Loyola College B.Com April 2012 Cost Accounting Question Paper PDF Download

October 19, 2017 by 01 prakash

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – COMMERCE

FIFTH SEMESTER – APRIL 2012

CO 5501 – COST ACCOUNTING

Date : 27-04-2012 Dept. No. Max. : 100 Marks

Time : 9:00 – 12:00

PART – A

Answer ALL Questions: (10×2=20 Marks)

What is Reorder Level?
What is Batch Costing?
Write a short note on Escalation clause.
What is By – Products.
State whether True or False
Unit costing is applied in those industries where different products are produced simultaneously
In the cement industries the unit of cost is per tonne.

Calculate the re-order quantity from the following particulars:

Annual usage …30,000 units

Buying cost per order …Rs.15

Cost per Unit …Rs.100

Cost of carrying inventory …10% of cost

The firm employs 5 workers at an hourly rate of Rs.25/- During the week they worked for 4 days for a total period of 40 hrs each and completed a job for which the standard time was 48 hrs for each worker. Calculate the labour cost, under Rowan method.

What is machine hour rate?
A transport service company is running five buses between two towns which are 60 Kms.

apart. Seating capacity of each bus is 35 passengeres. Actual passengers carried were 80% of

the seating capacity. The company operates for 25 days a month. Each bus made two round

trips per day. Calculate the total passengers kms for the month.

What are the bases for apportionment of expenses given below to the different departments?
i) Rent & Rates ii) Supervisory wages iii) Depreciation iv) General lighting.

PART – B

Answer any FIVE questions: (5×8=40 Marks)

From the following particulars, prepare a Cost Statement showing the components of Total Cost and

Profit for the year ended 31^st December 2006.

	*1-1-2006*	*31-12-2006*
	Rs.	Rs.
Stock of finished goods	6,000	15,000
Stock of raw materials	40,000	50,000
Work-in-progress	15,000	10,000

	Rs.		Rs.
Purchase of raw materials	4,75,000	Sales for the year	8,60,000
Carriage inward	12,500	Income tax	500
Wages	1,75,000	Dividend	1,000
Works Manager’s salary	30,000	Debenture interest	5,000
Factory employees’ salaries	60,000	Transfer to Sinking Fund for replacement of machinery	10,000
Factory rent, taxes and insurance	7,250
Power expenses	9,500	Goodwill written off	10,000
Other production expenses	43,000	Payment of sales tax	16,000
General expenses	32,500	Selling expenses	9,250

P Ltd. Uses three types of materials A,B and C for production of ‘X’ the final product. The relevant monthly data for the components are as given below:

			A	B
Normal usage	(units)		250	175
Minimum usage	(units)		100	100
Maximum usage	(units)		300	250
Reorder quantity	(units)		750	900
Reorder period (months)			2 to 3	3 to 4
Calculate for each component:-
a) Reorder level;		b) Minimum level;
c) Maximum level and		d) Average stock level

Distinguish between Taylor’s Differential Rate and Emerson Efficiency Plan.

The following particulars relate to a new machine purchased:

Rs.

Purchase price of the machine	4,00,000
Installation expenses	1,00,000
Rent per quarter	15,000
General lighting for the total area	1,000	Per month
Foreman’s salary	30,000	Per annum
Insurance premium for the machine	3,000	Per annum
Estimated repair for the machine	5,000	Per annum
Estimated consumable stores	4,000	Per annum
Power – 2 units per hour at Rs.50 per 100 units.

The estimated life of the machine is 10 years and the estimated value at the end of the 10^th year is

Rs.1 lakh. The machine is expected to run 20,000 hours in its life time. The machine occupies

25% of the total area. The foreman devotes 1/6^th of his time for the machine. Calculate the

machine hour rate for the machine.

From the following data prepare a reconciliation statement. Rs.

Profit as per cost accounts 1,50,000

Works overheads under-recovered 10,000

Administrative overheads under-recovered 22,500

Selling overheads over-recovered 18,500

Overvaluation of opening stock in cost accounts 16,000

Overvaluation of closing stock in cost accounts 7,000

Interest earned during the year 4,250

Rent received during the year 27,000

Bad debts written off during the year 8,500

Preliminary expenses written off during the year 17,000

Prakash Transport company has been given a route 20 km. long to run a bus. The bus costs the

company a sum of Rs.50,000. It has been insured at 3% p.a. and the annual tax will amount to

Rs.1,000. Garage rent is Rs.100 p.m. Annual repairs will be Rs.1,000 and the bus is likely to last

for 5 years.

The driver’s salary will be Rs.2,500 p.m. and the conductor’s salary will be Rs.1,500 p.m. in

addition to 10% taking as commission (to be shared by the driver and the conductor equally).

The cost of stationery will be Rs.100 p.m. Manager-cum-Accountant’s salary is Rs.3500 p.m.

Petrol and oil will be Rs.25 per 100 km. the bus will make 3 round trips carrying, on an average,

40 passengers on each trip. Assuming 15% profit on takings, calculate the bus fare to be charged

from each passenger. The bus will run on an average 25 days in a month.

Prepare a Stores Ledger Account from the following details using LIFO method of pricing the issue of

materials:-

April 1	Opening Balance	10,850 kgs @ Rs.130.00 per kg
2	Purchased	20,000 kgs @ Rs.134.00 per kg
3	Issued	6,750 kgs to production
5	Issued	8,500 kgs to production
6	Received back	550 kgs from production being surplus
7	Purchased	17,550 kgs @ Rs.128.00 per kg
8	Issued	11,250 kgs to production
9	Physical stock verification revealed a loss of	250 kgs
10	Issued	8.950 kgs to production
12	Issued	6.300 kg. to production
15	Purchased	10,000 kgs @ Rs. 132.00 per kg
16	Issued	7,750 kgs to production

Write short notes on:
a) Perpetual Inventory system.
b) ABC analysis.

PART – C

Answer any TWO questions: (2 x 20 = 40 marks)

Trichy Limited has three production departments (A,B and C) and two service departments (D and E).

From the following figures extracted from the records of the company, calculate the overhead rate per

labour hour using Repeated Distribution method.

Rs.

Indirect materials			15,000
Indirect wages			10,000
Depreciation on machinery			25,000
Depreciation on building			5,000
Rent, Rates and taxes			10,000
Electric power machinery			15,000
Electric power for lighting			500
General expenses			15,000
			95,500

Items	Total	A	B	C	D	E

Direct materials	Rs.60,000	20,000	10,000	19,000	6,000	5,000
Direct wages	40,000	15,000	15,000	4,000	2,000	4,000
Value of machinery	2,50,000	60,000	1,00,000	40,000	25,000	25,000
Floor area (sq.ft.)	50,000	15,000	10,000	10,000	5,000	10,000
H.P. of machinery	150	50	60	30	5	5
No. of light points	50	15	10	10	5	10
Labour hours	15,000	5,000	5,000	2,000	1,000	2,000
The expenses of service departments D and E are to be apportioned as follows:
		A	B	C	D	E
D		40	20	30	–	10
E		30	30	30	10	–

The following information is available in respect of a contract undertaken by a building contractor in 2000. The contract was for Rs.2,40,000

Rs.

Materials used	45,000
Wages paid	66,000
General charges	2,400
Plant installed at site on 1^st July 2000	12,000
Materials in hand at the end	2,400
Wages accrued due	2,400
Work certified	1,20,000
Work completed but not certified	3,000
Cash received	90,000
Materials transferred to other contracts	2,400
Materials received from other contracts	600

Depreciation on plant is to be provided at 10% per annum. Prepare Contract Account and show what

part of the profit on contract should be taken to credit in 2000.

The product of company passes through three distinct processes to completion. They are known as A,B and C. from past experience it is ascertained that loss is incurred in each process as: Process A-2%, Process B-5%, Process C-10%. In each case the percentage of loss is computed on the number of units entering the process concerned. The loss of each process possesses a scrap value. The loss of processes A and B is sold at Rs. 5 per 100 units and that of process C at Rs.20 per 100 unts. The output of each process passes immediately to the next process and the finished units are passed from process C into stock.

	*Process A*	*Process B*	*Process C*
	*Rs.*	*Rs.*	*Rs.*
Materials consumed	6,000	4,000	2,000
Direct Labour	8,000	6,000	3,000
Manufacturing expenses	1,000	1,000	1,500

20,000 units have been issued to process A at a cost of Rs.10,000. The output of each process has been

as under: Process A 19,500; Process B 18,800; Process C 16,000. There is no work-in-progress in any

process.

Prepare Process Accounts. Calculations should be made to the nearest rupee.

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Loyola College B.Com Nov 2012 Cost Accounting Question Paper PDF Download

October 19, 2017 by 01 prakash

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – COMMERCE

FIFTH SEMESTER – NOVEMBER 2012

CO 5501 – COST ACCOUNTING

Date : 03/11/2012 Dept. No. Max. : 100 Marks

Time : 9:00 – 12:00

PART A

Answer ALL questions: (10×2=20 marks)

Mention 2 reasons why profits as per cost accounts and financial accounts differ.
How is idle time cost treated in cost accounts?
What is an escalation clause in a contract agreement?
What is a machine hour rate?
True or False
When actual loss is less than anticipated loss the difference is abnormal gain.
I.F.O method will show more profit when material prices are falling.

Compute the economic batch quantity for a company using batch costing with the following information:

Annual demand for the component 24,000

Set-up cost per batch Rs. 120

Carrying cost per unit of production Rs. 0.36

From the following data calculate minimum level for material X

Delivery time 2 to 4 weeks

Consumption 100 to 150 units per week

A taxi runs for 4000 kilometers per month of which 20% is run empty. The total expenses for the month is Rs.25,500. Calculate the cost per kilometre.

From the following data provided to you calculate Labour Turnover under Flux method.

No. of workers on the payroll:

At the beginning of the month 500

At the end of the month 600

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

From the following calculate the value of raw material consumed:

Raw materials purchased Rs.88,000

Opening stock of raw materials Rs.1,00,000

Freight and purchases Rs.5,500

Sale of material scrap Rs.2,000

Closing stock of raw materials Rs.1,23,500

PART B

Answer FIVE questions only: (5×8=40 marks)

Define Overheads. Distinguish between allocation, apportionment and absorption of overheads.

Write short notes on:
Taylor’s Differential Piece rate system.
Opportunity cost
Joint and By-products
Labour Hour rate.

The information given below has been taken from the cost records of a factory in respect of Job No.707:

Direct material Rs.4,010

Wage details:

Department A: 60 hours @ Rs.3 per hour

Department B: 40 hours @ Rs.2 per hour

Department C: 20 hours @ RS.5 per hour

The variable overheads are as follows:

Department A: Rs.5,000 for 5,000 hours

Department B: Rs.3,000 for 1,500 hours

Department C: Rs.2,000 for 500 hours

Fixed expenses estimated at Rs.20,000 for 10,000 working hours. Calculate the cost of the Job No.707 and the price for the Job to give a profit of 25% on the selling price.

A workman’s wage for a guaranteed 44 hour is Rs.10 per hour. The estimated time to produce one article is 30 minutes and under incentive scheme the time allowed is increased by 20%,. During one week the workman manufactured 100 articles. Calculate the gross wages under each of the following methods of remuneration:
Time-rate
Piece work with a guaranteed weekly wage
Rowan premium bonus
Halsey premium bonus, 50% to workman.

A Ltd prices issues under F.I.F.O method. From the following prepare the Stores Ledger for the month of October 2012:

October 1 Opening balance 500 units at Rs.2 per uni

6^th Issued 250 units

13^th Received 200 units at Rs.1.90 per unit

15^th Returned from Department 15 units out of the issues on 6^th

20^th Issued 180 units

22^nd Received 240 units at Rs.1.80 per unit

29^th Issued 300 units

On 30^th October the stock verifier found a shortage of 10 units.

M/s. Kishore & Co. Commenced the work on a particular contract on April 1, 2011. They close their books of accounts for the year on December 31, each year. The following information is available from their costing records on December 2011.

Material sent to site Rs.50,000

Wages Paid Rs.1,00,000

Foreman’s salary Rs.12,000

A machine costing Rs.32,000 remained in use on site for 1/5^th of the year. Its working life was estimated at 5 years and scrap value at Rs.2,000. A supervisor is paid Rs.2,000 per month and had devoted one half of his time on the contract.

All other expenses were Rs.15,000. The material on site were Rs.9,000. The contract price was Rs.4,00,000. On December 31, 2011, 2/3^rd of the contract was completed; however, the architect gave certificate only for Rs.2,00,000 on which 75% was paid.

Prepare the Contract Account.

Raj Motors owns a bus which cost Rs.3.80 lakhs. The bus has a life of 5 years and a scrap value of Rs.20,000 at the end of its life. The bus runs between two towns which are 100 kms apart. It makes two round trips a day and operates for 30 days in a month. It has a capacity of 50 passengers and the average occupancy is 80%. Other details are as follows:

Driver’s wages : Rs.9000 per month

Conductor’s wages : Rs.7000 per month

Garage rent : Rs.2000 per month

Office expenses : Rs.7000 per month

Taxes and insurance : Rs.12000 per annum

Repairs : 80% of depreciation

Diesel : Rs.5 per km

Sale of old tyres and tubes : Rs.800 per month

Calculate the operating cost per passenger kilometre.

A Company’s records show the following particulars for a department for the year 2011 for production and sales of 100 units.

Materials Rs.14,000; Direct Labour Rs.7,000; Works Overheads Rs.7,000; Administration overheads Rs.2,800; Selling overheads Rs.3,200; Profit Rs.6,000.

You ascertain that 40% of the works overheads fluctuate directly with production and 70% of the selling overheads fluctuate with sales. It is anticipated that the department would produce 500 units per annum in the year 2012 and that direct labour charges per unit will be reduced by 20%, while fixed works overheads will increase by Rs.3,000. Administration overheads and fixed selling overheads are expected to show an increase of 25% but otherwise no changes are anticipated.

Prepare a statement of Cost and Profit in 2012, if the Company wants a profit of 20% on cost.

PART C

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

From the following details of Small Tools Ltd compute profit in Financial Accounts as well as in Cost Accounts and prepare a statement reconciling the two profits:

Rs. Rs.

Sales 20,000 Bad debts 100

Purchase of materials 3,000 Interest on overdraft 50

Closing stock of materials 500 Profit on sale of assets 1,000

Direct wages 1,000 Selling expenses 3,000

Indirect wages 500

Power 2,000

In Cost accounts:

Manufacturing overhead recovered @ 300% on direct wages.

Selling overhead recovered Rs.2,200

From the following data, calculate:
Equivalent production
Cost per unit of equivalent production and also prepare Process A account.

No. of units introduced in the process 4000 nos.

No. of units completed and transferred to Process B 3200 nos.

No. of units in process at the end of the period 800 nos.

Stage of completion:

Material 80%

Labour 70%

Overheads 70%

Normal process loss at the end of the process 5% of input

Value of scrap Re.1 per unit

Value of raw materials Rs.7,480

Wages Rs.10,680

Overheads Rs.7,120

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

Rent and rates Rs.25,000

General lighting Rs.3,000

Indirect wages Rs.7,500

Power Rs.7,500

Depreciation on machinery Rs.50,000

Sundries Rs.50,000

Additional data, department-wise

Direct wages (Rs)

Horsepower of machine Cost of machinery (Rs)

Production hours worked

Floor space used (Sq.Mt)

Lighting points (nos)

Total

Production dept.

Service dept.

50,000

150

12,50,000

–

10,000

15,000

3,00,000

6,226

2,000

10,000

4,00,000

4,028

2,500

15,000

5,00,000

4,066

3,000

7,500

25,000

–

2,000

2,500

–

25,000

–

500

Service department’s expenses allocation:

A B C P Q

P 20% 30% 40% – 10%

Q 40% 20% 30% 10% –

You are required to:

Compute the overhead rate per hour for production departments using the repeated distribution method; and
Hence, determine the total cost of Job 127 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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