Cost And Management Accounting – I

St. Joseph’s College of Commerce B.Com. 2014 I Sem Cost And Management Accounting-I Question Paper PDF Download

by
  1. JOSEPHS COLLEGE OF COMMERCE (AUTONOMOUS)

END SEMESTER EXAMINATION – OCTOBER 2014

BCOM – III SEMESTER

COST AND MANAGEMENT ACCOUNTING-I

 Duration: 3 Hours                                                                                        Max. Marks: 100

SECTION – A

  1. Answer ALL the questions. Each carries 2 marks.                                 (10 x 2 = 20)
  2. What is the difference between Halsey and Rowan Plan in Bonus calculation?
  3. What is ‘office on cost’? How is it different from Office Cost?
  4. Briefly explain ABC technique of Material control?
  5. Z Ltd requires 3000 units of material per month, each costing Rs.42. Cost per order is Rs.2500 and inventory carrying charges work out to 20% of the average inventory. Find out the EOQ and the number of orders per year.
  6. How do you differentiate ‘Expired Cost’ from ‘Unexpired cost’?
  7. What do you understand by the term ‘Cost center’?
  8. Mention the non-cost expenses excluded from Cost Accounting?
  9. What is the procedure for calculating ‘Work uncertified’ in contract costing?
  10. What do you understand by’ under-absorption’ and ‘over-absorption of overheads’?
  11. A transport company is running 4 buses between 2 towns which are 50 kms apart. The seating capacity of each bus is 40 passengers, actual passengers carried were 75% of seating capacity, buses operate all 30 days in a month, and each bus makes 3 round trips per day. Calculate the total passenger kms.

SECTION – B

  1. Answer any FOUR questions. Each carries 5 marks.                      (4 x 5 = 20)
  2. The factory overhead costs of 4 production departments of a company engaged in executing job order for an account year are

Dept-A : Rs.19,300,  Dept B :Rs.4,200,  Dept C : Rs.4,000 & Dept D : Rs.2,000

Overheads have been applied as under

Dept A – Rs.1.50 per machine hour for 14,000 hours

Dept B – Rs.1.30 per direct labour hour for 3,000 hours

Dept C-  80% of direct labour cost of Rs.6,000

Dept D – Rs.2 per piece for 950 pieces

Find out the amount of department wise under or over-absorbed overheads.

 

  1. In a factory works overheads are absorbed@60% of labour and office expenses @20% of works cost.

The total expenditure is as follows

Material         Rs.2,00,000;

Labour           Rs.1,50,000

Factory expenses      Rs.98,000

Office expenses       Rs.85,000.

10% of output is in the stock and sales totals up to Rs.5,10,000.

Prepare a cost sheet and Reconciliation statement.

 

  1. Calculate the earnings of a worker under Halsey and Rowan plan
  • Standard time for producing one dozen articles – 5 hours
  • Hourly rate of wages guaranteed – Rs.35
  • Actual time taken by the worker to produce 20 dozens – 80 hours

 

 

  1. Prepare stores ledger a/c showing the receipts and issues, pricing materials issued on the basis of: Simple average method

Receipts

1-10-2004      opening stock 800 units at             Rs.7.00 per unit

3-10-2004        purchased 1200 units at     Rs.8.00 per unit

13-10-2004       purchased 3600 units at     Rs.8.60 per unit

23-10-2004      purchased 2400 units at     Rs.7.80 per unit

 

Issues

5-10-2004       issued                        1600 units

15-10-2004      issued                        2400 units

25-10-2004      issued                        2400 units

 

  1. The following direct costs were incurred on Job no:239 of Xltd.

Materials Rs.6010

Wages : Dept A- 60 hrs @ Rs.30 per hour

Dept B- 40 hrs @ Rs.20 per hour

Dept C -20 hrs @ Rs.50 per hour

Overheads for these 3 departments were estimated as follows.

Variable overheads :  Dept A- Rs.15,000 for 1,500 labour hours

Dept B- Rs.4,000  for 200 labour hours

Dept C –Rs.12,000 for 300 labour hours

Fixed overheads are estimated at Rs.40,000 for 2,000 Normal working hours.

You are required to calculate cost of Job.no.239 and the price to be quoted to earn a profit of 25% on selling price.

 

  1. Differentiate Cost Accounting with Financial Accounting?

SECTION – C

  • Answer any THREE Each carries 15 marks.                  (3×15 = 45)
  1. Alcon Construction Company Ltd commenced a Contract on 1-1-2007. The trial balance as on 31-12-2007 shows the following balance
  Dr (Rs) Cr (Rs)
Paid up share capital   1,00,000
Cash received on account of contract (80% of work certified)    

1,20,000
Building 30,000  
Machinery at cost (75% at site) 40,000  
Bank 4,000  
Material at site 40,000  
Direct Labour 55,000  
Expenses at site 2,000  
Vehicles 30,000  
Furniture 1,000  
Office equipment 10,000  
Postage 500  
Office expenses 2,000  
Rates and taxes 3,000  
Power 2,500  
     
  2,20,000 2,20,000

The contract price is Rs.3,00,000 and work certified is Rs.1,50,000.The work completed since certification is estimated at Rs.1000 (at cost). Machinery costing Rs.2,000 was returned to stores at the end of the year. Stock of material at the site on 31-12-2007 was of the value of Rs.5,000. Wages outstanding were Rs.200. Depreciation on machinery is 10%. Calculate the profit from contract and prepare the Balance sheet.

 

 

 

  1. SNS travels operates a 2 buses in a route covering 95 kms. Cost of each vehicle is     60,00,000 (fuel efficiency – 7 kmpl). The annual charges are
Insurance Rs.4,85,000
Road tax Rs.1,60,000
Garage rent Rs.75,000
Cost of repairs Rs.1,10,000
Expenses on tires and tubes Rs.13,200 pm
Office expenses Rs.16,000 pm
Cost of fuel (diesel) Rs.60 per liter
Drivers salary Rs.12,500 pm
Conductors salary Rs.8,000 pm

In addition the driver and conductor are entitled to 2.5% commission on ticket sale. Effective life of each vehicle is 10 years with a scrap value of Rs.5,00,000 at the end. Each bus has 60 seats and is expected to run 3 two way trips for 30 days in a month (including 4 Sundays where the buses run at 80% capacity). Calculate the passenger fare structure for approval by transport authorities who allow 12.5% profit on net sales. Interest on loan is allowed on vehicle cost which amounted to Rs.7,15,000 p.a.

  1. A company manufactured and sold 1,000 radios during a year. Prepare a statement of cost in proper form, showing the different elements of cost per unit from the summarized trading and profit and loss account set out below.
  Rs.   Rs.
To materials 80,000 By Sales 4,00,000
“ Direct wages 1,20,000    
“ works on cost 50,000    
“ Gross Profit 1,50,000    
  4,00,000   4,00,000
       
To Salaries 60,000 By Gross Profit 1,50,000
“ Rent 10,000    
“ selling expenses 30,000    
“ General expenses 20,000    
“Net  profit 30,000    
  1,50,000   1,50,000

Using the above information, prepare a statement of estimate for the next year if

  1. Output and sales will be 1,200 radios
  2. Price of materials will rise by 20% and wages rate by 5%
  3. Works on cost will rise in proportion to the combined cost of materials and wages
  4. A profit at 10% on the selling price is expected.
  5. Selling price per unit and others will remain unchanged.

 

  1. A manufacturing concern has three production departments and two service departments. The expenses for the departments were as follows.
Production Departments Service Departments

 
Dept A = Rs.20000

Dept B = Rs.17,000

Dept C = Rs.15,000

 Department X = Rs.8000

Department Y = Rs.4000

 

 

The service department expenses are charged out on percentage basis as follows.

  Dept A Dept B Dept C Dept X Dept Y
Dept X 25% 20% 35%   20%
Dept Y 30% 20% 40% 10%  

 

Show the apportionment of the service department expenses on the basis of the (a) simultaneous equation method  (b) trial & error method.

 

  1. Compute the machine hour rate for a machine purchased to cover the following overhead expenses

Rent of the department- Rs.6,000 p.a.

The machine occupies one-fourth space

Lighting (no. of points in the dept 15:3 points are engaged on this machine) Rs.2,500 pa

Insurance Rs.600 pa

Cotton waste, oil etc   Rs.400 pa

Salaries of foremen and supervisors (one-third of their time is occupied by the machine) –Rs.35,850.

The machine was purchased for Rs.50,000 and its scrap value was Rs.4,000, its estimated working life is 10 years.

It is assumed from past experience

  • That machine will work for 2,300 hours per annum
  • That it will necessitate an expenditure of Rs.17,250 towards repairs and maintenance through its working life
  • Machine consumes 5 units of power at a cost of 15 paise per unit.

 

SECTION – D

  1. Compulsory Question (15 marks)
  2. Zed Shoe company manufactures 2 types of sandals Alpha and Beta. Costs for the year ended 31-3-2012 were
  Rs.
Direct Material 15,00,000
Direct wages 8,40,000
Production overheads 3,60,000
  27,00,000

There was no work in progress at the beginning or at the end of the year. It is ascertained that

  1. Direct material in Alpha sandals consisted twice as much as that in Beta.
  2. The direct wages for Beta sandals were 60% of those of Alpha
  3. Production overheads was the same per pair of Alpha and Beta
  4. Administrative overheads for each type was 150% of Direct wages
  5. Selling cost was Rs.1.50 per pair.
  6. Production during the year were : Alpha 40,000 pairs of which 36,000 were sold. Beta 1,20,000 pairs of which 1,00,000 were sold.
  7. profit to be earned on Manufacturing – Alpha is estimated at Rs.2,34,000 and on Beta estimated at Rs.5,50,000

Prepare a statement showing cost, profit and Sales.

St. Joseph’s College of Commerce 2015 Cost And Management Accounting – I Question Paper PDF Download

by

 

ST. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)
END SEMESTER EXAMINATION – SEPT/OCT. 2015
B.COM. – III SEMESTER
C1 12 302: COST AND MANAGEMENT ACCOUNTING – I
Duration: 3 Hours                                                                                             Max. Marks: 100
SECTION – A
I) Answer ALL the questions.  Each carries 2 marks.                                        (10×2=20)
  1. Mention any four items which will be classified under Factory Overheads.
  2. What is Batch Costing?  When do we use it?
  3. Mention any two distinctions between Job Costing and Contract Costing.
  4. Mention any two distinctions between Fixed Overheads and Variable Overheads.
  5. What are Indirect Materials?  Mention any two examples.
  6. Compute the amount to be transferred to Profit & Loss A/c from the following information:

Value of work certified Rs. 21,00,000
Contract Price Rs. 45,00,000
Notional Profit Rs.   7,50,000
Cash Received Rs. 15,75,000
  7. Calculate E.O.Q from the following particulars:

Annual Consumption 36,000 units
Cost of Materials per unit Rs. 40
Cost of placing and receiving one order Rs. 60
Annual Carrying cost of one unit 10% of Inventory Value
  8. Using Taylor’s Plan, calculate Total Earning of  worker A and B from the following details:

Normal Rate per hour Rs. 60
Standard Time per piece 20 Minutes
In a day of 9 hours, A Produced 26 units and B Produced 30 Units
Differentials to be applied:
Below Standard 80% of the piece rate
Above Standard 120% of the piece rate
  9. Mention any two needs of reconciling Costing Profits or Losses with Financial Profit or Losses.
  10. What is Operating Costing?  Who uses this method of Costing?
SECTION – B
II) Answer any FOUR questions.  Each carries 5 marks.                                      (4×5=20)
  11. Calculate the Machine Hour Rate from the following details:

1 Bought Machinery worth Rs. 45,000.
2 Installation Charges Rs. 5,000.
3 Life of the Machine = 5 years.
4 Working hours per year = 2,500.
5 Repair charges = 75% of the depreciation.
6 Electric power consumed: 10 units per hour @ 15 paisa per unit.
7 Lubricating oil = Rs. 4 per day of 8 hours.
8 Consumable Stores @ Rs. 10 per day of 8 hours.
9 Wages of Machine Operator @ Rs. 8 per day of 8 hours.
  12. The accounts of a machine manufacturing company disclose the following for the six months ending 31st Dec., 2014.

  Rs.
Materials used 1,50,000
Direct Wages 1,20,000
Factory overheads 24,000
Office Expenses 17,640

Prepare a Cost Sheet of the machines and calculate the price which the company should quote for the manufacture of a machine requiring materials valued at Rs. 11,250 and the expenditure on productive wages of Rs. 6,750, so that the price may yield a profit of 20% on the Selling Price.

For the purpose of price quotation, charge factory overheads as a percentage of direct wages and charge office overheads as a percentage of works cost.
  13. From the details given below, calculate:

i)  Re-ordering level            ii) Maximum Level iii) Minimum Level iv) Danger Level

v) Re-order Quantity

Re-ordering quantity is to be calculated on the basis of following information:

Cost of placing a purchase order is Rs. 20.

Number of units to be purchased during the year is 5,000.

Purchase price per unit inclusive of transportation cost is Rs. 50.

Annual cost of storage per unit is Rs. 5.

Details of lead time: Average 10 days, Maximum 15 days, Minimum 6 days.  For Emergency purchases 4 days.

Rate of consumption: Average 15 units per day, Maximum 20 units per day.

 
  14. From the following particulars, prepare a Reconciliation Statement:

   Cost Accounts  Financial Accounts
Profit ?                        203,000
Factory Expenses              121,300                        105,000
Closing Stock                42,800                          40,800
Depreciation                   8,000                          11,000
Opening Stock                32,600                          33,000
Office Expenses                50,000                          53,400
Selling Expenses                75,000                          71,000

Besides the above information, you are informed that Land Costing Rs. 2,00,000 was sold during the year for Rs. 2,23,400.  There was Rs. 5,000 interest received, Rs. 2,400 as discount received.

 
  15. From the following data provided to you, find out the Labour Turnover Rate by applying:

(a)   Flux Method     b) Replacement Method  and c)  Separation Method

 

No. of workers on the payroll:

At the beginning of the month    15,000

At the end of the month              16,000

During the month, 75 workers left, 200 persons were discharged and 575 workers were recruited.  Of these, 130 workers were recruited in the vacancies of those leaving, while the rest were engaged for an expansion scheme.

 
  16. What is Cost Accounting?  Mention any four advantages and disadvantages of Cost Accounting.
SECTION – C
III) Answer any THREE questions.  Each carries 15 marks.                                (3×15=45)                                                                                                 
  17. M/S Sellwell Ltd. has furnished you the following information from the financial books for the year ended 31st December, 2014:

 

Profit and Loss Account for the year ended 31st December, 2014

Opening Stock of finished goods:   Sales (10,250 units) 3,58,750
500 units @ Rs. 17.50 each 8,750 Closing stock of finished goods:  
Material Consumed 1,30,000 250 units @ Rs. 25 each 6,250
Wages 75,000    
Gross Profit c/d 1,51,250    
Total 3,65,000 Total 3,65,000
       
Factory overheads 47,375 Gross Profit c/d 1,51,250
Administration overheads 53,000 Interest 125
Selling Expenses 27,500 Rent received 5,000
Bad Debts 2,000    
Preliminary Expenses 2,500    
Net Profit 24,000    
Total 1,56,375 Total 1,56,375

 

The cost sheet shows:

1 The cost of materials as Rs. 13 per unit
2 The labour cost as Rs. 7.50 per unit
3 The factory overheads are absorbed at 60% of labour cost
4 The administration overheads are absorbed at 20% of factory cost
5 Selling expenses are charged at Rs. 3 per unit
6 The opening stock of finished goods is valued at Rs. 22.50 per unit.

 

You are required to prepare:

a The cost sheet showing the number of units produced and the cost of production, by elements of costs, per unit and in total.
b The statement of profit or loss as per cost accounts for the year ended 31st December, 2014.
c The statement showing the reconciliation of profit or loss as shown by the cost accounts with the profit as shown by the financial accounts.
  18. The following figures are extracted from the Trial Balance of  Rajesh Co. Ltd. on 30th September, 2015

Inventories:  Rs.
     Finished Stock            80,000
     Raw Materials          1,40,000
     Work-in Process          2,00,000
Office Appliances            17,400
Plant and Machinery          4,60,500
Buildings          2,00,000
Sales          7,68,000
Sales Returns or Rebates            14,000
Materials purchased          3,20,000
Freight incurred on materials            16,000
Purchase Returns              4,800
Direct Labour          1,60,000
Indirect Labour            18,000
Factory Supervision            10,000
Repairs and Upkeep-Factory            14,000
Heat, Light and Power            65,000
Rates and Taxes              6,300
Miscellaneous Factory Expenses            18,700
Sales Commission            33,600
Sales Travelling            11,000
Sales Promotion            22,500
Distribution Dept. Sales and Expenses    18,000
Office salaries and expenses              8,600
Interest on Borrowed funds              2,000
Further details are available as follows:  
1) Closing Inventories:  
        Finished Goods          1,15,000
       Raw Materials          1,80,000
       Work – in- Process          1,92,000
2)  Accrued Expenses on:  
       Direct Labour              8,000
       Indirect Labour              1,200
      Interest on Borrowed funds              2,000
3)  Depreciation to be provided on:  
      Office appliances             5 %  
      Plant and Machinery    10%  
      Buildings                          4%  
4)  Distribution of the following costs:  
     Heat, Light and Power to Factory, Office and Selling  
     in the ratio of 8:1:1.

 

 

 

  
     Rates and Taxes two-thirds to Factory and one-third  
     to Office.  
     Depreciation on Building to Factory, Office and Selling
     in the ratio of 8:1:1.

 

  

From the above mention information prepare a statement of cost for the year ended 31st Dec.2014.

 
  19. From the following details, prepare a stores ledger under:

a)      FIFO Method assuming Shortage as Normal.

b)      Weighted Average Method assuming Shortage as Abnormal.

Date Particulars Quantity in Nos. Rate per unit (Rs.)
01.4.2015 Opening balance 5,000 30
03.4.2015 Purchases 1,000 32
05.4.2015 Issues 4,000 ?
10.4.2015 Purchases 3,800 34
14.4.2015 Issues 2,600 ?
16.4.2015 Purchases 2,500 36
28.4.2015 Issues 3,000 ?

On physical verification, it was found that there is a shortage of 80 units on 22nd April 2015.
  20. X Construction Ltd. is engaged on two contracts A and B during the year.  The following are obtained at the yearend (31st Dec.,):

Particulars Contract A Contract B
Date of Commencement April 1st September 1st
Contract Price 6,00,000 5,00,000
Materials Issued 1,60,000 60,000
Materials Returned 4,000 2,000
Materials on site (Dec. 31st) 22,000 8,000
Direct Labour 1,50,000 42,000
Direct Expenses 66,000 35,000
Establishment Expenses 25,000 7,000
Plant installed at cost 80,000 70,000
Value of Plant (Dec. 31st) 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 contractees 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 prepare:

a)      Contract ‘A’ A/c      (7 Marks)

b)     Contract ‘B’ A/c       (7 Marks)

c)      Contractee A’s A/c  (1 Marks)

 
  21. A Company has three production departments and two service departments.  Distribution summary of overheads is as follows:

Production Departments Service Departments
A B C X Y
Rs. 18,000 Rs. 12,000 Rs. 6,000 Rs. 1,404 Rs. 1,800

The expenses of service departments are charged on a percentage basis which is as follows:

  A B C X Y
X 20% 40% 30% 0 10%
Y 40% 20% 20% 20% 0

 

Distribute Service Department Costs to production departments using:

(a)   Simultaneous Equations Method.

(b)   Repeated Distribution Method.
 

SECTION – D
IV) Case Study                                                                                                              (1×15=15)                                                                                          
  22. Mr. Anesh, the proprietor of a small engineering workshop producing specialty products by employing 40 skilled workers, is considering the introduction of some incentive scheme – either Halsey Scheme or Rowan Scheme of wage payment for increasing the labour productivity to cope with the increased demand for the product by about 25%.

He feels that if the proposed incentive scheme could bring about an average 20% increase over the present earning of the workers, it could act as sufficient incentive for them to produce more and he has accordingly given this assurance to the workers.

 

As a result of this assurance, the increase in productivity has been observed as revealed by the following figures for the current month:

 

Hourly rate of wages (guaranteed) Rs. 16
Average time for producing 1 piece by one worker at the previous performance. (Mr. Anesh desires that this time be considered as the time allowed for the purpose of incentive scheme). 2 Hours
No. of working days in the month 25
No. of working hours per day for each worker 8
Actual production during the month 5,000

 

 

 

You are required to calculate:

1 Total Earning under Halsey Plan
2 Effective Hourly Rate under Halsey Plan
3 Total Earnings under Rowan Plan
4 Effective Hourly Rate under Rowan Plan
5 Savings of Mr. Anesh in terms of direct labour cost per piece under Halsey plan.
6 Savings of Mr. Anesh in terms of direct labour cost per piece under Rowan plan.
7 Percentage increase in earnings to the workers under Halsey Plan
8 Percentage increase in earnings to the workers under Rowan Plan

 

GIVE YOUR ADVISE to Mr. Anesh in the selection of the scheme to fulfill his assurance based on the above calculations.

 

 

 

&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&

 

 

 

© Copyright Entrance India - Engineering and Medical Entrance Exams in India | Website Maintained by Firewall Firm - IT Monteur