LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.B.A. DEGREE EXAMINATION – BUSINESS ADMINISTRATION
|
SIXTH SEMESTER – APRIL 2007
BU 6600 – ADV. COST MANAGEMENT ACCOUNTS
Date & Time : 16-04-2007/9.00-12.00 Dept. No. Max. : 100 Marks
SECTION-A
(Answer all questions) (10×2=20)
1.What do you understand by memorandum reconciliation statement?
2.Identify any four industries in which batch costing is employed.
3.What do you mean by cost plus contracts?
4.Calculate the total Kms and passenger Kms from the following.
Number of buses – 5
Trips made by each bus (round)-4
Distance of route – 20 kms (one way)
Days operated in a month –25
Capacity in each bus- 50 passengers
Normal passengers travelled- 90% of capacity.
5.Mention the cost units used under the following cases.
- i) Goods transport ii) Hospitals.
6.State the various methods of preparing sales budget.
7.Define “Standard cost”
8.What is Capital Budgeting?
9.What are the advantages of N.P.V.?
10.Calculate the material usage variance from the following;
Standard : 400 units at Rs.10 each.
Actual : 360 units at Rs.7 each.
SECTION-B
(Answer any five questions, choosing not less than TWO from each group) (5×8=40)
GROUP-I
11.Write short notes on the following:
- a) Abnormal loss b) Operating costing c) Job costing d) Valuation of work in progress
in contract costing. . 12.The following is the profit&loss a/c of “V”-Ltd
| Particulars | Rs | Particulars | Rs |
| To Materials
To Wages To Factory expenses To Administration expense To Selling expenses To Depreciation To Net profit
|
30,000
14,000 10,000
8,000 6,000 2,000 45,000 1,15,000 |
By sales
By Closing stock By Profit on sale of machinery By Discount received
|
1,00,000
8,000
2,000 5,000
1,15,000 |
Additional information;
- Profit as per cost accounts was Rs.37,000
- Factory overhead is absorbed in cost accounts at 100 % of wages.
- Administration and selling expenses were recovered at 5% and 7% on
Sales respectively.
- Depreciation was charged in costing at Rs.3,000.
- Closing stock was valued at Rs.10,000 in cost accounting.
You are required to prepare a reconciliation statement of cost and financial profits.
13.From the following particulars, calculate the cost of running a taxi per kilometer.
Number of Taxis -10
Cost of each taxi – Rs.2,00,000.
Salary of manager – Rs.6,000 p.m.
Salary of accountant – Rs.5,000 p.m.
Salary of cleaner – Rs.2,000 p.m
Salary of mechanic – Rs.4,000 p.m
Garage rent – Rs.6,000 p.m.
Insurance premium – 5% p.a.
Annual tax – 6,000 per taxi
Drivers salary – 2,000 per month per taxi.
Annual repair – 10,000 per taxi.
Total life of a taxi is about 2,00,000 kms. A taxi runs in all 3,000 kms in a month
Of which30% is empty. Petrol consumption is one litre for 10 k.m at Rs.18
Per litre. Oil and other sundries are Rs.50 per 100 kms.
14.From the following particulars, prepare a cost sheet showing both production and
Setting up costs, total and per unit,When the batch consists of 200 units;
Cost of materials 12-paise per unit.
Operator’s wages Rs.1.44 an hour.
Machine hour rate.Rs.3
Setting up time of machine 4 hours and 40 minutes .
Manufacturing time 20 minutes per unit.
GROUP-II
15.Write short notes on the following.
- Key factor b) Budgetary control c) Pay-back period d) IRR.
16.From the following particulars given below, calculate the following labour variances
for the two departments.
- a) Labour cost variance b) Labour rate variance c) Labour efficiency variance.
| Department-A | Department-B | |
| Actual gross wages (direct)
Standard hours produced Standard rate per hour Actual hours worked |
Rs.20,000
8,000 Rs.3 8,200 |
Rs.18,000
6,000 Rs.3.50 5,800 |
17.The following particulars are taken from the records of the company engaged in
manufacturing two products X and Y from a certain raw material.
| Product-X (Rs.per unit) | Product-(Rs.per unit) | |
| Sales Materials(Rs.2.5 per k.g) Wages (Rs.15 per hour)
Variable overhead
|
125.00
25.00 37.50 12.50 |
250.00
62.50 75.00 25.00
|
Total fixed overheads Rs.50,000
Comment on the profitability of each product when
- Total availability of raw material is 20,000 kgs and maximum sales potential
Of each product is 1,000 units. Find out the product mix to yield maximum profit.
- Total sales in value is limited
- Labour time is limited.
- Production capacity in units is a key factor.
18.A company sells two products A and B which are produced in its special products
division. Sales for the year 2006 were planned as follows.
| 1-st Qr(units) | 2nd Qr(units) | 3rd Qr (units)
|
4th Qr(units) | |
| Product-A
Product-B |
10,000
5,000 |
12,000
4,500 |
13,000
4,000
|
15,000
3,800 |
The selling prices were Rs.20 per unit and Rs.50 per unit respectively for A and B. Average sales returns are 5% of sales and the discount and bad debts amount to 4%
Of the total sales.
Prepare sales budget for the year 2006.
SECTION-C
(Answer any TWO Questions ) (2×20=40)
19.a) Three contracts X,Y and Z commenced on 1-stJanuary ,1stjuly and 1stOctober 2006,
respectively were undertaken by ELLORA Constructions Ltd, and their accounts on 31-st Dec.
showed the following position;
| X
(Rs) |
Y
(Rs) |
Z
(Rs) |
|
| Contract price
Expenditure; Raw material Wages General expenses
Plant purchased Materials in hand Wages accrued Work certified Work uncertified Cash received in respect of work certified
|
8,00,000
1,44,000 2,20,000 8,000
40,000 8,000 8,000 4,00,000 12,000 3,00,000
|
5,40,000
1,16,000 2,24,800 5,600
32,000 8,000 8,000 3,20,000 16,000 2,40,000
|
6,00,000
40,000 28,000 2,000
24,000 4,000 3,600 72,000 4,200 54,000 |
T he plant was installed on the date of commencement of each contract ,depreciation
is to be taken at 10% per annum. Prepare the contract accounts in Tabular form and show how they would appear in the Balance sheet as on Dec.2006.
OR
19.b)A product passes through three processes. The following details are related to the
processes during-Dec-2006.
| Total | Process-I | Process-II | Process-III | |
| Materials(Rs)
Labour (Rs) Production overhead (Rs) Output (units) Normal loss (%-of input) Scrap value |
5,625
7,330 7,330 — — — |
2,600
2,250 — 450 10 2
|
2,000
3,680 — 340 20 4 |
1,025
1,400 — 270 25 5
|
500 units @Rs.4 per unit were introduced in process-I. Production overhead is absorbed in the ratio of labour.
Prepare process accounts and abnormal loss and abnormal gain accounts.
20.a) From the following particulars , prepare a cash budget for 6 months .
| Months | Total sales
Rs |
Materials
Rs |
Wages
Rs |
Production over
head Rs |
Selling and
Dist.overhead Rs |
| Jan
Feb March April May June
|
20,000
22,000 24,000 26,000 28,000 30,000 |
20,000
14,000 14,000 12,000 12,000 16,000 |
4,000
4,400 4,600 4,600 4,800 4,800 |
3,200
3,300 3,300 3,400 3,500 3,600
|
800
900 800 900 900 1,000 |
Cash balance on 1-st jan. was Rs.10,000. A new machine is to be installed at Rs.30,000 On credit, the amount to be repaid by two equal instalments in March and April.
Sales commission at 5% on total sales is to be paid within the month following actual
Sales.Rs.10,000 being amount of 2nd call may be received in march. Share premium amounting to Rs.2,000 is also obtained with 2nd call.
Period of credit allowed by suppliers-2 months
Period of credit allowed to customers-1 month.
Delay in payment of overheads-1month.
Delay in payment of wages-1/2 month.
Assume cash sales to be 50% of the total sales.
(OR)
20.b) J& co is planning to invest in a project which requirea a capital outlay of
Rs.4,00,000. Forecast for annual income after depreciation but before tax is as
Follows.
| Year | Rs |
| 1
2 3 4 5 |
2,00,000
2,00,000 1,60,000 1,60,000 80,000 |
Depreciation may be taken as 20% on original cost and taxation at 50% of net income.
You are required to evaluate the projects according to each of the following methods.
- Pay- back period b) Rate of return on original investment c)Rate of return on average investment d)Discounted flow method taking cost of capital at 10%.
- Excess present value method.
Note;
The discount factor at 10% for the first 5-years are ; 0.909, 0.826,0.751,0.683 and
0.621.