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

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

   B.Com. DEGREE EXAMINATION – COMMERCE

FIFTH SEMESTER – NOVEMBER 2010

CO 5501 – COST ACCOUNTING

 

 

 

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

Time : 9:00 – 12:00

PART – A

 

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

Explain the following terms: Questions 1 – 4.

  1. `By products’ and `Joint products’
  2. Cost unit and Unit cost
  3. Absorption of overheads
  4. Cost plus contract
  5. State whether the following statements are True OR False:
  6. a) Abnormal idle time cost is recovered from the customer.
  7. b) During periods of rising material prices, FIFO method results in inflating the profit.
  8. A contract commenced on 1/7/2010. Details relating to the contract upto 31/12/2010 was as follows:

Material issued Rs.42,000

Wages paid Rs.30,000

Overheads Rs.15,000

Material at site on 31/12/2010 Rs.2000

20% of the material used and 10% of the wages paid are incurred for the work done but not certified.

Overheads are charged to the uncertified work as a %age on direct wages.

Calculate the cost of work uncertified as on 31/12/2010.

  1. From the following data, calculate re-order level and maximum level.

Rate of consumption – 10 to 20 units per day

Lead time – 6 to 10 days

Reorder quantity – 200 units

  1. From the following data, prepare Process 1 account

Materials introduced 4700 units at Rs.28,200

Labour Rs.14,910

Overheads Rs.10,000

Normal loss 10% of input

Scarp realized Rs.5 per unit

Output 4,300 units.

  1. From the following data calculate Labour turnover rate using Flux method:

No of workers at the beginning of the month – 500

No of workers at the end of the month – 600

During the month 5 workers left, 20 workers were discharged and 75 workers were recruited. Of these 10 workers were recruited for the vacancies of those leaving, while the rest were engaged for an expansion scheme.

  1. From the following data, calculate the Economic Batch Quantity:

Annual usage of a component – 6000 units

Set up cost per batch – Rs.20

Cost of production per unit – Rs.100

Carrying cost – 6% p.a. on inventory cost.

PART  B

Answer ANY FIVE questions                                                                                                 (5×8=40 marks)

 

  1. Define overheads. Distinguish between `allocation’, `apportionment’ and `absorption of overheads.

 

  1. What are the objectives of Cost Accounting? Explain any 4 differences between Cost Accounting and Financial Accounting.

 

  1. The financial records of AB Ltd reveal the following data for the year ended 31st March 2010:

Sales (50,000 units) Rs.10,00,000

Direct material Rs.5,00,000

Direct wages Rs.2,50,000

Factory expenses were Rs.1,50,000

Administration expenses Rs.1,45,000

Interest and dividend received Rs.15,000

Closing stock of finished goods was 5,000 units valued at Rs. 1,00,000

In cost accounts, factory expenses are charged at 70% of direct wages and administration expenses are charged at 20% of works cost. Ascertain the costing and financial profit and prepare a statement reconciling the two profits.

 

  1. From the following data, you are required to work out the earnings of a worker for a week under:
  2. a) Straight Piece Rate
  3. b) Taylors Differential Piece Rate
  4. c) Halsey Plan
  5. d) Rowan Plan

Weekly working hours – 48

Hourly wage rate – Rs.7.50

Piece rate – Rs.3 per piece

Normal time taken per piece – 20 minutes

Normal output per week – 120 pieces

Actual output for the week – 150 pieces

Differential piece rate – 80% of piece rate when output is below normal and 120% of piece rate when output is above normal.

 

  1. From the following data prepare Stores Ledger under FIFO method:

1st October opening stock 600 units at Rs.14 per unit

Receipts during the month:

3rd                    300 units at Rs.15 per unit

7th                   900 units at Rs.16 per unit

23rd                  400 units at Rs.18 per unit

Issues during the month:

5th        500 units

8th        800 units

27th      500 units

On 31st October a shortage of 10 units were noticed.

 

  1. The information given below is taken from the cost records of the factory in respect of job no. 707.

Direct material Rs.6,060

Wages –   Dept A 80 hours at Rs.4 per hour

Dept B 60 hours at Rs.3 per hour

Dept C 20 hours at Rs.5 per hour

Variable overheads are as follows:

Dept A Rs.7,500 for 5,000 hours

Dept B Rs.3,000 for 1,500 hours

Dept C Rs.2,000 for 500 hours

Fixed overheads of the factory are estimated at Rs.30,000 for 10,000 working hours.

Calculate the cost of the job 707 and the price to be quoted to give a profit of 20% on cost price.

  1.   A contractor obtained a contract for Rs.8,00,000 on 1st Jan.2009. The expenses incurred during

the year ended 31st Dec.2009 were as under:

Rs.

Materials                                                        2,20,000

Wages paid                                                     2,00,000

Wages accrued                                                10,000

Other expenses                                                20,000

Plant costing Rs.40,000 having a life of 5 years was used on the contract for 73 days. Material costing Rs.3,000 were stolen from the site. Material at site on 31.12.2009  were valued at Rs.24,600.  The contractor had received Rs.4,00,000 in cash upto 31.12.2009  representing 80% of the work certified. Work uncertified was estimated at Rs.14,000.

Prepare the contract account.

 

  1. X owns a truck, which cost Rs.1,20,000. The life of the truck is 2,00,00 kms and has a scrap value of

Rs.20,000  at the end of its life. The truck runs 5000 kms per month of which 20% is run empty. From

the following data, calculate the cost per km.

Manager’s salary                        –           Rs.3000 p.m.

Driver’s salary                 –           Rs.2500 p m

Cleaner’s salary               –           Rs.1500 p m

Garage rent                     –           Rs.1000 p m

Insurance                         –           2% p a on the cost of the vehicle

Road tax                          –           Rs.1200 p a

Repairs                            –           Rs.1800 p m

The truck uses 1 litre of petrol for every 10 kms. Cost of petrol Rs.48 per litre.

 

PART – C

Answer ANY TWO questions                                                                                                      (2×20=40 marks)

 

  1. R Ltd gives you the following information for the year 2009, during which 10,000 units were produced and sold.

Material Rs.90,000

Power Rs.12,000

Cost of rectifying defective work Rs.3,000

Direct wages Rs.60,000

Factory indirect wages Rs.20,500

Clerical salaries Rs.39,000

Selling expenses Rs.19,500

Plant repairs Rs.11,500

Sale proceeds of factory scrap Rs.2,000

The net selling price was Rs.31.60 per unit

Prepare a cost sheet and ascertain profit made in 2009.

From January 1, 2010 selling price is reduced to Rs.31 per unit. It is estimated that 15,000 units will be produced and sold. The rates for material and direct labour is expected to increase by 10%. Assuming factory overheads are recovered as a percentage of direct wages, and office and selling expenses as a percentage of works cost, prepare a cost sheet for the year 2010 showing the estimated cost and profit.

 

  1. 20000 units were introduced in a process at a cost of Rs.2 lakhs. Other expenses incurred were:

Material  Rs.1,04,000;  Labour Rs.1,71,000;  Factory overheads Rs.68,400. Normal loss is expected to be 10% of input.

16,000 units were completed and transferred to the next process.

2500 units were scrapped when they were completely processed.

1500 units remained as closing work in progress, the degree of completion being:

Material 75%;  Labour and overheads 40%.

Scrap was sold at Rs.11 per unit.

Prepare a statement showing the Process Account, Abnormal Loss Account, Equivalent production, Cost per equivalent unit and a Apportionment of cost.

 

  1. In a manufacturing concern there are 2 Production departments, A and B and 2 Service Depts. C and D. C renders service worth Rs.12000 to D and the balance to A and B in the ratio of 3:2. D renders service to A and B in the ratio of 9:1.

The overhead expenses incurred for the year are as follows:

Depreciation – Rs.95000

Rent         – Rs.18000

Power – Rs.10000

Canteen expenses – Rs.5400

Sundry expenses – Rs.4500

The following further information are given regarding the departments:

A                      B                      C                      D

Direct material (Rs.)                   6000                5000                3000                2000

Direct labour (Rs.)                       20000              10000              10000              5000

Floor space (sq mt)                      5000                4000                1000                2000

Value of machinery (in lakhs)     10                    5                      3                      1

Horse power of machines           1000                500                  400                  100

No of workers                              100                  50                    50                    25

Department A recovers overheads at a rate per labour hour. The labour hours in department

A is Rs.8000.

Department B recovers overheads at a rate per machine hour. Machine hours in department

B are 5000.

Calculate the cost of a job which requires Rs.2000 in material, Rs.1500 in wages.

The labour hours for the job in Department A is 20 and the machine hours for the job in Department

B is 10.

 

 

 

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

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – COMMERCE

FIFTH SEMESTER – APRIL 2011

CO 5501 – COST ACCOUNTING

 

 

 

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

Time : 9:00 – 12:00

 

PART  A

 

Answer ALL questions                                                                                  Marks:10×2=20

 

 

Explain the following

 

  1. ABC stock analysis

 

  1. Normal and Abnormal loss

 

  1. Taylor’s differential piece rate system

 

  1. State whether the following statements are TRUE or FALSE:
  2. In cost plus contracts, the contractor runs no risk of incurring losses.
  3. Warehouse rent is treated as a factory overhead.

 

  1. Fill in the blanks:
  2. Apportioning service department overheads to production departments is known as ———- —distribution.
  3. Factory overheads are normally charged as a percentage of ———when preparing

 

  1. A 5 tonne lorry operates between 2 towns 100 kms apart. It makes one round trip per day. On the outward journey it carries full capacity but on the return journey it carries only 60% of capacity. It operates for 30 days in a month. If the expenses per month is Rs.120000, calculate the cost per tonne kilometre.

 

  1. Minimum consumption per day 100 – 160 units. Reorder period 10 – 14 days. Reorder quantity 1500 units. Calculate maximum level and minimum level.

 

  1. Estimated labour hours per year is 104000; estimated factory overheads per year Rs.52000; job X requires material Rs.150, direct wages Rs.100 and takes 30 labour hours to produce. Calculate the overheads to be charged to job X.

 

  1. Annual consumption 6000 kgs; ordering cost Rs.120 per order; carrying cost 20% of inventory value; cost per kg Rs.20. Calculate economic order quantity.

 

  1. Profit as per financial accounts Rs.2000; administration overheads over- recovered in cost Rs.8000; bank interest and transfer fees in financial accounts Rs.1500. Calculate profit or loss as per Cost Accounts.

 

 

 

 

PART  B

 

Answer  ANY FIVE  questions                                                                     Marks:5×8=40

 

  1. State the reasons why the profit as per cost account and financial accounts differ.
  2. Explain the following terms in the context of a Contract Account: a) works certified (b) work uncertified (c) retention money (d) escalation clause.

 

  1. The following particulars relate to the production department of a factory for the month of June, 2010:

(Rs.)

Materials used                                                             80,000

Direct wages                                                               72,000

Direct labour hours worked                                        20,000

Hours of machine operation                                        25,000

Overhead charges allocated to the department                      90,000

Cost data of a particular work order carried out in the above department during June, 2010 are given below:

(Rs.)

Material used                          8,000               Labour hours booked              3,300

Direct wages                           6,250               Machine hours booked                        2,400

What would be the factory cost of the work order under the following methods of  charging overheads:

  • Direct labour cost rate; (ii)  Machine hour rate; and (iii) Direct labour hour rate.

 

  1. From the following data compute the cost per running kilometer:

Items                                                               Vehicle A

Kilometers run (annual)                                                    15,000

Cost of vehicles                                                          Rs.25,000

Road licence (annual)                                     Rs.      750

Insurance (annual)                                           Rs.      700

Garage rent (annual)                                       Rs.      600

Supervision and salaries          (annual)                      Rs.   1,200

Driver’s wage per hour                                               Rs.          3

Cost of fuel per gallon                                                Rs.          3

Kilometers run per gallon (kms)                                                20

Repairs and maintenance per km (Rs.)                                  1.65

Tyre allocation per km (Rs)                                        0.80

Estimated life of vehicles (kms)                                     1,00,000

Charge interest at 5% on cost of vehicle. The vehicle runs 20 kms per hour on an average.

 

  1. M/s Indu Industries Ltd., are the manufacturers of moon-light torches. The following data relate to manufacture of torches during the month of March 2011:

Raw materials consumed                                Rs.20,000

Direct wages                                                   Rs.12,000

Machine-hour worked                                     9,500 hours

Machine-hour rate                                           Rs.2

Office overheads                                            20% of works cost

Selling overheads                                            Rs.0.50 per unit

Units produced                                                           20,000

Units sold                                                        18,000 @ Rs.5 per unit

Prepare Cost Sheet showing the cost and the profit per unit and the total profit earned.

 

  1. The following are the details supplied by AB Ltd., in respect of its raw materials for the month of November 1990.

Date

01.11.2010      Opening balance  1,000 units @ Rs.6 per unit                                   –

10.11.2010      Received 500 units at Rs.7 per unit                            –

15.11.2010      Issued 1200 units

20.11.2010      Received 1,000 units at Rs.8 per unit                         –

30.11.2010      Issued 1,100 units

0n 30th November a shortage of 50 units was found.

Prepare the Stores Ledger under,  Weighted Average method.

 

  1. A, B and C on a particular day produced 200, 250 and 300 pieces respectively of a Product ‘P’. The time allowed for production of 25 units of ‘P’ is 1 hour and the hourly rate of wage payment is Rs.8.

Calculate for each of the  three workers their earnings for a day (8 Hours per day), and the Effective Rate of Earnings per hour  under Halsey Premium Bonus Plan and Rowan Premium Bonus  Plan.

 

  1. The following data relate to process 1.

Opening Work in progress 900 units valued at Rs.4500 (material 100%, labour and overheads 60%)

Input of materials 9100 units at Rs.27300.

Direct wages Rs.8200

Production overheads  Rs.16400

Units scraped 1200 (material 100%, labour and overheads 70%)

Closing work in progress 1000 units (material 100%, labour and overheads 80%)

Units transferred to Process 2  – 7800

Normal process loss 10% of total input

Scrap value Rs.3 per unit

Compute equivalent production and cost per equivalent unit of each element and the value of the closing Work in Progress.

 

PART  C

 

Answer ANY TWO questions                                                                              Marks:2×20=40

 

  1. The Profit and Loss Account of Oil India (Pvt) Ltd., for the year ended 31st March, 2011 is as follows:

 

 

Materials

Wages

Direct expenses

Gross profit

 

 

 

 

Administration expenses

Income tax

Net Profit

 

(Rs)

  4,80,000

  3,60,000

  2,40,000

  1,20,000

 

 

12,00,000

 

     60,000

     10,000

     58,000

  1,28,000

 

Sales

Closing stock

Work in progress:

     Materials                  30,000

     Wages                       18,000

     Direct expenses       12,000

 

 

Gross Profit

Interest received

 

 

(Rs)

  9,60,000

  1,80,000

    

 

 

      60,000

 12,00,000

 

   1,20,000

         8,000

 

   1,28,000

As per the cost records, the direct expenses have been estimated at a cost of Rs.30 per kg and administration expenses at Rs.15 per kg. During the year 6000 kgs were manufactured and 4800 kgs were sold.   Prepare a statement of costing profit and loss account and reconcile the profit with financial records.

 

 

 

 

  1. A product is finally obtained after it passes through three distinct processes. The following information is available from the cost records.

Process I          Process II        Process III       Total

Rs.                   Rs.                   Rs.                   Rs.

Materials                                2,600               2,000               1,025               5,625

Direct wages                          2,250               3,680               1,400               7,330

Production overheads                        –                       –                       –                       7,330

500 units @ Rs.4 per unit were introduced in Process I. Production overheads are absorbed as a percentage of direct wages.

The actual output and normal loss of the respective processes are given below:

Output             Normal loss as a          Value of scrap

(units)              %age of input              (per unit)

Process  I                   450                  10%                             Rs.2

Process II                   340                  20%                             Rs.4

Process III                 270                  25%                             Rs.5

Prepare the process accounts, Normal loss account, Abnormal  loss accounts and Abnormal Gain account.

 

  1. M/s Contractor and Engineer undertook a contract for Rs.2,50,000 for constructing a college building. The following is the information concerning the contract during the year 2010:

(Rs.)

Materials sent to site                                                                85,349

Labour engaged on site                                                           74,375

Plant installed at site at cost                                                    15,000

Direct expenditure                                                                     3,167

Establishment charges                                                                           4,126

Materials returned to store                                                           549

Work certified                                                                                    1,95,000

Cost of work not certified                                                         4,500

Materials at site on 31.12.2010                                                             1,883

Wages accrued on 31.12.2010                                                              2,400

Direct expenditure accrued on 31.12.2010                                  240

Value of plant on 31.12.2010                                                              11,000

Cash received from contractee                                                           1,80,000

Prepare the Contract Account, the Contractee’s Account and show how the work-in-progress will appear in the Balance Sheet of M/s. Contractor and Engineer as on 31st December, 2010.

 

 

 

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