | |
| Production (nos) | 300 | 400 |
| Material Cost ratio per vehicle | 1 | 2 |
| Direct Labour hour ratio | 2 | 3 |
| Machine hour ratio | 1 | 2 |
Calculate the cost per crankshaft of each vehicle indicating the basis of apportionment adopted.
- The following are the details of a company, prepare the cost sheet for the year ended
31-12-2010
| Particulars | Amount (Rs) |
| Direct materials | 3,40,000 |
| Direct wages | 2,00,000 |
| Works overheads | 1,20,000 |
| Profit | 2,10,000 |
| Administrative overheads | 1,34,400 |
| Selling overheads | 89,600 |
| Distributions overheads | 56,000 |
A work order had been executed for 2011 and the following expenses have been incurred.
Direct Materials Rs.4000
Direct Wages Rs.2000
Assuming that the rate of factory overheads has gone up by 20%, distribution overheads has gone down by 10% and selling and administrative overheads has gone up by 12.5%, at what price should the product be sold so as to earn the same rate of profit on the selling price.
- In a factory there are two service departments S1 and S2 and three production departments P1, P2 & P3. In July 2014, the departmental expenses were
| Departments | P1 | P2 | P3 | S1 | S2 |
| Rs. | 13,00,000 | 12,00,000 | 10,00,000 | 2,40,000 | 2,00,000 |
The Service departments expenses were allotted on percentage basis as follows :
| Service Departments | P1 | P2 | P3 | S1 | S2 |
| S1 | 30 | 40 | 15 | — | 15 |
| S2 | 40 | 30 | 25 | 5 | — |
Prepare a statement showing the distribution of the two service departments expenses to the three departments by (a) Simultaneous Equation method
(b) Repeated distribution Method.
- The standard time to complete a product is 12 hours at Rs.2.50 per hour.
Time wages are allowed to workers taking more than the time allowed. But workers who complete the job in standard time or less receive the piece work rate plus 10% bonus. Calculate the wages earned by A, B, C and D who complete the job in 15, 12, 10 and 8 hours respectively. What will be effective hourly rate?
If the overhead rate chargeable production is Re.0.50 per hour, what will be the cost of conversion ( labor and overheads) per piece produced by each worker.
SECTION – D
- Compulsory question (15 marks)
- The cost structure of an article, the selling price of which is Rs.500, is as follows
Direct Material : 50% of total cost
Direct Labour : 30% of total cost
Overheads : Balance amount
Due to anticipated increase in existing material price by 20% and in the existing labour by 10% the existing profit would come down by 30%, if the selling price remains unchanged.
Prepare a comparative statement showing the cost, profit and sale price under the present conditions and with the increase expected for future assuming the same percentage of profit on cost as at present had to be earned. (Calculations to be made to the nearest rupee).
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