LOYOLA COLLEGE (AUTONOMOUS), CHENNAI –600 034

B.com., DEGREE EXAMINATION – COMMERCE

FIFTH SEMESTER – APRIL 2004

CO 5501/COM 506 – COST ACCOUNTING

06.04.2004                                                                                                           Max:100 marks

1.00 – 4.00

 

SECTION – A

 

Answer ALL questions                                                                                (10 ´ 2 = 20 marks)

 

1. State whether the following statements are true or false.
2. Cost Accounting is a branch of financial Accounting.
3. Bin card is the same as stores ledger.
4. Valuation of closing stock is same under FIFO and LIFO.
5. Abnormal idle time wages are included in the cost of production.
6. Distinguish between idle time and idle capacity.
7. Distinguish between time-keeping and time-booking
8. What is machine hour rate?
9. What is the relevance of ‘escalation clauses’ provided in contracts?
10. What is Economic Batch Quantity.
11. Distinguish between joint product and by – products.
12. What is operation costing?
13. What is just in time of inventory management?
14. Explain Halsey incentive plan.

 

SECTION – B

 

Answer any FIVE questions                                                                        (5 ´ 8 = 20 marks)

 

11. What is labour Turnover? What are its causes and Explain the effects of labour Turnover.
12. What is ABC Analysis? Describe its advantages.
13. “Cost Accounting is an unnecessary Luxury for business establishments”. Do you agree with the statement.
14. A consignment consisted of two chemicals A and B.

The invoice gave the following data:

Rs.

Chemical A 4000 1bs.  @ Rs.2.5 per lb          10,000

Chemical B 3200 1bs. @ Rs.3.25 per lb         10,400

Sales Tax                                                              816

Railway freight                                                    384

———

21,600

———

A shortage of 200 lbs in A and 128 lbs. in B was noticed due to breakage’s.  What

stock rate would you adopt for pricing issue assuming a provision of 5% toward

further deterioration?

15. In a factory group Bonus system is in use which is calculate on the basis of earnings under time rate. The following particulars are available for a group of 4 workers P,Q, R, and S.
16. Output of the Group 16000 units
17. Price rate per 100 units Rs.2.50
18. No of hours worked by P-90; Q-70;      R-80;   S-100
19. Time rate per hour for P – Re. 0.80, A-Re. 1.00,  R- Rs. 1.20,  S – Re. 0.80

Calculate total wages and bonus earned by each worker.

16. The following particulars related to a contract undertaken by Ajit; Material sent to site Rs.85,349; labour engaged on site Rs.74,375; plant installed at cost Rs.15,000; Direct expenditure Rs.3,167; Establishment charges Rs. 4,126; Materials returned to stores Rs.549; work certified Rs.1,95,000; cost of work not certified Rs.4,500; Materials in hand at the end of the year Rs.1,883; wages accrued due at the end Rs.2,400; Direct expenditure accrued due at the end Rs.240; Value of plant at the end of the year Rs.11,000; The contract price has been agreed at Rs.2,50,000; cash received from the contractor was Rs.1,80,000.

You are required to prepare contract A/c showing profit.

17. Ahuja runs a tempo service in the town and has two vehicle. He furnishes you the following data and want’s you to compute the cost per running mile:

vehicle A         Vehicle B

Rs.                    Rs.

Cost of vehicle                                    25000              15000

Licensee per year                                    750                  750

Salary p.a                                               1800               1200

Drivers wages per hour                               4                     4

Cost of fuel per litre                               1.50                 1.50

Repair and maintenance per mile           1.50                 2.00

Tyre cost per mile                                    1.00                0.80

Garage rent p.a                                       1600                 550

Insurance premium p.a                             850                 500

Miles run per litre                                         6                     5

Mileage run during the year                  15000               6000

Estimated life of vehicles                   100000 miles   75000 miles

Charge interest at 10% p.a on the cost of vehicle.  The vehicles run 20 miles per hour

on an average.

18. Following information to the manufacturing of a component X – 101 is a cost centre:

Cost of materials                                 6 paise per component

Operator’s wages                                 72 paise an hour

Machine hour rate                               Rs.1.50

Setting up time of the machine           2 hours 20 MINUTES

Manufacturing time                            10 minutes per component.

Prepare cost sheet showing both products and setting up cost, total and per unit when a batch consist of ;      a) 100 components   b) 1000 components.

 

SECTION – C

 

Answer any TWO questions                                                                        (2 ´ 20 = 40 marks)

 

19. From the following particulars extracted from the books of r ltd for the month of June 1998, prepare the following,
20. Statement of Equivalent Production
21. Statement of cost
22. Process Account

• Opening stock as on 1^st June 200 units @ Rs.4.00 per unit.

Degree of completion Materials 100%

Labour and overheads 40%

• Inputs introduced during the month 1050 units.
• Output transferred to the next process 1100 units
• Closing stock 150 units

Degree of completion Materials 100%

Labour and overhead 70%

• Other relevant information.

Materials – Rs.3150;  Labour – Rs.4500;  Over head –  Rs.2250.

20. Sympionic Ltd has three production department XYZ and two service department A and B. The following estimated figures for a certain period have been made available:

Rs.                                                                                   Rs.

Rent and Rates                 10,000                         Power                                      3,000

Lighting and electricity        1,200                        Depreciation of machinery      20,000

Indirect wages                     3,000                        other expense                          20,000

following are the further details available.

X        Y          Z          A      B

Floor space (Sq.fts)                       2000    2500    3000    2000    500

light points (Nos)                             20         30        40        20      10

Direct wages (Rs)                         6000    4000    6000    3000    1000

Hours power of machine                 120         60     100        20       –

cost of machinery (Rs.)                 24000  32000  40000  2000    2000

working hours                                 4670     3020   3050     –           –

The expense of the service department A and B are to be allocated as follows:

X         Y         Z          A         B

A                     20%     30%     40%     –           10%

B                     40%     20%     30%     10%     –

you are required to calculate the overhead absorption rate per hour in respect of three production departments.  What will be the total cost of an article with material cost of Rs.80 and labour cost of Rs.40 which passes through X, Y and Z for 2,3 and 4 hours respectively?

 

21. The following figures have been extracted form the financial accounts of V ltd for the first year of its operation:

Rs.

Direct material consumption                           50,000

Productive wages                                            30,000

Factory overheads                                           16,000

Administrative overheads                                 7,000

selling and distribution overhead                      9,600

Bad debts written off                                         800

Preliminary expenses written off                        400

legal charges                                                        100

dividend received                                             1000

interest received on bank deposits                      200

Sales    (12000 units)                                   1,20,000

Closing stock:

Finished goods (400 units)                                      3200

work in progress                                          2400

The cost accounts for the same period reveal that direct material consumption was Rs.56,000.  Factory overhead is recovered at 20% on prime cost.  Administration overhead is recovered at 60 paise per unit of production, selling and distribution overheads at 80 paise per units sold.

Prepare profit and loss A/c to find out profit as per financial records and ascertain profit as per cost accounts.  Also reconcile the profits as per the two records.

 

 

 

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LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com.

TH 12

DEGREE EXAMINATION –COMMERCE

FIFTH SEMESTER – APRIL 2007

CO 5501 – COST ACCOUNTING

 

 

Date & Time: 28/04/2007 / 1:00 – 4:00          Dept. No.                                                     Max. : 100 Marks

 

 

Answer all questions:                                                                                         10 x 2 = 20

 

• State the objectives of Cost Accounting.

 

• State any three essentials of a good wage system.

 

• State whether the following statements are true or false:
  1. Bad Debts are excluded from cost accounts.
  2. Sale of factory scrap is reduced from works cost.

 

• Calculate the total earnings from the following data under Halsey plan and under Halsey-weir plan. Standard Time: 10 hours; Time taken: 8 hours; Time rate: Rs.2.50 per hour.

 

• What are the bases for apportionment of expenses given below to the different departments? 1) Depreciation, 2) Canteen expense, 3) Factory cleaning, 4) Crèche expenses, 5) Power.

 

• Write short note on equivalent production units.

 

• What is escalation clause?

 

• A transport service company is running four buses between two towns which are 50kms. Apart. Seating capacity of each bus is 40 passengers. Actual passengers carried were 75% of the seating capacity. All the four buses ran on all the days and of the month if April 2005. Each bus made one round trip per day. Calculate the total kilometers and total passenger kilometers for the month.

 

• Calculate margin of safety and the amount of actual sales from the following:

Profit Rs.10, 000; P/V ratio – 50%; BEP Sales Rs.20, 000.

 

• A factory consumes 60 units of material per day which is supplied by a vendor in lots of 240 units each at Rs.2, 400 per lot. The factory works for 300 days per annum. Each order involves handling charges of Rs.120 and Freight charges of Rs.380. The storage cost is Re. 0.50 per unit per annum. The interest cost of carry inventory works out at 1.25% per month. Calculate the EOQ.

Section – B

Answer any five only:                                                                                    5 x 8 = 40

 

11) Distinguish between Financial accounting and Cost accounting.

 

• Briefly explain various inventory control techniques.

 

• What is Labour Turnover? Explain its causes and effect. And also suggest the steps to reduce labour turnover.

 

• A company produces three products A, B and C with standard costs and quantities per unit are as follows:

Particulars                                              A                    B                     C

Quantity produced                              10, 000            20, 000            30, 000

Direct material per unit (RS)                       50                    40                    30

Direct labour per unit (RS)                         30                    40                    50

Labour hours required per unit                     3                      4                      5

Machine hours required per unit                   4                      4                      7

Number of purchase requisitions          1, 200              1, 800              2, 000

Number of set ups                                     240                  260                  300

Production overhead spilt by departments:

Department 1 = Rs.11, 00, 000 and Department 2 = Rs.15, 00,000.

Department 1 is labour intensive and Department 2 is machine intensive.

Total labour hours in department 1 – 1, 83,333 while

Total machine hours in department 2 – 5, 00,000.

Production overhead spilt by activity:

Receiving/inspecting = Rs.14, 00,000

Production scheduling /machine set up  =     Rs.12, 00,000.

Number of batches received/inspected   =                 5, 000;

Number of batches for scheduling and set-up = 800. You are required to prepare product cost statement under traditional absorption costing and Activity Based Costing method.

 

• A product passes through three processes, A, B and C. The normal wastage if each process is as follows; Process A- 3%; B- 5%; C- 8%. The wastage of process A was sold at Rs.0.25 per unit, B at Rs.0.50 per unit and C at Re.1 per unit. 10,000 units were introduced in process A at a cost of Re.1 per unit. The other expenses are:

Process-A        Process-B        Process-C

Rs.                   Rs.                   Rs.

Sundry materials                     1,000               1,500                  500

Labour                                     5,000               8,000               6,500

Direct expenses                       1,050               1,188               2,009

Actual output (units)               9,500               9,100               8,100

Prepare the process accounts, assuming that there were not opening or closing stocks. Also give the abnormal loss and abnormal gain account, normal loss account.

• The records of a company show the following:

Period                          Sales                Profit

I                                   Rs.1, 20,000    Rs.   9, 000

II                                 Rs.1, 40,000    Rs. 13, 000

Find out: a) P/V ratio. b) Break even point, c) Fixed cost, d) Profit when sales are

Rs.1, 00, 000, e) Sales required to earn a profit  of Rs.20,000, f) Margin of safety,

1. g) variable cost for period II.

 

• A) From the following information calculate: a) Economic order quantity,

1. b) Reorder level, c) Maximum level, d) Minimum level.

Normal usage is 150 units per day. Minimum usage is 100 units per day. Maximum usage is 200 units per day. Reorder period 50 to 60 days. The annual usage is 50, 000 units. The cost of purchase is Rs.100 per order. Cost per unit is Re.1 carrying cost is 10%per annum.

 

 

 

 

 

 

 

1. B) From the following particulars, prepare stores ledger by adopting Weighted Average Method of pricing of material issues:

 

Date                Receipts                                              Issues

01.01.99          600 units at Rs.20 per unit

10.01.99          400 units at Rs.24 per unit

12.01.99          800 units at Rs.22 per unit

15.01.99                                                                      500 units

16.01.99                                                                      300 units

18.01.99          400 units at Rs.28 per unit

20.01.99                                                                      300 units

22.01.99          600 units at Rs.30 per unit

25.01.99          200 units at Rs.32 per unit

27.01.99                                                                      400 units

31.01.99                                                                      200 units.

 

• The following details are available from the books of accounts of accounts of a contractor for the year ended 31^st March, 2003 with respect top particular contract No.313. He has undertaken for a manufacturing organization:

Materials sent to site                                                               5, 11,800

Labour engaged in site                                                            4, 66,100

Cost of plant installed at site                                                  1, 00,000

Direct expenses                                                                           24,000

Establishment expenses                                                              29,000

Materials returned to stores                                                          2,120

Work certified                                                                       10, 70,000

Cost of work not certified                                                          31,000

Materials in hand as on 31^st March, 2003                                   12,220

Accrued wages as on 31^st March, 2003                                      11,160

Accrued Direct expenses                                                              1,330

Value of plant as revealed on 31^st March,2003                          88,000

The contractor price agreed upon with the Contractee is Rs.13, 00,000 payment of Rs.9,90,000 has been received from the Contractee. You are required to prepare the contract account, computing and incorporating the said account the profit to be taken to the profit and loss account for the year ended 31^st March, 2003.

 

Section – C

Answer any two only.                                                                                  2 x 20 = 40

 

19) The following figures are available from financial accounts for the year 2005.

Direct Material consumed                               Rs.       2, 00,000

Direct Wages                                                              1, 00,000

Factory Overheads                                                         75, 000

Administrative Overheads                                          2, 25,000

Selling and distribution overheads                             2, 40,000

Bad debts                                                                        30,000

Preliminary expenses written off                                    40,000

Legal charges                                                                  20,000

Dividend received                                                          50,000

Interest on bank deposit received                                   20,000

Sales (1, 20,000 units)                                               18, 00,000

Closing stock (30,000 units)                                       1, 60,000

The cost accounts reveal the following:

Direct material consumed Rs.2, 20,000. Direct wages Rs.80, 000.  Factory Overheads at 20% on prime cost. Administration overheads at Rs.2 per unit produced and selling overheads at Rs.2 per unit sold.

Prepare: (1) Statement showing cost and profit; (2) Financial profit and loss account; (3) Reconciliation statement.

 

• Electronics Ltd., furnish the following information. It has three production departments A,B and C and two service departments D and E. The following figures are extracted from the records of the company:

 

Rent and Rates.          Rs.10, 000.      Power                                      Rs.  3, 000

General lighting          Rs.   1,200       Depreciation on Machinery     Rs.20, 000

Indirect wages             Rs.  3,000       Sundries                                  Rs.20, 000

 

The following further details are available:

Particulars                   A              B              C                D              E

Floor Area (Sq.mts.)   2000         2500         3000          2000             500

Light points                     10             15             20              10                 5

Direct wages (Rs)       6000         4000         6000           3000          1000

H.P.of Machine               60             30             50               10            —-

Value of Machine.Rs.60000      80000     100000           5000         5000

Working hours             6226        4208         4066

 

 

The expenses of D and E are allocated as follows:

A         B         C         D         E

D                                 20%     30%     40%     —          10%

E                                  40%     20%     30%     10%     —

 

What is the total cost of an article if its raw material cost is Rs.60. Labour cost Rs.40, and it passes through departments A, B and C for 4, 5 and 3 hours respectively?

 

• The following data are available in respect of process I for the month of October:

Opening work in progress: 2250 units at Rs.11, 250

Degree of Completion Materials – 100%; Labour – 60%; Overheads – 60%

Input of materials: 22,750 units at Rs.88, 500

Direct wages: Rs.20, 500

Production overheads: Rs.41, 000

Units scrapped: 3,000 units.

Degree of Completion: Materials – 1005; Labour – 70%; Overheads – 70%

Closing work in progress: 2, 500 units.

Degree of Completion: Materials – 100%; Labour – 80%; Overheads – 80%.

Units transferred to the next process: 19,500 units.

Normal process loss in 10% of total input (opening stock plus units put in). Scrap value is Rs.3.00 per unit. The company follows FIFO method of inventory valuation.

You are required to: 1) Prepare statement of equivalent production; 2) Statement of cost per equivalent unit for each element and cost of abnormal loss, closing work in progress and units transferred to next process; and Prepare process I account.

 

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LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

   B.Com. DEGREE EXAMINATION – COMMERCE

QB 09

FIFTH SEMESTER – November 2008

CO 5501 – COST ACCOUNTING

 

 

 

Date : 07-11-08                     Dept. No.                                        Max. : 100 Marks

Time : 9:00 – 12:00

SECTION-A                                     (10 X 2 = 20 marks)

Answer all questions.

 

1. What is cost accounting?
2. What is a cost sheet?
3. Write a note on ‘ABC’ analysis.
4. Define ‘overheads’.
5. How do you treat normal scrap realised?
6. What are the objectives of joint product costing?
7. What are ‘running charges’, in transport costing? Give example
8. Give the meaning of ‘work certified’ and ‘work uncertified’.
9. A manufacturer buys a certain equipment from outside suppliers at Rs. 30 per unit.

Total annual needs are 80,000 units. The following further data are available.

Annual return on investment 10%  Rent, insurance, taxes per unit per year Rs.13

Cost of placing an order Rs. 100. Determine the economic order quantity.

10. From the following particulars supplied by the personnel department of a firm,

Calculate labour turnover:

Total number of employees at the beginning of the month       2010

Number of employees who are recruited during the month          30

Number of employees who left during the month                         50

Total number of employees at the end of the month                 1990

 

SECTION- B                                   (5 x 8 = 40 marks)

Answer any five questions.

 

11. What is material control? What are its advantages?
12. Distinguish between allocation and apportionment of overheads?
13. From the following prepare a stores ledger under weighted average method of pricing

Out issues.   2005 August

1 Opening balance 50 units @ Rs. 3 per unit

5  Issued to production                   2 units

7 Purchased 48 units @ Rs.4 per unit

August 9 Issued 20 units to production

August 19 Purchased 76 units @ Rs.3 per unit

August 24 Received back into stores 19 units out of 20 units issued

on 9^th  August 2005.

August 27 Issued to production 10 units.

 

14. During first week of October 2004, Mr. R produced 300 articles. He received wages for a guaranteed 48 hours week @ the rate of Rs.4 per hour. The estimated time to produce one article is 10minutes and under the incentive scheme the time allowed is increased by 20%. Calculate his gross wages according to

(a) Piece-work with a guaranteed weekly wage and

(b) Rowan premium bonus.

 

15. Profit disclosed by a company’s cost accounts for a year was Rs.50,000 whereas the net profit as

disclosed by the financial accounts was Rs.29,750. Following information is available:

• overheads as per cost accounts were estimated at Rs.8,500. The charge

for the year shown by the financial accounts was Rs.7,000.

(b) Director’s fees shown in the financial accounts only for Rs.2000.

(c) The company allowed Rs.5000 as provision for doubtful debts.

(d) Work was commenced during the year on a new factory and expenditure of Rs.30,000 was made. Depreciation at 5%  per annum was provided for in the financial accounts for 6 months.

(e) Share transfer fees received during the year was Rs.1000

(f) Provision for income tax was Rs.15000.

From the above, prepare a statement reconciling the figures shown by the cost and financial accounts.

 

16. From the following particulars, compute the machine hour rate.

Cost of the machine Rs.11000

Scrap value               Rs.   680

Repairs for the effective working life Rs.1500

Standing charges for 4 weekly period Rs.40

Effective working life 10000 hours.

Power used: 6 units per hour at 5paise per unit

Hours worked in 4 weekly period: 120 hours.

 

17. The following information is extracted from a Job ledger, in respect of Job 101:

Materials                                                    Rs.3400

Wages:

Dept A: 80 hours at Rs.2.50 per hour

B: 60 hours at Rs.4 per hour

Variable overheads:

Dept A: Rs.5,000 for 4,000 direct hours

B: Rs.6,000 for 3,000 direct hours

Fixed overheads:   Rs.7,500 for 10,000 hours of normal working time of the factory. Calculate the cost of Job No.101 and estimate the percentage of profit if the price quoted is Rs.4,750.

 

18. In the manufacture of a product B, 1000 kgs of material at Rs.8 per kg was supplied to the first process. Labour cost amounted to Rs.2000 and production overhead incurred was Rs.1,000. The normal loss has been estimated at 10% which could be sold at Rs.2 per kg. The actual production of the process was 880 kgs. Show the process 1 account.

SECTION-C                                               (2×20=40 marks)

Answer any two questions.

19. Prepare the cost sheet to show the total cost of production and cost per unit of goods manufactured

by a company for the month of July, 2007. Also find the cost of sales and profit.

Rs.                                                         Rs.

Stock of Raw Materials, 1-7-2007         3,000   Office Rent                                   500

Raw Materials purchased                     28,000   General expenses                         400

Stock of Raw materials, 31-7-2007       4,500   Discount on sales                          300

Manufacturing wages                            7,000  Advertisement expenses to be

Depreciation on plant                            1,500      charged fully                              600

Loss on the sale of a plant                        300   Income tax paid                          2,000

Factory rent and rates                             3,000

The number of units produced during July 2007 was 3,000.

The stock of finished goods was 200 and 400 units on 1-7-2007 and 31-7-2007 respectively. The total cost of the units on hand on 1-7-2007 was Rs.2,800. All these had been sold during the month.

 

20. The following particulars relate to a manufacturing company which has 3 production department

X,Y,and Z and two service departments A and B.

Departments

X                 Y            Z                 A                    B

Total departmental

Overheads as per primary

Distribution                             Rs.6,300           7,400        2,800           4,500              2,000

The company decided to charge the service department cost on the basis of the following percentages:

Service departments                                 Production Dept.                       Service Dept.

X                 Y             Z                A                    B

A                                                40%             30%        20%            —                    10%

B                                                 30%            30%        20%            20%                —

Prepare secondary distribution summary charging the costing the overheads of the service departments to the production departments under repeated distribution method.

 

21. S.V. Construction Ltd. have obtained a contract for the construction of a bridge. The value of the

contract is Rs.12,00,000 and the work commenced on 1^st October 2005. The following details are

shown in their books for the year ended 30^th September 2006.

Plant purchases Rs.60,000, wages paid Rs.3,40,000, Material issued to site Rs.3,36,000, Site

expenses Rs.8,000, General overheads apportioned Rs.32,000, Wages accrued as on 30-09-2006

Rs.2,800. Materials at site as on 30-09-2006 Rs.4,000. Direct expenses accrued as on 30-09-2006

Rs.1,200. Work not yet certified at cost Rs.14,000. Cash received being 80% of the work certified

Rs.6,00,000. Life of the plant purchased is 5 years and the scrap value is nil.

• prepare the contract account for the year ended 30-09-2006.
• Show the amount of the profit which you consider might be fairly taken on the contract and how you have calculated it.

 

 

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   LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

KP 25

B.Com. DEGREE EXAMINATION – COMMERCE

FIFTH SEMESTER – April 2009

CO 5501 – COST ACCOUNTING

 

 

 

Date & Time: 17/04/2009 / 9:00 – 12:00        Dept. No.                                                               Max. : 100 Marks

PART – A

Answer ALL questions                                                                                              (10 x 2 = 20 marks)

 

1. List out the different methods of costing.
2. Explain the meaning of prime cost.
3. What is Inventory Turnover Ratio?
4. Write a note on ‘Idle Time’.
5. What is ‘Over Absorption’ of overheads?
6. Explain the meaning of ‘work certified’.
7. What do you understand by ‘Normal Loss’?
8. Find out the selling price: Prime cost per unit Rs.720;  works overhead 20% of works cost office overhead: 10% of cost of production; selling over head 20% on sales.
9. Indicate the basis of apportionment for the overhead expenses mentioned below:-

• Rent, Rates and taxes 2) power          3) Factory cleaning      4) Creche expenses.

10. Ascertain Bonus under Halsey plan:-

Standard time: 15 Hrs; Actual time 10 Hrs; Time rate Rs.2 per Hour.

 

                                                                          PART – B

 

Answer any FIVE Questions                                                                                     (5 x 8 = 40 marks)

 

11. Explain the scope and objectives of Cost Accounting?

 

12. The accounts of a machine manufacturing company disclose the following information of six months ending 31^st December 2007. Materials used    1,50,00                  Direct wages Rs.1,20,000;       Factory overheads Rs.30,000        Administrative expenses Rs.15,000

Prepare cost sheet for the half year and calculate the price which the company should quote for the manufacture of a machine requiring materials valued at Rs.1,250 and expenditure in productive wages Rs.750, so that the price might yield a profit of 20% on the selling price.

 

13. a) Two components A and B are used as follows:-

Normal usuage             : 3,000 units per week each.

Minimum usuage : 1,500 units per week each.

Maximum usuage : 4,500 units per week each.

Re order quantity A: 13,000 units ; B: 14,000 units

Reorder period : A – 4 to 6 weeks ; B – 2 to 4 weeks.

Calculate for each component    a) Reorder level  b) Minimum level   c) Maximum level   d) Average stock level.

1. b) X Y Ltd. Purchased and issued the materials in the following Order.

2005 march 1. Purchased 300 units at Rs.3 per unit.

5. purchased 500 units at Rs.4 per unit.
6. Issued 500 units.

12 purchased 700 units at Rs.4.50 per unit

15 Issued 700 units

20 Purchsed 300 units at Rs.5 per unit

30 Issued  150 units

Ascertain the quantity of closing stock as on 31^st march and state its value under ‘weighted average cost’ method.

 

14. The following is the data relating to materials received from a supplier as per the invoice.

Material X – 10,000 kgs at Rs.5 per kg            50,000

Material Y – 5,000 kgs at Rs.8 per kg 40,000

Freight                                                               9,000

Excise duty (at 4%)                                3,600

———–

1,02,600

————

Shortage due to breakage, considered as normal – Material X 50 kgs.  Material Y 40 kgs.

Ascertain the effective cost of the materials per kg.  If provision has to be made for a further wastage due to handling in stores of 50 kgs and 60 kgs.  Respectively for material X and Y.

 

15. Calculate the earning of workders X and Y under (A) Straight piece rate system and (B) Taylor’s differential piece rate system form the following details:

Standard time per unit = 12 minutes, Standard rate per hour = Rs.60, Differentials to be used 80% and 120%.

In a particular day 8 hours, workder ‘X’ produced 30 units and worker ‘Y’ produced 50 units.

16. Compute Machine hour rate form the information given below:-

Cost of Machine X      Rs.13,500

Life of the Machine     10 years

Estimated Scrap value after 10 year Rs.1,980

Working hours 1,800

Insurance (per annum) Rs.45

 

Cotton wastes (per annum) Rs.75

Rent for dept (per annum) Rs.975

Foreman’s Salary (per annum) Rs.7,500

Lighting for dept (per annum) Rs.360

Repairs for entire life Rs.1,440

Power : 10 units @ 7.5 paise per unit.

Machine X occupies 1/5 of the area and foreman devotes 1/4 th of his time to the machine.  The machine has two light points out of the total 12 for lighting in the department.

17. The following is the information relating to contract No.123.

Contract price Rs.6,00,000      Wages Rs. 1,64,000

General expenses Rs. 8,600     Raw Materials Rs.1,20,000  Plant Rs.20,000

As on date, cash received was Rs.2,40,000 being 80% of work certified.  The value of materials remaining at site was Rs.10,000.  Depreciate plant by 10%.  Prepare contract Account showing profit to be credited to P&L A/C.

18. Lakshmi Travels, a transport company is running a fleet of six buses between two towns 75 kms apart. The seating capacity of each bus if 40 passengers. The following particulars are available for the month of April, 2005.

 

Wages of Drivers, Conductors, etc                  Rs.  3,600

Salaries of office and supervisory staff                       Rs.  1,500

Diesel oil etc                                                    Rs.10,320

Repairs and maintance                                                 Rs.  1,200

Taxes and Insurance                                        Rs. 2,400

Depreciation                                                    Rs. 3,900

Interest and other charges                                Rs. 3,000

The actual passengers carried were 80% of the capacity.  All the buses run all the days in the month.  Each bus made one round trip per day.  Find out the cost per passenger kilometre.

 

PART – C

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

 

19. The profit &Loss account of oil India Pvt.ltd. for the year ended 31.3.2007 is as follows:-

To Materials                 4,80,000                      By Sales                          9,60,000

To wages                     3,60,000                      By Closing stock              1,80,000

To Direct Expenses      2,40,00            0                      By work-in-progress

To Gross profit                        1,20,000                     Materials       30,000

Wages          18,000

Direct Exp    12,000              60,000

————-                                        ————-  ————–

12,00,000                                                          12,00,000

To Administrative                                                                                —————

Expenses                     60,000                                     By Gross profit            1,20,000

To Net Profit                60,000

————-                                                        —————

1,20,000                                                          1,20,000                                 ———–                                                            —————-

As per the cost records the direct expenses have been estimated at a cost of Rs.30 per kg and administrative expenses at Rs.15 per kg.  The profit as per costing records is Rs.1,10,400.  During the year 6,000 kgs.  Were manufactured and 4,800 kgs were sold.

Prepare a statement of costing profit & loss account and reconcile the profit with financial records.

 

20. In a factory, there are two service departments I & II and three production departments A,B and C. In April 2002, the departmental expenses were:

Departments    A                     B                      C                      I                       II

Rs.                   Rs.                   Rs.                   Rs.                   Rs.

6,50,000          6,00,000          5,00,000          1,20,000          1,00,000

The expenses of the service departments are allotted on a percentage basis as follows:-

A         B          C          I           II

I           30        40        15        –           15

II          40        30        25        5          –

Prepare a statement showing distribution of the expenses of the two services department on a percentage

basis by repeated distribution method.

 

21. The product of a company passes through two processes to completion known as A and B. from the past experience its is ascertained that Loss is incurred in each process as:

Process A 2% Process B 5%

In each case the percentage of loss is computed on the number of units entering the processs concerned.

The lossof each process possess scrap value.  The loss of processes A and B is sold at Rs.5 per 100 units.

The out put ofeach process passes immediately to the next process and the finished units are passed into stock.

Process A         Process B

Materials consumed                 Rs.6,000          Rs.4,000

Direct Labour                          Rs.8,000          Rs.6,000

Manufacturing expenses                      Rs.1,000          Rs.1,000

20,000 units have been issued to process A at a cost of Rs.10,000.  The out put of each process has been as under:   Process A 19,500;       Process B 18,800.

 

Prepare Process Accounts.

 

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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.

7. 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

8. 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.

9. 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.

10. 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)

 

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

 

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

 

13. The financial records of AB Ltd reveal the following data for the year ended 31^st 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.

 

14. From the following data, you are required to work out the earnings of a worker for a week under:
15. a) Straight Piece Rate
16. b) Taylors Differential Piece Rate
17. c) Halsey Plan
18. 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.

 

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

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

Receipts during the month:

3^rd                    300 units at Rs.15 per unit

7^th                   900 units at Rs.16 per unit

23^rd                  400 units at Rs.18 per unit

Issues during the month:

5^th        500 units

8^th        800 units

27^th      500 units

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

 

16. 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.

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

the year ended 31^st 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.

 

18. 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)

 

19. 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.

 

20. 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.

 

21. 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 (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

 

2. Normal and Abnormal loss

 

3. Taylor’s differential piece rate system

 

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

 

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

 

6. 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.

 

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

 

8. 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.

 

9. 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.

 

10. 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

 

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

 

13. 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.

 

14. 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.

 

15. 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.

 

16. 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 30^th November a shortage of 50 units was found.

Prepare the Stores Ledger under,  Weighted Average method.

 

17. 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.

 

18. 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

 

19. The Profit and Loss Account of Oil India (Pvt) Ltd., for the year ended 31^st 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.

 

 

 

 

20. 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.

 

21. 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 31^st December, 2010.

 

 

 

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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)

 

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

 

6. 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

 

7. 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.

 

8. What is machine hour rate?
9. 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.

 

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

PART – B

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

11. 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

12. 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

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

 

14. 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.

 

15. 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

 

 

 

16. 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.

 

17. 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

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

 

PART – C

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

 

19. 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	–

 

20. 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 1st 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.

 

21. 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 (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)

 

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

 

6. 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

 

7. From the following data calculate minimum level for material X

Delivery time                     2 to 4 weeks

Consumption                     100 to 150 units per week

 

8. 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.

 

9. 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.

 

10. 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)

 

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

 

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

 

13. 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.

 

14. 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:
15. Time-rate
16. Piece work with a guaranteed weekly wage
17. Rowan premium bonus
18. Halsey premium bonus, 50% to workman.

 

15. 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.

 

16. 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.

 

17. 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.

 

18. 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)

 

19. 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

 

 

 

20. From the following data, calculate:
21. Equivalent production
22. 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

 

21. 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.
		A	B	C	P	Q
	50,000            150 12,50,000            –       10,000              60	15,000             60  3,00,000       6,226       2,000            10	10,000            30              4,00,000      4,028      2,500           15	15,000             50  5,00,000       4,066       3,000            20	7,500         10 25,000       –   2,000        10	2,500      –  25,000      –        500            5

Service department’s expenses allocation:

A                             B                             C                             P                             Q

P                             20%                        30%                        40%                        –                              10%

Q                             40%                        20%                        30%                        10%                        –

You are required to:

1. Compute the overhead rate per hour for production departments using the repeated distribution method; and
2. 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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