Loyola College B.Com Corporate & Secretaryship Nov 2010 Cost Accounting Question Paper PDF Download

October 23, 2017 by 01 prakash

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – CORPORATE SEC.

FIFTH SEMESTER – NOVEMBER 2010

BC 5501/CR 5501 – COST ACCOUNTING

Date : 01-11-10 Dept. No. Max. : 100 Marks

Time : 9:00 – 12:00

SECTION – A

Answer ALL the questions: (10 x 2 = 20 marks)

Define Cost Accounting.
a) The method of costing used in a refinery is —————.
b) Cost Accounting records both monetary and ————– units.
Prepare a chart showing the different elements of cost.
From the following calculate the cost of goods sold: Cost of production `. 1,83,500;

Opening stock of finished goods `71,500; Closing stock of finished goods `.42,000.

A publishing house purchases 10,000units of a particular item per year at a unit cost

of ` 40. The ordering cost per order is Rs.100 and the inventory carrying cost is 25%

The worker completes a job in a certain number of hours. The standard time allowed

for the job is 8 hrs and the hourly rate of wages is` 10. The worker earns at the 50%

rate a bonus of ` 20 under Halsey plan. Ascertain his total wages under the Rowan

Premium Plan.

What do you mean by a ‘Machine Hour Rate’?
What is Idle time
Mention the bases of apportionment of the following expenses of departments:
a) Plant depreciation b) Lighting c) Power d) Consumable stores
Record the following transaction in stores ledger, price the issues at weighted average

rate: 200 units received at` 2.00 per unit on 2^nd September, 300 units received at

` 2.40 per unit during 15^th September and 250 units issued on 20^th September.

SECTION B ANSWER ANY FIVE (5 x 8 =40)

“While Financial Accounting is external, Cost Accounting is internal to the business”-

Explain this statement by bringing out the difference between Cost and Financial

Accounting.

Discuss the Secondary distribution of Overheads with illustrations.
Write short notes on a) Retention money b) Escalation clause c) Work in progress d) Target

costing.

A) Compute the (i) re-order level ; (ii) minimum level ; (iii) maximum level ; and (5)

(iv) average stock level for components A and B based on the following data:

Components

A B

Maximum consumption per week (in units) 250 200

Average consumption per week (in units) 150 100

Minimum consumption per week (in units) 100 50

Re-order period (in weeks) 6 to 10 5 to 9

Re-order quantity (in units) 500 700

B) Discuss the methods of pricing issue of materials. (3)

From the following figures prepare a Reconciliation Statement:

Net loss 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 12,500

Interest received not included in costing 8,000

Obsolescence loss charged in financial records 5,700

Income-tax provided in financial books 40,300

Bank interest credited in financial books 750

Stores adjustments (credit) in financial books 475

Value of opening stock in : Cost Accounts 52,600

Financial Accounts 54,000

Value of closing stock in : Cost Accounts 52,000

Financial Accounts 49,600

Interest charged in cost accounts but not in financial accounts 6,000

Preliminary expenses written off in financial accounts 800

Provision for doubtful debts in financial accounts 150

Construction Ltd. Is engaged on two contracts A and B during the year.

The following particulars are obtained at the year end (Dec. 31) :

Contract A Contract B

Date of Commencement April 1 September 1

`. `.

Contract price 6,00,000 5,00,000

Materials issued 1,60,000 60,000

Materials returned 4,000 2,000

Materials at site (Dec. 31) 22,000 8,000

Direct Labour 1,50,000 42,000

Site Expenses 66,000 35,000

Establishment Expenses 25,000 7,000

Plant installed at site 80,000 70,000

Value of plant (Dec. 31) 65,000 64,000

Cost of contract not yet certified 23,000 10,000

Value of contract certified 4,20,000 1,35,000

Cash received from contractee 3,78,000 1,25,000

Architect’s Fees 2,000 1,000

During the period materials amounting to Rs. 9,000 have been transferred from contract A to contract B. you are required to show : (a) Contract accounts, (b) Contractees’ accounts, and (c) Extract from Balance Sheet as on December 31, clearly showing the calculation of work- in-progress.

A) From the following details of stores receipts and issues of material in a manufacturing

unit, prepare the Stock ledger using LIFO method. (5)

April 1 Opening Stock 2000 units @ ` 5.00 each

3 Issued 1,500 units to production

4 Received 4,500 units @ ` 6.00 each

8 Issued 1,600 units to production

Returned to stores 100 units by production department (from the issue of April 3)

16 Received 2,400 units @ ` 6.50 each

19 Returned to supplier 200 units out of the quantity received on April 4^th.

20 Received 1,000 units @ ` 7.00 each

24 Issued to production 2,100 units

27 Received 1,200 units @ ` 7.50 each

29 Issued to production 2,800 units

B) Discuss the relative merits and demerits of two of the main methods of remunerating

labour. (3)

Jaidka owns fleet of taxi and the following information is available from the records

maintained by him :

Number of taxis 10

Cost of each taxi `20,000

Salary of manager `600 p.m.

Salary of accountant ` 500 p.m.

Salary of cleaner `. 200 p.m.

Salary of mechanic `400 p.m.

Garage rent ` 600 p.m.

Insurance premium 5% per annum

Annual tax `600 per taxi

Driver’s salary `200 p.m. per taxi

Annual repair `1,000 per taxi

Total life of a taxi is about 2,00,00 kms. A taxi runs in all 3,000 kms. in a month of which 30% it runs empty. Petrol consumption is 1 litre for 10 kms. @ `1.80 per litre. Oil and other sundries are ` 5.00 per 100 kms.

Calculate the cost of running a taxi per km.

SECTION-C

ANSWER ANY TWO ( 2 x 20 = 40 marks)

Modern Manufacture Ltd., have three production departments P₁, P₂, P₃ and two Service

Departments S₁ and S₂, the details pertaining to which are as under :

P₁ P₂ P₃ S₁ S₂

Direct wages (`) 3,000 2,000 3,000 1,500 195

Working Hours 3,070 4,475 2,419 – –

Value of Machines (`) 60,000 80,000 1,00,000 5,000 5,000

H.P. of Machines 60 30 50 10 –

Light points 10 15 20 10 5

Floor Space (sq. ft.) 2,000 2,500 3,000 2,000 500

The following figure extracted from the accounting records are relevant :

Rent and Rates `5,000, General Lighting `600, Indirect Wages `1,939 ; Power `1,500 ; Depreciation on Machines `10,000 and Sundries ` 9,695.

The expenses of the Services Departments are allocated as under :

P₁P₂ P₃S₁S₂

S₁20% 30% 40% – 10%

S₂ 40% 20% 30% 10% –

Find out the total cost of product ‘X’ which is processed for manufacture in Department P₁, P₂ and P₃for 4,5 and 3 hours respectively, given that its Direct Material Cost is `50 and Direct Labour Cost ` 30.

20) Product B passes through three processes before it is transferred to finished stock. The following information is obtained for the month of March :

Details Process `Finished Stock

I II III

` ` ` `

Opening Stock 5,000 8,000 10,000 20,000

Direct Material 40,000 12,000 15,000 –

Direct Wages 35,000 40,000 35,000 –

Production Overheads 20,000 24,000 20,000 –

Closing Stock 10,000 4,000 15,000 30,000

Profit % on Transfer price 25% 20% 10% –

(to next process)

Inter-process Profit for

Opening Stock – 1,395 2,690 6,534

Stock in process accounts are valued at Prime cost and finished stock has been valued at the price at which it is received from Process III. Sales during the period were Rs. 4,00,000.

Prepare and compute :

Process cost accounts showing profit element at each stage ;
Actual realized profit ; and
Stock valuation for Balance Sheet purpose.

21) Following information has been obtained from the records of a Manufacturing Company :

1-1-2001 31-12-2001

` `

Stock of raw materials 40,000 50,000

Stock of finished goods 100,000 1,50,000

Stock of work- in-progress 10,000 14,000

Indirect Labour 50,000

Lubricants 10,000

Insurance on Plant 3,000

Purchase of Raw Materials 4,00,000

Sales Commission 60,000

Salaries of Salesmen 100,000

Carriage Outward 20,000

Administrative Expenses 1,00,000

Power 30,000

Direct Labour 3,00,000

Depreciation on Machinery 50,000

Factory Rent 60,000

Property Tax on Factory Building 11,000

Sales 12,00,000

Prepare a Statement of Cost and Profit showing

Cost of Production ;
Cost of Goods Sold ;
Cost of Sales ; And
Profit

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Loyola College B.Com Corporate & Secretaryship April 2011 Cost Accounting Question Paper PDF Download

October 23, 2017 by 01 prakash

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – CORPORATE SEC.

FIFTH SEMESTER – APRIL 2011

BC 5501 – COST ACCOUNTING

Date : 18-04-2011 Dept. No. Max. : 100 Marks

Time : 9:00 – 12:00

PART A

Answer ALL questions 10×2=20 marks

Explain the following terms: Q.nos.1-4

Opportunity cost

Idle time

Overtime wage

Retention money

State whether the following statements are TRUE or FALSE:
The cost of normal loss units are borne by the good units produced.
The cost unit for a goods transport service is cost per passenger kilometre.

Stock on 1^st January 500 units at Rs.10 per unit.

Purchases on 1^st January 14500 units at Rs.12 per unit.

On 31^st January the stock was 2000 units.

Compute the value of the stock on that date, if materials are priced under ‘Weighted average’ method.

Annual requirement is 1600 units. Cost per unit Rs.40. Ordering cost per unit is Rs.50; carrying cost 10% of inventory value. Calculate Economic Order quantity.

Time allowed for a job is 48 hours. Time taken by worker X is 40 hours. Time rate is Rs.5 per hour. Calculate the earnings of X under Halsey plan and Rowen plan.

Estimated machine hours per year 2000; estimated factory overheads per year Rs.10000; job 77 requires Rs.500 direct material and Rs.300 direct wages. It takes 10 machine hours to complete the job. Compute the factory cost of job 77.

500 units are introduced in process I, 300 units are completed and transferred to process II, 200 units 80% complete are in work-in-progress. If the total expenses of the process is Rs.23000, calculate the value of closing work-in-progress.

PART B

Answer ANY FIVE questions 5×8=40 marks

Discuss the advantages of Cost Accounting.

Define ‘labour turnover’. What are the causes for labour turnover? Explain any two methods for computing labour turnover.

A machine is purchased for cash at Rs.9,200. Its working life is estimated to be 18,000 hours after which its scrap value is estimated at Rs.200. it is assumed from past experience that:
The machine will work for 1,800 hours annually.
The repair charges will be Rs.1,080 during the whole period of life of the machine.

The power consumption will be 5 units per hour at 6 paise per unit.

Other annual standing charges are estimated to be:
Rent of department (machine 1/5^th) 780
Light (12 points in the dept – 2 points engaged in the machine) 288
Foreman’s salary (1/4^th of his time is occupied in the machine) 6000
Insurance premium (fire) for machinery 36
Cotton waste 60

Find out the machine hour rate on the basis of above data for allocation of the works expenses to all jobs for which the machine is used.

A transport service company is running 4 buses between two towns which are 50 kms apart. Seating capacity of each bus is 40 passengers. The following particulars are obtained from the records for the month of April 2010:

Rs.

Wages of drivers, conductors and cleaners 24,000

Salaries of office and supervisory staff 10,000

Repairs and maintenance 8,000

Taxes, insurance, etc. 16,000

Depreciation 26,000

Interest and other charges 20,000

The seating capacity utilised was 75%. All the four buses ran on all days of the months. Each bus had made one round trip daily. The bus consumes 1 litre diesel per 20 kms. The cost of diesel is Rs.10 per litre.

Calculate the fare per passenger-km, if the company wants a profit of 50% on cost.

Modern Constructions Ltd. has taken a contract on October 1, 2009. The position of the contract on September 30, 2010 is as follows:

Rs.

Contract price 27,00,000

Materials 5,80,000

Wages paid 9,64,000

Other expenses 24,000

Plant at site 1,60,000

Unused materials at site 40,000

Wages payable 36,000

Other expenses due 4,000

Cash received being 75% of works certified 12,00,000

Work completed but not yet certified 80,000

The plant at site is to be depreciated at 10%.

Material costing Rs.40000 was returned to stores.

Material costing Rs.10000 was stolen from the site.

Prepare the contracts accounts, showing the notional profit and also profit to be transferred to Profit and Loss account.

From the following information, prepare a cost sheet for the month of December 2010:

Rs.

Stock on hand – 1^st December 2010:

Raw materials 25,000

Finished goods 17,300

Stock on hand – 31^st December 2010:

Raw materials 26,200

Finished goods 15,700

Purchases of raw materials 21,900

Carriage on purchases 1,100

Work-in-progress, 1/12/2010 at works cost 8,200

Work-in-progress, 31/12/2010 at works cost 9,100

Sale of finished goods 72,300

Direct wages 17,200

Non-productive wages 800

Direct expenses 1,200

Factory overheads 8,300

Administration overheads 3,200

Selling and distribution overheads 4,200

Calculate the earnings of a worker under i) Halsey Plan (ii) Rowan plan and (iii) Piece rate system from the following particulars:
Hourly rate of wages guaranteed Rs.6 per hour
Standard time for producing one dozen articles – 3 hours
Actual time taken by the worker to produce 20 dozen articles – 48 hours.

From the following data prepare a reconciliation statement:

Rs.

Profit as per cost account 1,45,500

Works overheads under-recovered 9,500

Administrative overheads under-recovered 22,750

Selling overheads over-recovered 19,500

Over valuation of opening stock in cost accounts 15,000

Over valuation of closing stock in cost accounts 7,500

Interest earned during the year 3,750

Rent received during the year 27,000

Bad debts written off during the year 9,000

Preliminary expenses written off during the year 18,000

PART C

Answer ANY TWO questions 2×20=40 marks

The following information is provided by S.M.Ltd for the fortnight of April 2010:

Material exe:

Stock on 1.4.2010 100 units at Rs.5 per unit

Purchases :

5.4.2010 300 units at Rs.6

8.4.2010 500 units at Rs.7

12.4.2010 600 units at Rs.8

Issues:

6.4.2010 250 units

10.4.2010 400 units

14.4.2010 500 units

On 11/4/2010 100 units were returned to supplier and on 15/4/2010 stock verifier found a shortage of 20 units.

Using FIFO and LIFO methods of pricing issues, prepare the Stores Ledger.

20,000 units were introduced in Process A, at a cost of Rs.40,000. After processing 18,500 units were transferred to Process B, which produced final output of 18,000 units. Other particulars are given below:

Process A Process B

Material cost Rs.40,000 Rs. 4,000

Labour cost Rs.12,000 Rs.10,000

Overheads Rs. 8,000 Rs. 9,553

Normal loss % on input 5 4

Sales value of scrap units Re.1 Rs.2

There was no opening or closing work-in-process.

Prepare Process accounts, Normal loss account, Abnormal loss account and Abnormal gain account.

A company has 3 production departments A, B and C and two service departments X and Y. The following data are extracted from the records of the company for a particular given period:

Rs.

Rent and rates 25,000

Power 7,500

General lighting 3,000

Depreciation on machinery 50,000

Indirect wages 7,500

Sundries 50,000

Additional data, department-wise:

Total Dept.A Dept.B Dept.C Dept.X Dept.Y

Direct wages (Rs) 50000 15000 10000 15000 7500 2500

HP of machines used 150 60 30 50 10 –

Cost of machinery (Rs) 1250000 300000 400000 500000 25000 25000

Production hours worked – 6226 4028 4066 – –

Floor space used (sq mt) 10000 2000 2500 3000 2000 500

Lighting points (nos) 60 10 15 20 10 5

Service department’s expenses allocation:

A B C X Y

X 20% 30% 40% – 10%

Y 40% 20% 30% 10% –

You are required to:

Compute the overhead rate of production departments using the repeated distribution method; and
Hence, determine the total cost of a product whose direct material cost and direct labour cost are respectively Rs.250 and Rs.150 and which would consume 4 hours, 5 hours and 3 hours in departments A, B and C respectively.

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