## Loyola College B.Com Corporate & Secretaryship Nov 2006 Cost Accounting Question Paper PDF Download

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034  B.Com DEGREE EXAMINATION – CORPORATE & SECRETARYSHIP

 AV 07

FIFTH SEMESTER – NOV 2006

# CR 5501 – COST ACCOUNTING

(Also equivalent to COS 507)

Date & Time : 27-10-2006/9.00-12.00         Dept. No.                                                       Max. : 100 Marks

Section: A

Answer all questions:                                                                                    10 x 2 = 20

• Define ‘Cost centre’ and ‘Cost unit’.

• 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.

• What is VED Analysis?

• Calculate Economic Ordering quantity: annual usage; 6000 units, Cost of Materials per unit Rs.20; Cost placing and receiving one order Rs.60; annual carrying cost Rs.2 per unit.

• Ascertain the labour turnover under separation method;

Employees on 1-1-2003:14,000

Employees on 31-12-2003: 16,000

Employees who left during 2003: 750

• What is meant by “Absorption of overheads”?

• Fill in the blanks:
1. a) A cost is ———- if it does not change with change in activity level.
2. b) Power cost is apportioned on the basis of ———- hours.
3. c) ———- rate of absorption is suitable for labour oriented manufacturing.
4. d) Crèche expenses are apportioned on the basis of —————————-.

• 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.

Section – B

Answer any five only:                                                                               5 x 8 = 40

• Explain the merits and demerits of perpetual inventory system.

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

• What is Activity Based Costing? Differentiate it from the traditional costing system. Also state the advantages of ABC.

• The following figures have been obtained from the cost records of  Manufacturing Company for the year 2004:

Cost of Materials                                2, 40, 000

Wages of labour                                  2, 00, 000

Distribution Expenses                             56, 000

Selling Expenses                                     89. 600

Profit                                                   1, 68, 000

A work order has been executed in 1993 and the following expenses have been incurred: cost of Materials Rs.32, 000 and Wages for Labour Rs.20, 000. Assuming that in 2005 the rate for factory overhead went up by 20%, distribution charges went down by 10% and selling and administration charges went up by 12 ½ %, at what price should the product or the job be quoted so as to earn the same (earlier) rate of profit on the selling price?.  Show the full working. Distribution, Administration and Selling charges are based on the factory cost.

• From the following particulars work out the earnings for the week of a worker under (A) Straight Piece- rate; (B) Taylor’s Differential piece rate; (C) Halsey Premium System; (D) Rowan System.

Number of working hours per week 48.

Wages per hour – Rs.3.75

Normal time per piece – 20 minutes.

Rate per piece – Rs.1.50

Normal output per week – 120 pieces

Actual output for the week – 150 pieces.

• (A) Compute the various stock levels from the following data:

Maximum consumption in a month 300 units; Minimum usage in a month 200 units; Average usage in a month 225 units; Time lag for procurement of materials: Maximum 6 months and Minimum 2 months. Reorder quantity 750 units.

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

Date                Receipts                                              Issues

01.01.90          300 units at Rs.10 per unit

10.01.90          200 units at Rs.12 per unit

12.01.90          400 units at Rs.11 per unit

15.01.90                                                                      250 units

16.01.90                                                                      150 units

18.01.90          200 units at Rs.14 per unit

20.01.90                                                                      300 units

22.01.90          300 units at Rs.15 per unit

25.01.90          100 units at Rs.16 per unit

27.01.90                                                                      200 units

31.01.90                                                                      100 units.

• 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.

• U construction Ltd. undertook a contract in 1992 for road construction. The contract price was Rs.10, 00,000 and its estimated cost of completion would be Rs.9, 20,000. At the end of 1992 the company received Rs.3, 60,000 representing 90% of work certified. Work not yet certified was Rs.10, 000. Expenditure incurred on the contract during 1992 was as follows:

Materials Rs.50, 000, Labour Rs.3, 00,000, Plant Rs.20, 000, Materials costing Rs.5, 000 were damaged and had to be disposed for Rs.1000. Plant to be depreciated by 25% Prepare contract account for 1992 in the books of U construction Ltd. also show the profit can be reasonable credited to profit and loss account in respect of the contract.

Section – C

Answer any two only.                                                                            2 x 20 = 40

• The profit as per financial books for the year ended 31st December,2005 is

Rs.2, 98,000. Following details are ascertained on comparison of cost and     financial accounts:

Cost Accounts.           Financial Accounts.

Rs.                              Rs.

Stock on 1-1-2005

Raw Materials                                    1, 00, 000                    1, 20, 000

Work –in-progress                              1, 30, 000                    1, 40, 000

Finished Goods                                      90, 000                    1, 00, 000

Stock on 31.12.2005

Raw Materials                                       86, 000                         80, 000

Work –in-progress                                 74, 000                        60, 000

Finished Goods                                 1, 24, 000                     1. 18, 000

Direct expenses                                                                          60, 000

Purchases                                                                               8, 00, 000

Wages                                                                                                4, 00, 000

Factory Expenses                               4, 00, 000                    4, 00, 000

Sales                                                                                     22, 00, 000

Office Expenses                                     46, 000                        60, 000

Income Tax                                                                                15, 000

Loss on sale if investments                                                        17, 000

Selling expenses                                    90, 000                         80, 000

Prepare a cost sheet showing costing profit and also draw up a reconciliation statement as on 31.12.2005.

• A factory has three production departments A, B and C and two service departments X and Y. the budgeted expenditure for the month of march 2002 are given below:

Rs.

Indirect wages                                    20, 000

Insurance                                    7, 000

Rent                                        10, 500

Power                                      14, 000

Lighting                                     5, 000

Depreciation                         1, 05, 000

The other details are:

Particulars                           A                 B               C                X                Y

Direct wages (Rs.)          75,000          40,000        60,000          10,000         15,000

Floor Area (sq.mtrs)            400               500             600               300              300

Value of Machine (Rs) 2,00,000        2,50,000    2,00,000          30,000        20,000

Horse Power                          40                 50              40                    5                  5

Direct materials (Rs.)      10,000          20,000       10,000             5,000           5,000

No. of light points                    8                   7                5                    3                  2

Service department overheads are apportioned on the following basis:

A         B         C         X         Y

Service Dept. X:         50        30        10        —          10

Service Dept. Y:         30        40        20        10        —

Assuming that overheads are recovered as percentage on direct wages, calculate the overhead recovery rates.

• The following data are available in respect of process I for February,2000:

Opening stock of work in progress: 800 units at a cost of Rs.4000.

Degree of completion of opening work in progress:

Materials   100%

Labour         60%

Input of materials at a total cost of Rs.36,800 for 9200 units.

Direct wages incurred Rs.16,740

Units scrapped 1,200 units. The stage of completion of these units was:

Materials         100%

Labour               80%

Closing work in progress 900 units. The stage of completion of these units was:

Materials         100%

Labour               70%

7,900 units were completed and transferred to the next process.

Normal loss is 8% of the total input (opening stock plus units put in)

Scrap value is Rs.4 per unit.

You are required to:

1. Compute equivalent production.
2. Calculate the cost per equivalent unit for each element.
3. Calculate the cost if abnormal loss or gain, closing work in progress and the units transferred to the next process using the FIFO method, and
4. Show the process account for February 2000.

Go To Main Page

## Loyola College B.Com Corporate & Secretaryship Nov 2008 Cost Accounting Question Paper PDF Download

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – CORPORATE SECRETARYSHIP

# LA 06

FIFTH SEMESTER – November 2008

# BC 5501 – COST ACCOUNTING

Date : 05-11-08                     Dept. No.                                        Max. : 100 Marks

Time : 9:00 – 12:00

SECTION – A

Answer ALL questions                                                                                               (10 x 2 = 20 marks)

1. What is perpetual inventory system?
2. Explain EOQ.
3. Give reasons as to why it is necessary to reconcile cost accounts and financial

accounts.

1. Explain with example ‘first-in- first-out’ (FIFO) method of stock valuation.
2. Differentiate between job costing and process costing.
3. How much of profit would you allow to be considered in the following case ?

Rs.

Cost incurred so far for contract      :    2,80,000

Contract price                                   :    5,00,000

Uncertified work                              :       30,000

Retention money 10%

1. Mr. X runs a tempo service and has 5 vehicles. Distance traveled by each vehicle per

–  10%.  Percentage of vehicle laid-up for repairs – 5%.  Effective days in a month –

1. Calculate quintal kms of the vehicles.
2. Calculate direct labour hour rate from the following:

Total number of workers-100; Working days in a year-300; No. of hours per day

worked -8; Idle time -5%; Factory overheads-Rs. 11,400.

1. The records of Anand Company present the following data for the month of

August 2008. Direct labour cost-Rs.16,000(160% of factory overheads); cost

of production-Rs. 56,000;  administration expenses-2,600; opening stock of raw

materials-Rs. 8,000 and closing stock of raw materials-Rs. 8,600; sales for the

month-Rs. 75,000. Prepare statement of cost.

1. Calculate earnings of Worker ‘A’ under straight piece system and Taylor’s

differential piece rate system.  Normal rate per hour Rs. 2.40;standard time per

unit-30 seconds; Worker ’A’ produced 800 units per day.

SECTION – B

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

1. What do you mean by elements of costs? Discuss the various elements of costs.
2. What is labour turn-over? Explain its causes and effects and also suggest the steps to

reduce labour turn-over.

1. Production sections of a factory working on the job order system pay their workers

under the Rowan Premium  Bonus Scheme.  Workers also get a Dearness allowance

of Rs. 12 per week of 55 hours.

A  worker’s basic wage is Rs. 2 per day of 8 hours and his time sheet for a week is

summarised below:

Job No.                  Time allowed                      Time taken

1844                             25 hrs                               20 hrs

1926                             30 hrs                               20 hrs

Idle time(waiting)                                                                 8 hrs

48 hrs

Calculate the gross wages he has earned for the week and indicate the accounts

to which the wages amounts will be debited.

1. In a factory, there are two service departments S1 and S2 and three production

departments P1, P2, and P3.  In April 1998, the departmental expenses were:

Departments       P1                    P2                  P3                  S1                   S2

Rs.           6.50,000         6,00,000        5,00,000         1,20,000        1,00,000

The service department expenses are allotted on a percentage basis as follows:

Service Departments               Production Deptts.                         Service Deptts.

P1           P2            P3                    S1                  S2

S1                           30           40             15                    —                   15

S2                           40           30             25                     5                    —

Prepare a statement showing the distribution of the two service departments

expenses to the three departments.

1. Utkal Construction Ltd. took a contract in 2007 for road construction. The contract

price was Rs. 10,00,000 and its estimated cost of completion would be Rs. 9,20,000.

at the end of 2007, the Company has received Rs. 3,60,000 representing 90% of

work certified.  Work not yet certified had cost Rs. 10,000.

Expenditure incurred on the contract during 2007 was as follows: Materials

Rs. 50,000; Labour Rs. 3,00,000; Plant Rs. 20,000.

Materials costing Rs. 5,000  were damaged and had to be disposed of for Rs. 1,000

Plant is considered as having depreciated by 25%.

Prepare Contract Account for 2007 in the books of Utkal Construction Ltd.

16.Union Transport Company supplies the following details in respect of a truck of 5

tonne capacity:

Cost of truck                            Rs. 4,50,000

Estimated life                           10 years

Diesel, oil, grease                     Rs. 150 per trip each way

Repairs & maintenance            5,000 per month

Drivers’ wages                         5,000 per month

Cleaners’ wages                       2,500 per month

Insurance                                  4,800 per year

Tax                                           2,400 per year

General supervision charges    4,800 per year

The truck carries goods to and from the city covering a distance of 50 km. each way.

In outward trip, freight is available to the extent of full capacity and on return 20%

of capacity.  Assuming that the truck runs on an average of 25 days a month, work

out: (a) Operating cost per tonne-km (b) Rate per tonne per trip that the company

should charges if a profit of 50% on freight is to be earned.

17.Ace Ltd. manufactures a product and the following particulars are collected for

the year ended March, 2000.

—Monthly demand(units)                 1,000

—Cost of placing an order(Rs.)            100

—Annual carrying cost(Rs. per unit)      15

—Normal usage(units per week)             50

—Minimum usage(units per week)         25

—Maximum usage(units per week)        75

—Re-order period(weeks)                      4-6

Your are required to calcultate (i) Re-order quantity, (ii) Re-order level,

(iii) Minimum level, (iv) Maximum level, (v) Average stock level.

1. 10,000 units of raw materials are introduced into a process at cost of Rs. 20,000. Wages

and overheads for the process are Rs. 5,100 and Rs. 3,400 respectively.  7,500 units

were completed; of the remaining 2,500 units on the average 40% work has been done

in respect of labour and overheads.  Ascertain the cost of completed units and

work-in-progress at the end.

SECTION – C

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

1. South Viscose Ltd. has furnished you the following information from the financial

books for the year ended 31st March 2008.

Profit and Loss Account

For the year ended 31st March 2008

 Opening Stock 500 units at Rs. 35 each Materials consumed Wages Gross Profit c/d   Factory overheads Administration overhead Selling expenses Bad debts Preliminary expenses Net Profit Rs.   17,500 2,60,000 1,50,000  3,02,500  7,30,000 94,750 1,06,000 55,000 4,000 5,000     48,000 3,12,750 Sales: 10,250 units Closing stock: 250 units @ Rs. 50 each     Gross Profit b/d Interest Rent Received Rs.   7,17,500   12,500 ________  7,30,000 3,02,500 250 10,000     ________ 3,12,750

The cost sheet shows the cost of materials as Rs. 26 per unit and the labour cost as

Rs. 15 per unit.  The factory overheads are absorbed at 60% of labour cost and

administration overheads at 20% of factory cost.  Selling expenses are charged at

Rs. 6 unit.  The opening stock of finished goods is valued at Rs. 45 per unit.

You are required to prepare:

(i) a statement showing profit as per cost accounts for the year ended 31st March

2008.

(ii) a statement showing the reconciliation of profit disclosed in cost accounts

with the profits shown in the financial accounts.

1. From the following details of stores receipts and issues of materials “EXE” in a

manufacturing unit, prepare the Stock Ledger using Weighted Average Method of

valuing the issues.

2005

Nov.    1 Opening stock 2,000 units @ Rs. 5.00 each

3  Issued 1,500 units to production

4  Received 4,500 units @ Rs. 6.00 each

8  Issued 1,600 units to production

9  Returned to stores 100 units by Production Department(from the issues

of Nov. 3)

16  Received 2,400 units @ 6.50 each

19  Returned to supplier 200 units out of the quantity receive on Nov. 4

20  Received 1,000 units @ Rs. 7.00 each

24  Issued to production 2,100 units

27  Received 1,200 units @ Rs. 7.50 each

29  Issued to production 2,800 units.

(Use rates upto two decimal places)

1. Product ‘Z’ is obtained after it passes three distinct processes. The following

information is obtained from the accounts for the month ending March, 2005:

Process

Items                                                   Total               I             II             III

Rs.               Rs.          Rs.           Rs.

Direct material                                    7,542            2,600      1,980        2,962

Direct wages                                       9,000            2,000       3,000        4,000

Production overheads                         9,000               —              —              —

% of Normal Loss to input                                         5%         10%          15%

Output(in units) during the month                              950          840          750

Value of scrap per unit(Rs.)                                          2              4              5

1,000 units at Rs. 3 each were introduced to process I.  There was no stock of

material or work-in-progress at the beginning or end of the period.  The output of

each process passess direct to the next process and finally to finished stores.

Production overhead is recovered on 100 per cent of direct wages.

Prepare process cost accounts and other related accounts.

## Loyola College B.Com Corporate & Secretaryship April 2009 Cost Accounting Question Paper PDF Download

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

 IR 13

B.Com. DEGREE EXAMINATION – CORPORATE SECRETARYSHIP

FIFTH SEMESTER – April 2009

# BC 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. ABC stock control.
2. Distinguish between ‘Fixed’ and ‘Variable’ cost.
3. Labour Turnover
4. Rowen plan
5. Machine Hour Rate
6. ‘Joint products’ and ‘By products’
7. Economic batch quantity
8. From the following calculate Reorder Level and Minimum Level:

Usage 200 to 300 units per day; reorder period 8 to 10 days

1. Standard time allowed for a job is 20 hours. X completes the job in 15 hours. Rate per hour is Rs.10. Calculate his earnings under Rowan Plan.
2. Find out the economic ordering quantity (E.O.Q) from the following particulars.

Annual usage : 6,000 units

Cost of material per unit : Rs.20

Cost of placing and receiving one order : Rs.60

Carrying cost 10% per unit per annum

PART  B

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

1. Distinguish between:
2. Bin card and Stores Ledger
3. Allocation, Apportionment and Absorption of overheads

1. Distinguish between ‘idle time’ and ‘overtime’. Explain their treatment in Cost Accounts.

1. From the following particulars, calculate the earnings of workers, A,B and C, under Taylors differential piece rate system:

Standard time per unit 6 minutes

Normal rate Rs.5 per hour

Differential piece rates:

80% of piece rate below the standard

120% of piece rate at or above the standard

In a day of 8 hours, A produced 70 units, B produced 80 units and C produced 100 units.

1. A purchased and issued materials in the following order:

March 1st – purchased 300 units at Rs.3 per unit

5th  purchased 500 units at Rs.4 per unit

10th issued 500 units

12th purchased 700 units at Rs.4.50 per unit

15th issued 700 units

20th purchased 300 units at Rs.5 per unit

21st issued 200 units

On 31st a stock shortage of 20 units was noticed.

Prepare stores ledger under Weighted Average Method

1. From the following data prepare a reconciliation statement:

Rs.

Profit as per financial accounts                                                                                       2,40,500

Under-valuation of opening stock in cost accounts                                                                   15,000

Overvaluation of closing stock in cost accounts                                                             7,000

Dividend received during the year                                                                                                     5,750

Goodwill  written off during the year                                                                                9,000

Notional interest charged in Cost Accounts                                                                  18,000

1. From the following data calculate the cost per km. of running a vehicle:

Value of vehicles                                                                  Rs.25,000

Road licence fee per year                                                 Rs.      750

Supervisor’s salary per annum                                       Rs.   1,800

Insurance charges per year                                             Rs.   1,200

Garage rent per year                                                          Rs.   3,200

Driver’s wages per hour                                                    Rs.   4

Cost of petrol per litre                                                       Rs.   6.50

Km. per litre                                                                                           6

Tyre allocation per km  Re. 2.00

Repairs and maintenance per annum                         Rs.18,000

Estimated life                                                                        1,00,000 kms

Estimated annual kilometers                                          12,000

The vehicle runs for 20 km per hour on an average.

1. Factory uses job costing. The following cost data are available for the year ending 31st December 2008:

Direct material Rs.9,00,000

Direct wages Rs.7,50,000

Sales Rs.36,54,000              Prepare:   a)     A cost sheet and ascertain the profit for the year.

1. b) In the year 2009 the company received an order for a job which would required direct material

Rs.12,000 and direct labor Rs.7,500. What price should the company charge for this job, if the

factory intends to earn the same rate of profit on sales as earned in 2007/2008, assuming selling

overheads have increased by 15%. The factory recovers, factory overheads as a percentage on

wages and administration and selling overheads as a percentage of works cost.

1. A by-product B is derived in the course of manufacture of product A. From the following data calculate the profit made on Product A:

The total expenses incurred upto the split off point is Rs.19,500. Separate expenses incurred for A and B are Rs.12,500 and Rs.3,100 resp. 100 kgs of A and 50 kgs of B were produced. B was sold at Rs.120 per kg on which the profit earned was 30%.

Selling price of Product A is Rs.400 per kg.

PART  C

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

. 19.  A company manufacturing two products A and B gives you the following data:

Product                                                   A                                  B

Production in units                                   6000                             4000

Raw material per unit (Rs.)                           50                                  30

Labour cost per unit (Rs.)                           20                                  10

Labour hours per unit                                    4                                    2

Number of set ups                                      10                                  20

Number of deliveries                                   24                                  14

The Overhead expenses were Rs.128,000 consisting of      Set up costs Rs.90000; Delivery expenses Rs.38000.

Compute the production cost, per unit, of the two products A and B, if overheads are recovered using:

1. Rate per labor hour         b)Activity based costing

1. From the following prepare a Contract Account and Contractee’s account for the three years 2007, 2008 and 2009:

2007(Rs.)             2008(Rs.)             Rs.2009(Rs.)

Material issued                                                     1,10,000               1,20,000                   80,000

Wages                                                                      2,30,000                   68,000               2,20,000

Machinery issued                                                                    50,000               –                              –

Value of machinery at the end                           45,000                   40,000                   36,000

Materials returned to stores                                 1,000                        500                –

Material at site                                                            3,000                     4,000                     2,000

Work uncertified                                                        2,000                     6,000               –

Work certified                                                       4,00,000               10,00,000             12,00,000

The contract price was for Rs.12,00,000.          Cash received was 80% of the works certified.

1. A company produces a product which passes through three processes A, B and C. 1000 units are introduced at Rs.5 each in process 1. Other details are as follows:

A                     B                     C

Materials consumed (Rs.)                                                                2,000                     3,020                     3,462

Direct wages                                                                          3,000                     4,000                     5,000

Direct  expenses                                                                     500                         226                      –

Normal loss (%age on input)                                              10%                         5%                         10%

Sale value of normal loss per unit (Rs)                             3                              5                              6

Output in units                                                                         940                          870                         810

Production overheads amounted to Rs.6,000, which is to be allocated to each process in the ratio of direct labor.

Prepare Process Accounts, Normal Loss account, Abnormal Gain account and Abnormal Loss account.

Go To Main page

## Loyola College B.Com Corporate & Secretaryship Nov 2010 Cost Accounting Question Paper PDF Download

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – CORPORATE SEC.

FIFTH SEMESTER – NOVEMBER 2010

# BC 5501/CR 5501 – COST ACCOUNTING

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

Time : 9:00 – 12:00

SECTION – A

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

1. Define Cost Accounting.
2. a) The method of costing used in a refinery is —————.
3. b) Cost Accounting records both monetary and ————– units.
4. Prepare a chart showing the different elements of cost.
5. From the following calculate the cost of goods sold:  Cost of production `. 1,83,500;

Opening stock of finished goods `71,500; Closing stock of finished goods `.42,000.

1.   A publishing house purchases 10,000units of a particular item per year at a unit cost

of ` 40.  The ordering cost per order is Rs.100 and the inventory carrying cost is 25%

1. The worker completes a job in a certain number of hours. The standard time allowed

for the job is 8 hrs and the hourly rate of wages is` 10. The worker earns at the 50%

rate a bonus of ` 20 under Halsey plan. Ascertain his total wages under the Rowan

1.    What do you mean by a ‘Machine Hour Rate’?
2. What is Idle time
3. Mention the bases of apportionment of the following expenses of departments:
4. a) Plant depreciation b) Lighting  c) Power    d)  Consumable stores
5.   Record the following transaction in stores ledger, price the issues at weighted average

rate:  200 units received at` 2.00 per unit on 2nd September, 300 units received at

` 2.40 per unit during 15th September and 250 units issued on 20th September.

SECTION B             ANSWER ANY FIVE                                                                                     (5 x 8 =40)

1. “While Financial Accounting is external, Cost Accounting is internal to the business”-

Explain this statement by bringing out the difference between Cost and Financial

Accounting.

1. Discuss the Secondary distribution of Overheads with illustrations.
2. Write short notes on a) Retention money b) Escalation clause c) Work in progress d) Target

costing.

1. A) Compute the (i) re-order level ; (ii) minimum level ; (iii) maximum level ; and (5)

(iv) average stock level for components A and B based on the following data:

Components

A                                B

Maximum consumption per week (in units)                250                              200

Average consumption per week (in units)                   150                              100

Minimum consumption per week (in units)                 100                              50

Re-order period (in weeks)                                          6 to 10                         5 to 9

Re-order quantity (in units)                                         500                              700

1. B) Discuss the methods of pricing issue of materials.                                      (3)

1. From the following figures prepare a Reconciliation Statement:

`

Net loss as per costing records                                                            1,72,400

Works overhead under-recovered in costing                                           3,120

Depreciation charged in financial records                                             11,200

Depreciation recovered in costing                                                         12,500

Interest received not included in costing                                                 8,000

Obsolescence loss charged in financial records                                       5,700

Income-tax provided in financial books                                                40,300

Bank interest credited in financial books                                                   750

Stores adjustments (credit) in financial books                                            475

Value of opening stock in : Cost Accounts                                           52,600

Financial Accounts                                                54,000

Value of closing stock in : Cost Accounts                                             52,000

Financial Accounts                                                49,600

Interest charged in cost accounts but not in financial accounts              6,000

Preliminary expenses written off in financial accounts                              800

Provision for doubtful debts in financial accounts                                     150

1. Construction Ltd. Is engaged on two contracts A and B during the year.

The following particulars are obtained at the year end (Dec. 31) :

Contract A                             Contract B

Date of Commencement                         April 1                                 September 1

`.                                 `.

Contract price                                     6,00,000                                  5,00,000

Materials issued                                  1,60,000                                     60,000

Materials returned                                     4,000                                     2,000

Materials at site (Dec. 31)                       22,000                                     8,000

Direct Labour                                      1,50,000                                     42,000

Site Expenses                                         66,000                                     35,000

Establishment Expenses                         25,000                                       7,000

Plant installed at site                              80,000                                     70,000

Value of plant (Dec. 31)                        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 contractee           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 show : (a) Contract accounts, (b) Contractees’ accounts, and (c) Extract from Balance Sheet as on December 31, clearly showing the calculation of work- in-progress.

1. A) From the following details of stores receipts and issues of material in a manufacturing

unit, prepare the Stock ledger using LIFO method.                                                            (5)

April 1 Opening Stock 2000 units @ ` 5.00 each

3   Issued 1,500 units to production

4   Received 4,500 units @ ` 6.00 each

8   Issued 1,600 units to production

1. Returned to stores 100 units by production department (from the issue of April 3)

16   Received 2,400 units @ ` 6.50 each

19   Returned to supplier 200 units out of the quantity received on April 4th.

20   Received 1,000 units @ ` 7.00 each

24   Issued to production 2,100 units

27   Received 1,200 units @ ` 7.50 each

29   Issued to production 2,800 units

1. B) Discuss the relative merits and demerits of two of the main methods of remunerating

labour.                                                                                                                                         (3)

1. Jaidka owns fleet of taxi and the following information is available from the records

maintained by him :

Number of taxis                                                                                 10

Cost of each taxi                                                                     `20,000

Salary of manager                                                                   `600 p.m.

Salary of accountant                                                               ` 500 p.m.

Salary of cleaner                                                                     `. 200 p.m.

Salary of mechanic                                                                  `400 p.m.

Garage rent                                                                             ` 600 p.m.

Annual tax                                                                              `600 per taxi

Driver’s salary                                                                         `200 p.m. per taxi

Annual repair                                                                          `1,000 per taxi

Total life of a taxi is about 2,00,00 kms. A taxi runs in all 3,000 kms. in a month of which 30% it runs empty. Petrol consumption is 1 litre for 10 kms. @ `1.80 per litre. Oil and other sundries are ` 5.00 per 100 kms.

Calculate the cost of running a taxi per km.

SECTION-C

ANSWER ANY TWO                                                                                                         ( 2 x 20 = 40 marks)

1. Modern Manufacture Ltd., have three production departments P1, P2, P3 and two Service

Departments S1 and S2, the details pertaining to which are as under :

P1                     P2                     P3                     S1                     S2

Direct wages (`)                    3,000                 2,000              3,000                1,500               195

Working Hours                     3,070                 4,475              2,419                   –                       –

Value of Machines (`)     60,000                  80,000         1,00,000                5,000            5,000

H.P. of Machines                       60                      30                   50                     10                 –

Light points                                10                      15                   20                     10                   5

Floor Space (sq. ft.)               2,000                2,500              3,000                2,000               500

The following figure extracted from the accounting records are relevant :

Rent and Rates `5,000, General Lighting `600, Indirect Wages `1,939 ;     Power `1,500 ; Depreciation on Machines `10,000 and Sundries ` 9,695.

The expenses of the Services Departments are allocated as under :

P1                           P                     P­3                           1                           S2

S1                                           20%                 30%                 40%                 –                       10%

S2                                       40%                 20%                 30%                 10%                 –

Find out the total cost of product ‘X’ which is processed for manufacture in Department P1, P2 and P3 for 4,5 and 3 hours respectively, given that its Direct Material Cost is `50 and Direct Labour Cost ` 30.

20)       Product B passes through three processes before it is transferred to finished stock. The following information is obtained for the month of March :

Details                                                             Process                                   `Finished Stock

I                       II                     III

`                      `                     `                                `

Opening Stock                                      5,000               8,000             10,000                         20,000

Direct Material                        40,000             12,000             15,000                         –

Direct Wages                          35,000             40,000             35,000                         –

Production Overheads                        20,000             24,000             20,000                         –

Closing Stock                          10,000               4,000             15,000                         30,000

Profit % on Transfer price       25%                 20%                 10%                             –

(to next process)

Inter-process Profit for

Opening  Stock           –                         1,395               2,690                         6,534

Stock in process accounts are valued at Prime cost and finished stock has been valued at the price at which it is received from Process III. Sales during the period were Rs. 4,00,000.

Prepare and compute :

• Process cost accounts showing profit element at each stage ;
• Actual realized profit ; and
• Stock valuation for Balance Sheet purpose.

21)       Following information has been obtained from the records of a Manufacturing Company :

1-1-2001                                  31-12-2001

`                                    `

Stock of raw materials                                                  40,000                                      50,000

Stock of finished goods                                              100,000                                   1,50,000

Stock of work- in-progress                                           10,000                                      14,000

`

Indirect Labour                                               50,000

Lubricants                                                       10,000

Insurance on Plant                                            3,000

Purchase of Raw Materials                          4,00,000

Sales Commission                                           60,000

Salaries of Salesmen                                     100,000

Carriage Outward                                           20,000

Power                                                              30,000

Direct Labour                                                3,00,000

Depreciation on Machinery                             50,000

Factory Rent                                                   60,000

Property Tax on Factory Building                  11,000

Sales                                                            12,00,000

Prepare a Statement of Cost and Profit showing

• Cost of Production ;
• Cost of Goods Sold ;
• Cost of Sales ; And
• Profit

Go To Main Page

## Loyola College B.Com Corporate & Secretaryship April 2011 Cost Accounting Question Paper PDF Download

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – CORPORATE SEC.

FIFTH SEMESTER – APRIL 2011

# BC 5501 – COST ACCOUNTING

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

Time : 9:00 – 12:00

PART  A

Explain the following terms: Q.nos.1-4

1. Opportunity cost

1. Idle time

1. Overtime wage

1. Retention money

1. State whether the following statements are TRUE or FALSE:
2.        The cost of normal loss units are borne by the good units produced.
3. The cost unit for a goods transport service is cost per passenger kilometre.

1. Stock on 1st January 500 units at Rs.10 per unit.

Purchases on 1st January 14500 units at Rs.12 per unit.

On 31st January the stock was 2000 units.

Compute the value of the stock on that date, if materials are priced under ‘Weighted average’ method.

1. Annual requirement is 1600 units. Cost per unit Rs.40. Ordering cost per unit is Rs.50; carrying cost 10% of inventory value. Calculate Economic Order quantity.

1. Time allowed for a job is 48 hours. Time taken by worker X is 40 hours. Time rate is Rs.5 per hour. Calculate the earnings of X under Halsey plan and Rowen plan.

1. Estimated machine hours per year 2000; estimated factory overheads per year Rs.10000; job 77 requires Rs.500 direct material and Rs.300 direct wages. It takes 10 machine hours to complete the job. Compute the factory cost of job 77.

1. 500 units are introduced in process I, 300 units are completed and transferred to process II, 200 units 80% complete are in work-in-progress. If the total expenses of the process is Rs.23000, calculate the value of closing work-in-progress.

PART  B

Answer ANY FIVE questions                                                                                               5×8=40 marks

1. Discuss the advantages of Cost Accounting.

1. Define ‘labour turnover’. What are the causes for labour turnover? Explain any two methods for computing labour turnover.

1. A machine is purchased for cash at Rs.9,200. Its working life is estimated to be 18,000 hours after which its scrap value is estimated at Rs.200. it is assumed from past experience that:
2. The machine will work for 1,800 hours annually.
3. The repair charges will be Rs.1,080 during the whole period of life of the machine.
• The power consumption will be 5 units per hour at 6 paise per unit.
1. Other annual standing charges are estimated to be:
2. Rent of department (machine 1/5th) 780
3. Light (12 points in the dept – 2 points engaged in the machine) 288
4. Foreman’s salary (1/4th of his time is occupied in the machine) 6000
5. Insurance premium (fire) for machinery 36
6. Cotton waste 60

Find out the machine hour rate on the basis of above data for allocation of the works expenses to all jobs for which the machine is used.

1. A transport service company is running 4 buses between two towns which are 50 kms apart. Seating capacity of each bus is 40 passengers. The following particulars are obtained from the records for the month of April 2010:

Rs.

Wages of drivers, conductors and cleaners                                          24,000

Salaries of office and supervisory staff                                                10,000

Repairs and maintenance                                                                        8,000

Taxes, insurance, etc.                                                                            16,000

Depreciation                                                                                          26,000

Interest and other charges                                                                    20,000

The seating capacity utilised was 75%. All the four buses ran on all days of the months. Each bus had made one round trip daily. The bus consumes 1 litre diesel per 20 kms. The cost of diesel is Rs.10 per litre.

Calculate the fare per passenger-km, if the company wants a profit of 50% on cost.

1. Modern Constructions Ltd. has taken a contract on October 1, 2009. The position of the contract on September 30, 2010 is as follows:

Rs.

Contract price                                                    27,00,000

Materials                                                              5,80,000

Wages paid                                                           9,64,000

Other expenses                                                        24,000

Plant at site                                                          1,60,000

Unused materials at site                                          40,000

Wages payable                                                        36,000

Other expenses due                                                   4,000

Cash received being 75% of works certified     12,00,000

Work completed but not yet certified                    80,000

The plant at site is to be depreciated at 10%.

Material costing Rs.40000 was returned to stores.

Material costing Rs.10000 was stolen from the site.

Prepare the contracts accounts, showing the notional profit and also profit to be transferred to Profit and Loss account.

1. From the following information, prepare a cost sheet for the month of December 2010:

Rs.

Stock on hand – 1st December 2010:

Raw materials                                                 25,000

Finished goods                                                17,300

Stock on hand – 31st December 2010:

Raw materials                                                 26,200

Finished goods                                                15,700

Purchases of raw materials                               21,900

Carriage on purchases                                          1,100

Work-in-progress, 1/12/2010 at works cost         8,200

Work-in-progress, 31/12/2010 at works cost       9,100

Sale of finished goods                                       72,300

Direct wages                                                      17,200

Non-productive wages                                             800

Direct expenses                                                     1,200

1. Calculate the earnings of a worker under i) Halsey Plan  (ii) Rowan plan and (iii) Piece rate system from the following particulars:
2. Hourly rate of wages guaranteed Rs.6 per hour
3. Standard time for producing one dozen articles – 3 hours
4. Actual time taken by the worker to produce 20 dozen articles – 48 hours.

1. From the following data prepare a reconciliation statement:

Rs.

Profit as per cost account                                               1,45,500

Over valuation of opening stock in cost accounts             15,000

Over valuation of closing stock in cost accounts                 7,500

Interest earned during the year                                            3,750

Rent received during the year                                            27,000

Bad debts written off during the year                                 9,000

Preliminary expenses written off during the year              18,000

PART  C

Answer ANY TWO questions                                                                                   2×20=40 marks

1. The following information is provided by S.M.Ltd for the fortnight of April 2010:

Material exe:

Stock on 1.4.2010                                 100 units at Rs.5 per unit

Purchases :

5.4.2010                                                   300 units at Rs.6

8.4.2010                                                   500 units at Rs.7

12.4.2010                                                 600 units at Rs.8

Issues:

6.4.2010                                                   250 units

10.4.2010                                                 400 units

14.4.2010                                                 500 units

On 11/4/2010 100 units were returned to supplier and on 15/4/2010 stock verifier found a shortage of 20 units.

Using FIFO and LIFO methods of pricing issues, prepare the Stores Ledger.

1. 20,000 units were introduced in Process A, at a cost of Rs.40,000. After processing 18,500 units were transferred to Process B, which produced final output of 18,000 units. Other particulars are given below:

Process A            Process B

Material cost                                                                          Rs.40,000             Rs.  4,000

Labour cost                                                                             Rs.12,000             Rs.10,000

Normal loss % on input                                                      5                              4

Sales value of scrap units                                                  Re.1                       Rs.2

There was no opening or closing work-in-process.

Prepare Process accounts, Normal loss account, Abnormal loss account and Abnormal gain account.

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

Rs.

Rent and rates                                      25,000

Power                                                         7,500

General lighting                                      3,000

Depreciation on machinery             50,000

Indirect wages                                        7,500

Sundries                                                  50,000

Total           Dept.A         Dept.B       Dept.C      Dept.X     Dept.Y

Direct wages (Rs)                                   50000          15000         10000         15000        7500        2500

HP of machines used                                150                  60               30                50             10        –

Cost of machinery (Rs)                  1250000       300000       400000       500000      25000      25000

Production hours worked                  –                      6226           4028           4066        –               –

Floor space used (sq mt)                  10000             2000           2500           3000        2000          500

Lighting points (nos)                                   60                 10                15               20             10              5

Service department’s expenses allocation:

A                             B                             C                             X                             Y

X                                                 20%                        30%                        40%                        –                              10%

Y                                                  40%                        20%                        30%                        10%                        –

You are required to:

1. Compute the overhead rate of production departments using the repeated distribution method; and
2. Hence, determine the total cost of a product 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.

Go To Main Page

## Loyola College B.Com Corporate & Secretaryship April 2012 Cost Accounting Question Paper PDF Download

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – CORPORATE SEC.

FIFTH SEMESTER – APRIL 2012

# BC 5501 – COST ACCOUNTING

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

Time : 9:00 – 12:00

SECTION – A

• Define cost accounting.
• Prime cost includes direct material, direct——-and direct——–.
• Say true or false with reason

ABC analysis gives equal importance to all materials

• The time card of a worker reveals that in a normal week of 48 hours, he worked for 52 hours at the rate of Rs.15 per hour. Taking over time premium at 100% of the time rate calculate the gross wages
• Find out the amount of rent apportioned to each department.

Rent-Rs.8000

Space occupied by departments:

A-100 sq.feet

B-200 sq.feet

C-300 sq.feet

D-400 sq.feet

6)  Write a note on job costing and the industries which adopt job costing.

7)  What is work certified?

8)  Cost of tyres and tubes is a——-charge in operating costing.

9)  Pankajam travels employs 5 buses which run over a route of 140 kms(one way),

making one round trip a day. The buses run 360 day per year and 10% of them on

average are laid out for repairs. Ascertain the total running kilometers per year.

10) What are joint products?

SECTION – B

11) Discuss the objectives and functions of cost accounting.

12) Explain ABC method of inventory control.

13) What are the causes for labour turn over?

14) The following details have been extracted from the cost records of Rajasekhar Ltd.

 Particulars Rupees Stock of raw materials on 1st December 2010 75,000 Stock of raw materials on 31st December 2010 91,500 Direct wages 52,500 Indirect wages 2,750 Sales 2,11,000 Work-in-progress 1st December 2010 28,000 Work-in-progress 31st December 2010 35,000 Purchase of raw materials 66,000 Factory rent, rates and power 15,000 Depreciation of plant and machinery 3,500 Expenses on purchases 1,500 Carriage out wards 2,500 Advertising 3,500 Office rent and taxes 2,500 Traveling salesmen wages and commission 6,500 Stock of finished goods 1st December 2010 54,000 Stock of finished goods 31st December 2010 31,000

Prepare a cost sheet with maximum possible information.

15) From the following information calculate:

1. i) Economic order quantity
2. ii) Reorder level

iii) Maximum level

1. iv) minimum level

Normal usage 150 units per day. Minimum usage 100 units per day. Maximum usage 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 Rs.1. Carrying cost is 10% per annum.

16) From the following particulars, calculate earnings of a worker under:

1. i) Time rate system
2. ii) Piece wage rate

iii) Halsey plan

1. iv) Rowan plan

Wage rate-Rs.2 per hour

Production per hour-4 units

Dearness allowance-Rs.1 per hour

Standard time fixed-80 hours

Actual time taken-50 hours

Production-250 units

17) From the following information of Swetha Construction Company prepare the contract account for

1. Also show what part of the profit on the contract should be taken credit of in 2009. The contract

was for Rs.8, 00,000.

 Particulars Rupees Materials issued from stores 1,50,000 Wages paid 2,20,000 General charges 8,000 Plant installed at site on 1st july 2009 40,000 Materials on hand at close 8,000 Wages accrued due 8,000 Work certified 4,00,000 Work completed but not certified 12,000 Cash received 3,00,000 Materials transferred to other contracts 8,000 Depreciation on plant is to provided at 10% per annum 2,000

18) In manufacturing the main product A, a company processes the resulting waste material into two by-

products-B and C. During one period of production the following data was compiled

 Particulars A B C Sales 8,00,000 64,000 96,000 Cost before separation (Rs) 3,10,400 — — Cost after separation (Rs) 80,000 12,800 14,400 Estimated net profit percentage to sales value — 20% 30% Estimated selling expenses as percentage of sales value 20% 10% 15%

There is no beginning or ending inventories. Prepare an income statement concerning the period described using reversal cost method for by-products.

SECTION – C

19) The following information is available in respect of process I for the month of January 2011

Opening work in progress-5000units

Materials 100% complete-Rs.18,750

Labour 60% complete-Rs.7,500

Units introduced into the process-20,000

Closing work-in-progress-7,000 units

Materials 100% complete

Labour 50% complete

18,000 units are transferred to next process. The process costs for the month were as follows:

Prepare statement of equivalent production, statement of cost, statement of evaluation and process

account by following average cost method

20) Modern Manufacturers Ltd have three production departments A,B,C and two service departments S1

and S2, the details pertaining to which are as under

 Particulars A B C S1 S2 Direct wages (Rs) 30,000 20,000 30,000 15,000 5,000 Working hours 3,070 4,475 2,419 — — Value of machines(Rs) 6,00,000 8,00,000 10,00,000 50,000 50,000 H.P of machines 60 30 50 10 — Light points 100 150 200 100 50 Floor space (Sq.feet) 20,000 25,000 30,000 20,000 5,000

The following figures extracted from the accounting records are relevant.

Rent-Rs.15,000; General lighting-Rs.6,600;Indirect wages-20,000;Power-Rs.15,000;Depreciation on machines-Rs.1,00,000 and sundries-Rs.10,000

The expenses of service departments are allocated as under:

 Departments A B C S1 S2 S1 20% 30% 40% — 10% S2 40% 20% 30% 10% —

Find out the works cost of product X which is processed for manufacture in departments A,B,C for

4,5,3 hours respectively, given that its direct material is Rs.500 and direct labour cost is Rs.430.

21) A person owns a bus which runs from Delhi to Chandigargh and back for 10 days in a month. The

distance between Delhi and Chandigarh is 150 miles. The trip between these places is completed the

same day. The bus goes another 10 days to Agra which is 120 miles away from Delhi and completed

on the same day. For the rest of the 4 days in a month the bus makes local trips distance covered in

this being 40 miles. Calculate the rate the person should charge a passenger when he wants to earn a

profit of 33 1/3 % on his takings. The other information is given below:

 Cost of the bus Rs 60,000 Lubricant oil Rs 10 per 100 miles Depreciation 20% Repairs and maintanance Rs 500 pm Salary of Driver Rs 350 pm Permit fees Rs 284 pm Salary of Conductor Rs 350 pm Normal capacity of the bus 50 passengers Salary of accountant Rs 160 pm Token tax Rs 600 p.a Insurance Rs 1680 p.a Diesel Consumption 4 miles per litre costing Rs 1 per litre.

The bus is generally occupied 90% of the capacity when it goes to Chandigharh and 80% when it goes to Agra and is full in local trips. Passenger tax 20% of his net takings.

Go To Main page

## Loyola College B.Com Corporate & Secretaryship Nov 2012 Cost Accounting Question Paper PDF Download

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – CORPORATE SEC.

FIFTH SEMESTER – NOVEMBER 2012

# BC 5501 – COST ACCOUNTING

Date : 16/11/2012             Dept. No.                                        Max. : 100 Marks

Time : 9:00 – 12:00

PART – A

• Define cost centre.
• Works cost includes Prime cost and ——————. Works cost is also referred to as ———— ————.
• Say true or false with reason

VED analysis refers to Vital, Equivalent, Desirable.

• The time card of a worker reveals that in a normal week of 48 hours, he worked for 52 hours at the rate of Rs.15 per hour. Taking over time premium at 100% of the time rate calculate the gross wages.
• Apportion the cost of Power to the user departments:

Cost of power-Rs 10,000

Kilowatt hours (KWH) of power consumed.

Department A                         620 KWH

Department B                         380 KWH

Department C                         1000 KWH

6)  Write a note on job costing and the industries which adopt job costing.

7)  What is work uncertified?

8)  Garage rent is a——-charge in operating costing.

9)  Calculate the passenger kilometers covered by a fleet of  4 taxisrun by CNN

travels from Hyderabad To Bhuvanagiri (45 kms apart) and back 4 trips each day

with 5 passengers on an average on each vehicle for the month of April, 1992.

10) What are joint products?

PART – B

11) Discuss the necessity to prepare cost sheets and give the reasons which calls for a reconciliation

of cost and financial profits.

12) Explain the process and significance of ABC method of inventory control.

13) What are the causes for labour turnover and what are the methods used to measure labour

turnover?

14) From the following particulars, prepare a cost sheet showing the selling price per unit.

 Particulars Rs Raw material 9,100 Labour and other direct expenses Factory expenses 80% of the labour and other direct expenses. Office overheads 10% of works cost. Selling and distribution expenses Rs. 2 per unit sold. Units produced and sold – Rs. 10,000. Percentage of profit – 20% on selling price. 4,000

15) Calculate a) EOQ b) maximum level c) minimum level d) reordering level from the following data:

Reorder period- 4 to 6 weeks

Maximum consumption- 100 units per week

Minimum consumption- 50 units per week

Normal consumption- 75 units per week

Annual consumption- 36000 units

Cost per unit- Re.1

Ordering cost- Rs.25

Inventory carrying cost is 20% of unit value

16) From the following particulars, workout the total amount payable to three workmen and the rate

earned per hour by them under:

• Halsey and

Standard time allowed : 12 hours

Actual time taken by    : A = 8 hours

: B = 6 hours

: C = 4 hours

17) From the following information of Swetha Construction Company prepare the contract account for 2009. Also show what part of the profit on the contract should be taken credit of in 2009. The contract was for Rs.8, 00,000.

 Particulars Rupees Materials issued from stores 1,50,000 Wages paid 2,20,000 General charges 8,000 Plant installed at site on 1st july 2009 40,000 Materials on hand at close 8,000 Wages accrued due 8,000 Work certified 4,00,000 Work completed but not certified 12,000 Cash received 3,00,000 Materials transferred to other contracts 8,000 Depreciation on plant is to provided at 10% per annum 2,000

18) In manufacturing the main product A, a company processes the resulting waste material into two by-

products-B and C. During one period of production the following data was compiled

 Particulars A B C Sales 8,00,000 64,000 96,000 Cost before separation (Rs) 3,10,400 — — Cost after separation (Rs) 80,000 12,800 14,400 Estimated net profit percentage to sales value — 20% 30% Estimated selling expenses as percentage of sales value 20% 10% 15%

There is no beginning or ending inventories. Prepare an income statement concerning the period described

using reversal cost method for by-products.

PART – C

19) The product of a company passes through 3 distinct processes to completion. They are known as A,

B, C. From past experience it is ascertained that loss is incurred in each process as follows:

Process-A-2%, Process-B-5%, Process-C-10%

In each case the % of loss is computed on the number of units entering the process concerned. The

loss each process possesses a scrap value. The loss of process A and B is sold at Rs 5 per 100 units

and that of Process C at Rs 20 per 100 units.

 Particulars Process A(Rs) Process B(Rs) ProcessC(Rs) Materials consumed 6000 4000 2000 Direct Labour 8000 6000 3000 Manufacturing Expenses 1000 1000 1500

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 units,Process-B-18,800 units, process-C-16,000 units. There is no work-in-progress

in any process.

Prepare process accounts. Calculate to the nearest rupee.

20) Tamilnadu Co.,ltd. Is a manufacturing company having three production departments A,B and C and

two service departments X and Y. The following is the budget for December,1985.

 Particulars Total A B C X Y Rs. Rs. Rs. Rs. Rs. Rs. Direct material _ 1,000 2,000 4,000 2,000 1,000 Direct wages _ 5,000 2,000 8,000 1,000 2,000 Factory rent 4,000 _ _ _ _ _ Power 2,500 _ _ _ _ _ Depreciation 1,000 _ _ – _ _ other overheads 9,000 _ _ – _ – Additional Information Area(sq.ft) _ 500 250 500 250 500 Capital value of assets _ 20 40 20 10 10 Machine hours _ 1,000 2,000 4,000 1,000 1,000 H.P of machines _ 50 40 20 15 25

A technical assessment for the apportionment of expenses of service departments is as under:

 A B C X y X 45% 15% 30% _ 10% Y 60% 35% _ 5% _

You are required to prepare:

1. a) Statement showing distribution of overheads to various departments.
2. b) Statement showing distribution of service departments expenses to production departments

21) A person owns a bus which runs from Delhi to Chandigargh and back for 10 days in a month. The

distance between Delhi and Chandigarh is 150 miles. The trip between these places is completed the

same day. The bus goes another 10 days to Agra which is 120 miles away from Delhi and completed

on the same day. For the rest of the 4 days in a month the bus makes local trips distance covered in

this being 40 miles. Calculate the rate the person should charge a passenger when he wants to earn a

profit of 33 1/3 % on his takings. The other information is given below:

 Cost of the bus Rs 60,000 Lubricant oil Rs 10 per 100 miles Depreciation 20% Repairs and maintenance Rs 500 pm Salary of Driver Rs 350 pm Permit fees Rs 284 pm Salary of Conductor Rs 350 pm Normal capacity of the bus 50 passengers Salary of accountant Rs 160 pm Token tax Rs 600 p.a Insurance Rs 1680 p.a Diesel Consumption 4 miles per litre costing Rs 1 per litre.

The bus is generally occupied 90% of the capacity when it goes to Chandigharh and 80% when it goes to

Agra and is full in local trips. Passenger tax 20% of his net takings.

Go To Main page

## Loyola College B.Com Nov 2004 Cost Accounting Question Paper PDF Download

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI –600 034

B.com., DEGREE EXAMINATION – COMMERCE

# 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)

1. What is labour Turnover? What are its causes and Explain the effects of labour Turnover.
2. What is ABC Analysis? Describe its advantages.
3. “Cost Accounting is an unnecessary Luxury for business establishments”. Do you agree with the statement.
4. 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?

1. 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.
2. Output of the Group 16000 units
3. Price rate per 100 units Rs.2.50
4. No of hours worked by P-90; Q-70;      R-80;   S-100
5. 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.

1. 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.

1. 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

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

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.

1. 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)

1. From the following particulars extracted from the books of r ltd for the month of June 1998, prepare the following,
2. Statement of Equivalent Production
3. Statement of cost
4. Process Account
• Opening stock as on 1st June 200 units @ Rs.4.00 per unit.

Degree of completion Materials 100%

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

Degree of completion Materials 100%

• Other relevant information.

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

1. 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?

1. 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

Preliminary expenses written off                        400

legal charges                                                        100

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.

Go To Main page

## Loyola College B.Com April 2007 Cost Accounting Question Paper PDF Download

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com.

 TH 12

DEGREE EXAMINATION –COMMERCE

FIFTH SEMESTER – APRIL 2007

CO 5501COST 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

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.

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 31st 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 31st March, 2003                                   12,220

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

Accrued Direct expenses                                                              1,330

Value of plant as revealed on 31st 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 31st 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

Selling and distribution overheads                             2, 40,000

Preliminary expenses written off                                    40,000

Legal charges                                                                  20,000

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

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.

Go To Main page

## Loyola College B.Com Nov 2008 Cost Accounting Question Paper PDF Download

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)

1. What is cost accounting?
2. What is a cost sheet?
3. Write a note on ‘ABC’ analysis.
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.

1. 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)

1. What is material control? What are its advantages?
2. Distinguish between allocation and apportionment of overheads?
3. 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 9th  August 2005.

August 27 Issued to production 10 units.

1. 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

1. 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.

1. 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.

1. 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

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.

1. 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)

1. 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

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.

1. 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

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.

1. 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 1st October 2005. The following details are

shown in their books for the year ended 30th 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.

Go To Main page

## Loyola College B.Com April 2009 Cost Accounting Question Paper PDF Download

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.
1. 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)

1. Explain the scope and objectives of Cost Accounting?

1. The accounts of a machine manufacturing company disclose the following information of six months ending 31st 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.

1. 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.

1. purchased 500 units at Rs.4 per unit.
2. 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 31st march and state its value under ‘weighted average cost’ method.

1. 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.

1. 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.

1. 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.

1. 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.

1. 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)

1. 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

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.

1. 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.

1. 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.

Go To Main Page

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

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – COMMERCE

FIFTH SEMESTER – NOVEMBER 2010

# CO 5501 – COST ACCOUNTING

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

Time : 9:00 – 12:00

PART – A

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

Explain the following terms: Questions 1 – 4.

1. `By products’ and `Joint products’
2. Cost unit and Unit cost
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

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

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

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

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

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

Rate of consumption – 10 to 20 units per day

Lead time – 6 to 10 days

Reorder quantity – 200 units

1. From the following data, prepare Process 1 account

Materials introduced 4700 units at Rs.28,200

Labour Rs.14,910

Normal loss 10% of input

Scarp realized Rs.5 per unit

Output 4,300 units.

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

No of workers at the beginning of the month – 500

No of workers at the end of the month – 600

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

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

Annual usage of a component – 6000 units

Set up cost per batch – Rs.20

Cost of production per unit – Rs.100

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

PART  B

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

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

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

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

Direct material Rs.5,00,000

Direct wages Rs.2,50,000

Factory expenses were Rs.1,50,000

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

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

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

Weekly working hours – 48

Hourly wage rate – Rs.7.50

Piece rate – Rs.3 per piece

Normal time taken per piece – 20 minutes

Normal output per week – 120 pieces

Actual output for the week – 150 pieces

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

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

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

Receipts during the month:

3rd                    300 units at Rs.15 per unit

7th                   900 units at Rs.16 per unit

23rd                  400 units at Rs.18 per unit

Issues during the month:

5th        500 units

8th        800 units

27th      500 units

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

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

Direct material Rs.6,060

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

Dept B 60 hours at Rs.3 per hour

Dept C 20 hours at Rs.5 per hour

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

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

Dept C Rs.2,000 for 500 hours

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

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

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

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

Rs.

Materials                                                        2,20,000

Wages paid                                                     2,00,000

Wages accrued                                                10,000

Other expenses                                                20,000

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

Prepare the contract account.

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

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

the following data, calculate the cost per km.

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

Driver’s salary                 –           Rs.2500 p m

Cleaner’s salary               –           Rs.1500 p m

Garage rent                     –           Rs.1000 p m

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

Road tax                          –           Rs.1200 p a

Repairs                            –           Rs.1800 p m

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

PART – C

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

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

Material Rs.90,000

Power Rs.12,000

Cost of rectifying defective work Rs.3,000

Direct wages Rs.60,000

Factory indirect wages Rs.20,500

Clerical salaries Rs.39,000

Selling expenses Rs.19,500

Plant repairs Rs.11,500

Sale proceeds of factory scrap Rs.2,000

The net selling price was Rs.31.60 per unit

Prepare a cost sheet and ascertain profit made in 2009.

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

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

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

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

2500 units were scrapped when they were completely processed.

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

Material 75%;  Labour and overheads 40%.

Scrap was sold at Rs.11 per unit.

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

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

The overhead expenses incurred for the year are as follows:

Depreciation – Rs.95000

Rent         – Rs.18000

Power – Rs.10000

Canteen expenses – Rs.5400

Sundry expenses – Rs.4500

The following further information are given regarding the departments:

A                      B                      C                      D

Direct material (Rs.)                   6000                5000                3000                2000

Direct labour (Rs.)                       20000              10000              10000              5000

Floor space (sq mt)                      5000                4000                1000                2000

Value of machinery (in lakhs)     10                    5                      3                      1

Horse power of machines           1000                500                  400                  100

No of workers                              100                  50                    50                    25

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

A is Rs.8000.

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

B are 5000.

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

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

B is 10.

Go To Main page

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

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – COMMERCE

FIFTH SEMESTER – APRIL 2011

# CO 5501 – COST ACCOUNTING

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

Time : 9:00 – 12:00

PART  A

Explain the following

1. ABC stock analysis

1. Normal and Abnormal loss

1. Taylor’s differential piece rate system

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

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

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

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

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

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

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

PART  B

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

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

(Rs.)

Materials used                                                             80,000

Direct wages                                                               72,000

Direct labour hours worked                                        20,000

Hours of machine operation                                        25,000

Overhead charges allocated to the department                      90,000

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

(Rs.)

Material used                          8,000               Labour hours booked              3,300

Direct wages                           6,250               Machine hours booked                        2,400

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

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

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

Items                                                               Vehicle A

Kilometers run (annual)                                                    15,000

Cost of vehicles                                                          Rs.25,000

Insurance (annual)                                           Rs.      700

Garage rent (annual)                                       Rs.      600

Supervision and salaries          (annual)                      Rs.   1,200

Driver’s wage per hour                                               Rs.          3

Cost of fuel per gallon                                                Rs.          3

Kilometers run per gallon (kms)                                                20

Repairs and maintenance per km (Rs.)                                  1.65

Tyre allocation per km (Rs)                                        0.80

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

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

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

Raw materials consumed                                Rs.20,000

Direct wages                                                   Rs.12,000

Machine-hour worked                                     9,500 hours

Machine-hour rate                                           Rs.2

Office overheads                                            20% of works cost

Units produced                                                           20,000

Units sold                                                        18,000 @ Rs.5 per unit

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

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

Date

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

10.11.2010      Received 500 units at Rs.7 per unit                            –

15.11.2010      Issued 1200 units

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

30.11.2010      Issued 1,100 units

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

Prepare the Stores Ledger under,  Weighted Average method.

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

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

1. The following data relate to process 1.

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

Input of materials 9100 units at Rs.27300.

Direct wages Rs.8200

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

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

 Materials Wages Direct expenses Gross profit         Administration expenses Income tax Net Profit (Rs)   4,80,000   3,60,000   2,40,000   1,20,000     12,00,000        60,000      10,000      58,000   1,28,000 Sales Closing stock Work in progress:      Materials                  30,000      Wages                       18,000      Direct expenses       12,000     Gross Profit Interest received (Rs)   9,60,000   1,80,000                60,000  12,00,000      1,20,000          8,000      1,28,000

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

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

Process I          Process II        Process III       Total

Rs.                   Rs.                   Rs.                   Rs.

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

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

Production overheads                        –                       –                       –                       7,330

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

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

Output             Normal loss as a          Value of scrap

(units)              %age of input              (per unit)

Process  I                   450                  10%                             Rs.2

Process II                   340                  20%                             Rs.4

Process III                 270                  25%                             Rs.5

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

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

(Rs.)

Materials sent to site                                                                85,349

Labour engaged on site                                                           74,375

Plant installed at site at cost                                                    15,000

Direct expenditure                                                                     3,167

Establishment charges                                                                           4,126

Materials returned to store                                                           549

Work certified                                                                                    1,95,000

Cost of work not certified                                                         4,500

Materials at site on 31.12.2010                                                             1,883

Wages accrued on 31.12.2010                                                              2,400

Direct expenditure accrued on 31.12.2010                                  240

Value of plant on 31.12.2010                                                              11,000

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

Go To Main page

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

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

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.

1. Calculate the re-order quantity from the following particulars:

Annual usage                                …30,000 units

Cost per Unit                                …Rs.100

Cost of carrying inventory            …10% of cost

1. 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.

1. What is machine hour rate?
2. 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.

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

PART – B

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

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

Profit for the year ended 31st 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
1. 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
1. Distinguish between Taylor’s Differential Rate and Emerson Efficiency Plan.

1. 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 10th 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 1/6th of his time for the machine. Calculate the

machine hour rate for the machine.

1. From the following data prepare a reconciliation statement.      Rs.

Profit as per cost accounts                                                                        1,50,000

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

1. 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.

1. 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
1. Write short notes on:
2. a)    Perpetual Inventory system.
3. b) ABC analysis.

PART – C

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

1. 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 –

1. 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.

1. 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.

Go To Main page

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

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

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.

1. 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

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

Delivery time                     2 to 4 weeks

Consumption                     100 to 150 units per week

1. 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.

1. 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.

1. 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)

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

1. 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.

1. 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:
2. Time-rate
3. Piece work with a guaranteed weekly wage
5. Halsey premium bonus, 50% to workman.

1. 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

6th                           Issued 250 units

13th                         Received 200 units at Rs.1.90 per unit

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

20th                         Issued 180 units

22nd                        Received 240 units at Rs.1.80 per unit

29th                         Issued 300 units

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

1. 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 1/5th 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, 2/3rd 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.

1. 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.

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

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)

1. 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.

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.

1. From the following data, calculate:
2. Equivalent production
3. 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%

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

1. 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

 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.

Go To Main page

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

# OA 10

FIFTH SEMESTER – November 2008

# BU 5504 – COST ACCOUNTING

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

Time : 9:00 – 12:00

SECTION –A                                                (10X2=20 MARKS)

1. What is cost sheet?
2. What do you mean by Defectives?
3. Define inventory control?
4. How do you classify overheads?
5. What is process costing?
6. Calculate the total earnings of a worker under Halsey plan

Standard time        – 30 hours

Time taken             – 20 hours

Hourly rate of wages is Re 1 per hour plus D.A @ 50 paise per hour worked.

1. Find out the economic order of quantity with the help of following details :-

Monthly usage                                                       : 500 units

Cost of materials per unit                                         : Rs 20

Cost of placing and receiving one order                  : Rs 60

Annual carrying cost                                          : Rs 2 per unit

1. Compute the depreciation chargeable to each department:

Depreciation Rs 27500

Machinery value in the departments:

X- Rs 200,000,      Y- Rs 400,000,            Z- Rs 500,000.

1. Calculate profits as per financial accounts

Profit as per cost accounts                                    Rs. 60,000

Overheads recovered in costing                            Rs. 3,500

Under absorption of expenses in costing              Rs. 6,000

Income tax debited in financial                            Rs. 4000

1. Calculate the materials purchased during the year

Rs

Direct wages                                                         60,000

Prime cost                                                             110.000

Opening stock of raw materials                             20,000

Closing stock of raw materials                               25,000

Expenses on purchase                                            15,000

SECTION- B                                     (5×8=40 marks)

1. What are the effects of labour turn over?
2. What are the limitations of cost accounting?
3. Explain ABC analysis? What are its advantages?

1. From the following, prepare stores ledger under FIFO method:

JAN 1 opening balance at Rs 5 each

2 received 500 units of Rs 4each

10 issued 300 units

15 issued 200 units

26 received 500 units of Rs 5.50 each

27 issued 300 units

31 issued 250 units

1. From the following information, calculate kilometers and total passenger kilometers:

No . Of buses                                : 4

Days operated in a month             : 30

Round trips made by each bus      : 4

Distance of route                          :30 km long (one way)

Capacity of bus                             : 60 passengers

Normal passengers traveling         : 80% of the capacity

1. Calculate re-ordering level, minimum stock level , maximum stock level and average stock level:

Maximum consumption                – 150 units per day

Minimum consumption                 – 100 units per day

Normal consumption                     – 120 units per day

Re-order period                             – 10-15 days

Re- order quantity                         – 1500 units

Normal re- order period                – 12 days

1. Work out the normal and over time wages payable to a worker from the following:

Days                            Hours worked

Monday                                   8

Tuesday                                   10

Wednesday                              9

Thurs day                                11

Friday                                    9

Saturday                                  4

Normal working hours                        – 8 hours per day

Normal rate                                         – Rs 2 per hour

Over time rate                                     – double the usual rate

1. Compute the machine hour rate from the following :

Cost of machine                                        : Rs 10,000

Scrap value after 10 years                         : Rs 2,000

Rent for a quarter for the department       : RS 300

General lighting                                        : Rs 240 p.a

Department supervisor’s salary                 : Rs 600 per quarter

Insurance premium for machine                : R s 60 p.a

Repairs                                                      : Rs 100 p.a

Power 2 units per hour at Rs 5 per 100 units

Estimated working hours p.a 2000

Machine occupies 1/4th of the total area in the department .The supervisor devotes 1/6th time for this machine.

SECTION- C                                                 (2X20= 40 MARKS)

1. From the following, prepare a cost sheet.

Materials                           – Rs 80,000

Direct wages                     – Rs 48,000

Machine hours worked     – 8,000

Machine hour rate             – Rs 4

Office overheads              – 10% on work cost

Selling overheads              – Rs 1.50 per unit

Units produced                 – 4000

Units sold                          – 3,600 units @ Rs 50 each

1. A product passes through 3 stages from the following prepare process accounts and abnormal gains and abnormal loss a/c
 Particulars Process I (Rs) II (Rs) III (Rs) Raw material 2600 1980 2962 Direct wages 2000 3000 4000 Selling price of scrap (Per Unit) 2 4 5 Normal loss 5% 10% 15% production 950units 840 units 750 units

General expenses Rs 9,000 which absorbed on the basis of wages . 1000 units at Rs 3 each introduced into process I.

1. A company’s informations related to a contract are given below. Prepare a contract account and also show how entries appear in balance sheet of the company:

Particulars                                                              Rs

Materials sent to site                                             85,349

Labour engaged on site                                         74,375

Plant installed at site                                             15,000

Direct expenditure                                                            3,167

Establishment charges                                           4,126

Materials returned to stores                                  549

Work certified                                                       195,000

Cost of work not certified                                     4,500

Material in hand at the end of year                       1,883

Wages accrued for the year                                  2,400

Direct expenses accrued                                       240

Value of plant at the end of the year                    11,000

Contract price agreed                                            250,000

Go To Main page

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

FIFTH SEMESTER – NOVEMBER 2010

# BU 5504/BU 5501 – COST ACCOUNTING

Date : 03-11-10                     Dept. No.                                        Max. : 100 Marks

Time : 9:00 – 12:00

PART –  A

Explain the following:

1. Equivalent units
2. Opportunity cost
3. Abnormal loss and Abnormal gain
4. Work certified and Retention money
5. State the basis for apportioning the following expenses to different departments:
6. Power
7. Canteen expenses
8. C) Stock insurance
9. d) Crèche expenses
10. The works cost of a product is Rs.8000. factory overheads are Rs.1000, which is 50% of wages. Calculate the value of direct material used.
11. Standard time 10 hours, time taken 6 hours, time rate Rs.5 per hour. Calculate the earnings of a worker under Halsey and Rowan plan.
12. Calculate economic order quantity and the number of orders to be placed in a year from the following data:

Annual consumption 10000 kg; ordering cost per order Rs.50; cost per kg Rs.2; storage expenses 8% per annum on inventory.

1. From the following data compute the cost per unit assuming a batch of 1000 units are produced:

Material – Re 1 per unit. Each unit takes 10 minutes to produce.

Machine operator is paid Rs.12 per hour. The machine hour rate is Rs.1.50.

The setting up time for the machine is 1 hour.

1. Profit as per financial accounts Rs.2000.

Works overheads under  recovered in cost – Rs.12000

Transfer fees in financial accounts – Rs.1000

Calculate the profit as per Cost Accounts.

PART –  B

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

1. What are the benefits obtained by installing a Costing system? What are the practical difficulties in installing the system?

1. What is labour turnover? What are its causes and costs?

1. X Ltd undertook a contract for Rs.6,50,000 on 1st April 2009. The following details relate to the contract for the year ending 31st December 2009.

Materials issued Rs.1,80,000

Wages paid Rs.87,000

Other expenses Rs.38,750

Plant issued to contract Rs.32,000

Total establishment expenses amounted to Rs.40000, out of which 25% is chargeable to the contract. Out of the materials issued, materials costing Rs.4,000 were sold for Rs.5,000. Plant costing Rs.2,000 was damaged on 1st October 2009 and was sold as scrap for Rs.300. Plant is to be depreciated at 10% per annum.

Material at site on 31st December 2009 was Rs.17,500.

Cash received from contractee Rs.3,06,000 which is 90% of work certified.

Work uncertified on 31st December 2009 Rs.30,000.

Prepare the contract account.

1. A transport company runs a bus between two towns which are 100 kms apart. The seating capacity of the bus is 40 passengers. It carries full capacity on the upward journey but only 75% of the capacity on the return journey. Bus runs for 30 days in a month and makes one round trip every day. The following details relate to the month of April 2010:

Wages of driver and conductor                        Rs.9,000

Diesel and oil                                                           Rs.18,000

Repairs and maintenance                                   Rs. 8,000

Garage rent                                                              Rs.2,000

Taxes and insurance                                             Rs.24,000 per annum

The bus costs Rs.4,00,000 and has a life of 10 years with an estimated scrap value of Rs.40,000.

Calculate the cost per passenger km.  Also calculate the fare per passenger kilometer, if the company wants a profit of 50% on the fare.

1. A factory is engaged in the production of a chemical X and in the course of its manufacture, a by-product Y is produced, which after a separate process has a commercial value. For the month of January 2009, the following are the summarized cost data:

Joint expenses                 Separate expenses

X                             Y

Rs.                          Rs.                          Rs.

Materials                                                                                     29,200                   8,360                     1,780

Labour                                                                                          14,700                   5,680                     2,042

The output for the month was 150 tonnes of X and 50 tonnes of Y and the selling price of X was Rs.500 per tone and that of Y Rs.290 per tone.

Assuming that the profit of Y is estimated at 25% of the selling price, prepare a statement showing the profit made on Product X.

1. The following details relate to the year 2004:

Material Rs.100000

Labor Rs.50000

Direct expenses Rs.20000

Sales Rs.278850

During the year 2005 the company received a work order which requires, Material Rs.8000, Labor Rs.4000 and Direct expenses Rs.1500. What price should the company quote for this order, if it wants the same rate of profit on selling price as was realized in the year 2004? Assume factory overheads are recovered as a percentage of direct labor and administration and    selling overheads as a percentage of works cost.

1. From the following information, calculate a composite machine rate, for a machine whose scrap value is Rs.20,000.
2. Cost of machine 3,80,000
3. Installation charges                 40,000
4. Working life                                 10 years
5. Working hours                                 8000 per year
6. Repair charges                 40% of depreciation
7. Power                 10 units per hour at 40 paisa per unit.
8. Lubricating oil                 4 per day of 8 hours
9. Consumable stores                 10 per day of 8 hours
10. Machine operator’s wages                 20 per day

1. In a factory, there are two Production depts., A and B, and two Service depts., X and Y. the overhead expense of these four depts. are as follows:

A – Rs.6,780; B – Rs.6,020; X – Rs.1,200 and Y Rs.1,000

The expenses of the Service Dept are to be divided between the other departments on the following percentage basis:

Dept. X                       Dept A 50%                         Dept B 30%                         Dept Y 20%

Dept. Y                       Dept A 50%                         Dept B 50%                         –

1. Prepare a statement showing the distribution of the Service dept expenses to the Production dept.
2. Dept A absorbs overheads at a rate per labor hour and Dept B at the rate per machine hour. The estimated labor hours and machine hours in the respective depts. are 2000 hours and 1000 hours respectively.

Calculate the overhead recovery rates for the two departments.

1. Calculate the price to be quoted for a job that requires Rs.500 in material, Rs.200 in wages and uses 6 Labor hours in Dept A and 4 machine hours in Dept B.

The company wants a profit of 50% on selling price.

PART  – C

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

1. The following details are supplied by an oil distributing company for the month of October 2009.

Stock on 1st October 2009 – 2000 litres at Rs.5 per litre

Receipts for the month:

7th                 1000 litres at Rs.6 per lt.

15th               2000 litres at Rs.6.50 per lt

Issues during the month:

10th               2500 litres

31st               2200 litres

On 31st October 2009 a shortage of 100 litres was noticed.

Prepare Stores Ledger under:

1. FIFO method
2. Weighted Average method.

1. From the following data calculate: (a) Equivalent production, (b) Cost per unit of equivalent production; and

(c) Statement of apportionment of cost , (d) Prepare the Process A account.

No. of units introduced in the process A                                      4,000 units

No. of units completed and transferred in Process B             3,200 units.

No. of units in process at the end of the period                          620 units.

Stage of completion:

Material                                     80%

Labour                                        70%

Normal process loss at the end of the process                          200 units

Value of scrap                                                                                         Re.1 per unit

Value of raw materials                                                                         Rs.11,228

Wages                                                                                                        Rs.7,228

1. The following figures relate to R Ltd. for the year ending 31st  March 2007:

Financial A/cs (Rs.)                          Cost A/cs (Rs.)

Opening Stock:

Raw material                                                            8000                                                       5000

Work in progress                                                    7000                                                       8500

Finished stock                                                         5000                                                       4500

Closing Stock:

Raw material                                                            3000                                                       4500

Work in progress                                                    3000                                                       4700

Finished stock                                                         6900                                                       6200

Purchases                                                                 40000                                                    40000

Direct wages                                                            20000                                                    20000

Loss on sale of assets                                           1000                                                       –

Interest and dividend received                        1600                                                       –

Sales during the year was Rs.1,20,000.

Calculate the profit in Financial A/cs and Cost A/cs and prepare a statement reconciling the two profits.

Go To Main Page

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

FIFTH SEMESTER – APRIL 2011

# BU 5504 – COST ACCOUNTING

Date : 19-04-2011              Dept. No.                                          Max. : 100 Marks

Time : 1:00 – 4:00

PART  A

Explain the following:

1. Rowan plan
3. Equivalent units
4. Economic batch quantity
5. Fill in the blanks:
6. By products are always of lower value and importance than the ———–product.
7. Rent of building is apportioned on the basis of ————-.
8. Minimum consumption 150 units per week; maximum consumption 350 units per week; reorder period 2-4 weeks; reorder quantity 1000 units. Calculate maximum level and minimum level.
9. Profit as per financial accounts Rs.4000;

Factory overheads under-absorbed in cost accounts Rs.8000;

Closing stock over-valued in financial accounts Rs.3000.

Calculate profit as per Cost accounts

1. Standard time per unit 12 minutes; standard rate per hour Rs.60; differential to be used 80% and 120%. In a day of 8 hours A produced 50 units. Calculate his earnings under Taylors differential piece rate system.
2. Annual demand for a component is 6000 units. Setting up cost per batch Rs. 20; annual rate of interest 6%; cost of manufacture per unit Rs.100. Calculate Economic Batch quantity.
3. Calculate the amount of profit to be taken to P and L account.

Notional profit Rs.60000; cash received Rs.6,40,000 being 80% of works certified; contract price Rs.16,00,000. Calculate the profit to be credited to P and L account

PART  B

1. a) Distinguish between Bin Card and Stores Ledger.
2. Write a note on ABC stock control.

1. Differentiate between financial accounting and cost accounting.

1. The following annual charges are incurred in respect of a machine in a shop where work is done by means of 5 similar machines.

Rent for the shop Rs.4800

Depreciation on each machine Rs.500

Repairs for 5 machines Rs.1000

Lighting charges for the shop Rs.540.

Sundry supplies for the shop Rs.450

There are two attendants for the 5 machines and they are each paid Rs.60 per month. There is one supervisor for the 5 machines who is paid Rs.250 per month.

Machine uses 10 units of power per hour at 50p per unit.

Calculate the machine hour rate, assuming each machine works for 1200 hours per annum.

1. Fast Roadways run 10 buses between two suburban centres which are 25 kilometres apart. Seating capacity of each bus is 30 passengers. The expenses for the month of March 2010 were as under:

(Rs)

Salaries of drivers and conductors                        60,000

Salaries of mechanical staff                                  36,000

Taxes, insurance, etc.                                            20,200

Repairs and maintenance                                      28,000

Diesel and oil cost Rs.8 per litre. The vehicle runs 16 kms per litre. The cost of the vehicle is Rs.6,20,000. It has a life of 5 years and a salvage value of Rs.20,000 at the end of its life. Seating capacity utilised was 60%. All the buses ran 25 days a month. Each bus made four round-trips daily.

Find out the cost per passenger kilometre and the cost per round trip per passenger.

1. The following are the particulars relating to a contract which has begun on 1st January 2010:

(Rs)

Contract price                                          5,00,000

Machinery                                                     30,000

Materials                                                   1,70,000

Wages                                                       1,48,750

Direct expenses                                              6,330

Outstanding wages                                        5,380

Uncertified  work                                          9,000

Materials returned                                          1,600

Materials on hand 31st December 2010         3,700

Machinery on hand 31st December 2010     22,000

Value of work certified                            3,90,000

Prepare the Contract Account for the year 2010 showing the amount of profit that may be taken to the credit of Profit and Loss A/c of the year. Also show the amount of the work-in-progress as it would appear in the balance sheet of the year.

1. Compute the reorder level, minimum level, maximum level and average stock level for the component A based on the following data:

Maximum consumption per week                        150 units

Average consumption per week                           100 units

Minimum consumption per week             50 units

Reorder period                                                     8 to 12 weeks

Annual consumption                                            4000 units

Ordering cost per order                                         Rs.5

Cost per unit                                                         Rs.2

Storage and carrying cost                                     8% of annual inventory

1. A factory is engaged in the production of a Chemical X and in the course of its manufacture a by-product Y is produced, which after a separate process has a commercial value. For the month of January, the following are the summarised costing data:

Joint expenses                         Separate expenses

(Rs)                                  X (Rs)                    Y (Rs)

Materials                                       19,200                             7,360                                      780

Labour                                           11,700                             7,680                                   2,642

On cost                                            3,450                             1,500                                       544

The output for the month was 150 tons of X and 49 tons of Y and the selling price of Y averaged Rs.280 per ton.

Assuming that the profit on Y is estimated at 50% of the selling price, calculate the profit on X if its selling price is Rs.400 per tonne.

1. Net profits of Mayur Industries for the year ended 31.12.2010 as per Cost Account was Rs.1,60,000. However, financial records showed a different net profit. Scrutiny  of the books of accounts revealed the following information:

Rs.

Interest on investments                                                                                         10,000

Income tax provided                                                                                             48,000

Loss due to obsolescence                                                                                      6,800

Bank interest and transfer fees in financial accounts only as expenditure             1,250

Depreciation charged in financial accounts                                                          18,650

Depreciation charged in cost accounts                                                                 21,250

Works overhead under recovered in cost accounts                                                3,540

Closing stock under-valued in financial accounts                                                  1,410

Prepare a reconciliation statement and show the amount of net profit as per financial accounts.

PART  C

1. Usha Engineering Works Ltd., manufactured and sold 1,000 sewing machines in 2010. Following are the particulars obtained from the records of the company:

Rs.

Cost of materials                                          80,000

Wages paid                                               1,20,000

Manufacturing expenses                              50,000

Salaries                                                         60,000

Rent, rates and insurance                             10,000

Selling expenses                                           30,000

General expenses                                         20,000

Sales                                                          4,00,000

Prepare a statement of Cost and Profit for the year 2010.

The company plans to manufacture 1200 sewing machines in 2011. You are required to submit a statement showing the price at which machines would be sold so as to show a profit of 10% on the selling price. The following  additional information is supplied to you:

1. The price of materials will rise by 20% on the previous year’s level.
2. Wage rates will rise by 5%.
• Manufacturing expenses will rise in proportion to the combined cost of materials and wages.
1. Selling expenses per unit will remain unchanged.
2. Other expenses will remain unaffected by the rise in output.

20   Prepare Process accounts, Normal Loss, Abnormal loss and Abnormal Gain accounts from the   following details:

Process No.1               Process No.2

Materials  (Rs)                             30,000                            3,000

Labour (Rs)                                 10,000                         12,000

Inputs (units)                               20,000                         –

Output of the process                 17,500                         17,000

Normal loss on input                   10%                             4%

Sales value of scrap per unit       Re.1                             Rs.2

1. In a manufacturing concern there are four departments viz. A, B, C and D.

A and B are Production Departments and C and D are Service Departments. C renders service worth Rs.12,000 to D and 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 in a year are as follows:

Depreciation                                  Rs.95,000

Rent, Rates and Taxes                  Rs.18,000

Insurance                                       Rs.   7,600

Power                                            Rs.10,000

Canteen expenses                          Rs.   5,400

Electricity                                      Rs.   2,400

Following further information are given regarding the departments:

A                     B                     C                     D

Direct materials (Rs)                       6,000              5,000              3,000             2,000

Direct  labour (Rs)                        20,000             10,000             10,000             5,000

Floor space occupied (sq.ft)            5,000               4,000               1,000             2,000

Value of assets (in lakhs)                      10                     5                       3                    1

H.P. of machines                             1,000                  500                  400                 100

No. of workers                                   100                    50                    50                   25

Light and fan points                            50                    30                    20                   20

From the above particulars prepare a Statement showing overhead expenses of Production Departments A and B after redistribution of Service Department expenses. Also calculate the overhead recovery rate if it is based as a percentage on labour.

Go To Main Page

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

FIFTH SEMESTER – APRIL 2012

# BU 5504/BU 5501 – COST ACCOUNTING

Date : 30-04-2012              Dept. No.                                        Max. : 100 Marks

Time : 9:00 – 12:00

SECTION – A

ANSWER ALL QUESTIONS:                                                                                   (10×2 = 20marks)

1. What is a cost sheet?
2. What is Bin Card?
3. What is Merit Rating?
4. What is ‘under-absorption’ of overheads?
5. Explain ‘Escalation Cause’.
6. Compute the prime cost:         Rs.

Direct Material used                                         82,000

Productive wages                                              17,000

Royalty paid                                                      11,000

Hire charge of special machines foe the job       13,000

1. Find out the Economic Order Quantity from the following particulars:

Annual usage                                               6,000 units

Cost of placing per unit                                Rs.20

Cost of placing and receiving one order:Rs. 60.  Annual carrying cost of one unit: 10% of Inventory

value.

1. Mr.A a worker in a factory is paid on time basis. During the month of October 2010 he has worked

for 200 hours.  His hourly wage rate is Rs.10 per hour.

Mr.B another employee of the company is paid on the basis of piece wages.  During the month of

January 2010 his output was 1,000 units.  Rate of wages per piece is Rs.3.

Calculate the wages of respective workers for the month of October 2010.

1. The works overheads of a department are Rs.3,00,000.

The direct wages are 3,00,000

The direct material cost is 9,00,000.

Ascertain the prime cost percentage rate of works overhead.

1. A company produces 300 units of product R, 200 units of product ‘S’ and 100 units of product J from

a single process.  The costs upto the point of separation amounted to Rs.30,000.  You are required to

apportion the joint cost of production among the products, using the average unit cost method.

SECTION –B

Answer any FIVE  questions:                                                                              (5 X 8 = 40 marks)

1. Discuss the advantages of Cost Accounting.
2. Explain the causes of labour turnover.
3. Compute the various stock levels from the following data:

Maximum consumption in a month     300 units

Minimum usage in a month                  200 units

Average usage in a month                    225 units

Time-lag for procurement of materials:

Maximum 6 months ;  Minimum  2 months;  Reorder quantity   750 units.

1. The following details pertain to the production department of a factory.

Material consumed                                                                               Rs.60,000

Direct wages                                                                                         Rs.40,000

Machine hours                                                                                      Rs.50,000

Labour hours worked                                                                            Rs.25,000

Factory overhead relating to the department                                         Rs.50,000

Calculate  overhead absorption rates under different possible method from the above detail.

1. Laxmi Travels, a transport company is running a fleet of six buses between two towns 75 kms apart.

The seating capacity of each bus is 40 passengers.  The following particulars are available for the

month of April 2005.

Rs.

Wages of Drivers, Conductors, etc                                                                        3,600

Salaries of office and supervisory staff                                                                  1,500

Diesel oil, etc                                                                                                        10,320

Repairs and maintenance                                                                                       1,200

Taxes and insurance                                                                                               2,400

Depreciation                                                                                                           3,900

Interest and other charges                                                                                       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.

1. The following are the expenses of Balaji & Co., in respect of a contract which commenced on 1st

January 2008.

Rs.

Materials purchased                                                                   50,000

Materials on hand                                                                         2,500

Direct wages                                                                               75,000

Plant issued                                                                                 25,000

Direct Expenses                                                                          40,000

The contract price was Rs.7,50,000 and the same was duly received when the contract was completed in August 2008.  Charge indirect expenses at 15% on wages; provide Rs.5,000 for depreciation on plant and prepare the contract account.

1. From the following particulars calculate the earnings of workers A & B under straight piece rate

system and Taylor’s differential piece rate system.

Standard time allowed 25 units per hour

Normal time rate Rs.50 per hour

Differentials to be applied

80% of piece rate when below standard

120% of piece rate at or above standard

In a day of 8 hours A produced 150 units and B produced 250 units.

1. The cost accounts department of a company has supplied the following data for the supply of 2,000

units of product.

Direct materials:  40,000 tons at Rs.5 per ton.

Direct wages      :   8,000 labour hours at Rs.50 per hour

Variable:               Factory Rs.10 per labour hour

Selling Rs.20 per unit

Fixed:                    Factory Rs.1,00,000

Office   Rs.2,00,000

Prepare a Statement showing the price to be fixed which will fetch a profit of 25% on cost.

SECTION –C

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

1. From the following data, prepare a cost and production statement of Popular Stove Manufacturing

Company for the year 2010.

Rs.

Stock of materials on 1-1-2010                                                            35,000

Stock of materials on 31-12-2010                                                          4,900

Purchase of materials                                                                           52,500

Factory wages                                                                                       95,000

Factory expenses                                                                                   17,500

Establishment expenses                                                                         10,000

Completed stock in hand on 1-1-2010                                                      NIL

Completed stock in hand on 31-12-2010                                                35,000

Sales                                                                                                     1,89,000

The number of stoves manufactured during the year was 4,000.

The company wants to quote for a contract for the supply of 1,000 electric stoves during the year 2011.

The stoves to be quoted are of uniform quality and make, and are similar to those manufactured in the

previous year; but the cost of material has increased by 15% and cost of factory labour by 10%.

Prepare a statement showing the price to be quoted to give the same percentage of net profit on

turnover as was realised during the year 2010 assuming that the cost per unit of overhead charges will

be the same as in the previous year.

1. Make out the necessary accounts from the following details:

Process A                            Process B

Rs.                                     Rs.

Materials                                                                       30,000                                 3,000

Labour                                                                           10,000                               12,000

Input (units)                                                                  20,000                               17,500

Normal loss                                                                       10%                                    4%

Sales of waste per unit                                                    Rs.1                                    Rs.2

There was no opening or closing stock or work-in-progress.  Final output from process B was 17,000

units.

1. In a Light Engineering Factory, the following particulars have been collected for the three monthly

period ended 31-12-2008.  Compute the departmental overhead rates for each of the production

departments, assuming that overheads are recovered as a percentage of direct wages.

 Particulars Production Departments Service departments A B C D E Direct wages (Rs.) Direct materials Staff (Nos.) Electricity (Kwh) Light points (Nos.) Assets value  (Rs.) Area occupied (Sq.mts.) 2,000 1,000 100 4,000 10 60,000 150 3,000 2,000 150 3,000 16 40,000 250 4,000 2,000 150 2,000 4 30,000 50 1,000 1,500 50 1,000 6 10,000 50 2,000 1,500 50 1,000 4 10,000 50

The expenses for the period were:

Rs.                                                                                         Rs.

Motive power                                          550                Amenities to staff                                          1,500

Lighting power                                        100                Repairs and maintenance                               3,000

Depreciation                                        15,000               Rent and taxes                                                    275

Apportion the expenses of service department E proportionate to direct wages and that of service department D in the ratio of 5:3:2 to departments A, B and C respectively.

Go To Main Page

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

FIFTH SEMESTER – NOVEMBER 2012

# BU 5504/BU 5501 – COST ACCOUNTING

Date : 06/11/2012             Dept. No.                                        Max. : 100 Marks

Time : 9:00 – 12:00

PART A

1. Mention two differences between Bin Card and Stores Ledger.
2. Define Cost Unit. Give an example.
3. What is Economic Batch Quantity?
4. What is a Labour Hour Rate?
5. Fill in the blanks:
6. 200 units closing work in progress 60% complete is equal to …………equivalent units.
7. Staff welfare expenses are apportioned among departments in the ratio of …………
8. From the following particulars, calculate the economic order quantity.

Annual requirements :  1,600 units

Cost of materials per unit : Rs.40

Cost of placing and receiving one order : Rs.50

Annual carrying cost of inventory : 10% of inventory value.

1. Rate per hour 1.50 per hour

Time allowed for job      20 hours

Time taken                         15 hours

Calculate the total earnings of the worker under Rowan Plan.

1. Stock as on 1/1/2010 : 1000 units @ Rs.5 per unit

Purchases on 1/1/2010 : 9000 units @ Rs.6 per unit

Sale during the month : 8000 units

Calculate the value of closing stock on 31/01/2010, assuming the weighted average method of pricing is adopted.

1. A machine runs for 2000 hours a month, of which 100 hours is for non-production purposes. The fixed expenses of the machine is Rs.3800 per month and the variable expenses are Rs.3.00 per hour when run for production purposes only.

Calculate the machine hour rate.

1. The joint cost of making 40 units of Product A and 120 units of Product B is Rs.66.The selling price of the products at the split off point are Product A Rs.3 per unit and Product B Rs.2 per unit.

Calculate the share of joint cost of each product, if they are apportioned on sale value basis.

PART  B

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

1. Write short notes on:
2. Labour turnover
3. Treatment of overtime in Cost Accounts.
4. Perpetual Inventory system
5. Retention money
6. Compare and contrast Financial Accounting with Cost Accounting.
7. Calculate the earnings of workers A and B under Straight Piece-rate System and Taylor’s Differential Piece-rate System from the following particulars.

Normal rate per hour : Rs.18

Standard time per unit : 20 seconds

Differentials to be applied:

80% of piece rate below standard

120% of piece rate at or above standard.

Worker A produces 1,300 units per day and worker B produces 1,500 units per day.

1. Calculate the minimum stock level, maximum stock level and re-ordering level from the following information:
2. Minimum consumption : 100 units per day
3. Maximum consumption : 150 units per day
4. Normal consumption : 120 units per day
5. Re-order period : 10-15 days
6. Re-order quantity : 1500 units
7. Normal delivery time : 12 days
8. From the following data prepare a reconciliation statement and ascertain the profit as per the financial accouts:

Rs.

Profit as per cost accounts                                           1,45,500

Overvaluation of opening stock in cost accounts     15,000

Overvaluation of closing stock in cost accounts         7,500

Interest earned during the year                                                      3,750

Rent received during the year                                        27,000

Preliminary expenses written off during the year    27,000

1. A product passes through 2 processes, A and B before it is completed.

100 units of raw material are introduced in Process A at a cost of RS.10 per unit. Other details relating to the 2 processes are:

Process A                            Process B

Labour                                                                  Rs.400                                   Rs.100

Other expenses                                                               Rs.202                                   Rs.  90

Normal loss as a %age of input                   10                                           20

Sale value of normal loss per unit             Rs.3                                        Rs.4

Output in units                                                  75                                           70

Prepare Process accounts, Abnormal Loss Account and Abnormal Gain Account.

1. The Chennai Transport Co has been given a route 50 kms long to run a bus. The bus costs Rs.4,50,000. It has a life of 5 years and no salvage value. It is insured for 4% per annum and has an annual tax of RS.18,000 per annum. Other details are : Garage rent Rs.4,000 per month; Driver’s salary Rs.6,000 per month; Conductor’s salary : Rs.5,000 per month and office expenses Rs.10,000 per month.

Petrol will cost Rs.100 for 20 kms. The bus will run 3 round trips per day, carrying on an average 40 passengers on each trip. It will run for 30 days in a month.

If the company wants a profit of 20% on takings, what should be the fare per passenger kilometre?

1. The following information has been obtained from the records of Left-Centre Corporation for the period from January 1 to June 30, 2012.

Rs.                   Rs.

Cost of raw materials                                      30,000             25,000

Cost of work-in-progress                                12,000             15,000

Transactions during six months are:

Purchases of raw materials                              4,50,000

Wages paid                                                     2,30,000

90% of the production was sold @ a profit of 20% on sales.

Prepare statement of Cost and Profit.

PART  C

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

1. A company undertook a contract for construction of a large building complex. The construction work commenced on 1st April 2011 and the following data are available for the year ended 31st March 2012.

Rs.                                                                          Rs.

Contract price                                     350,000

Work certified                                     200,000

Progress payments received                150,000           Site Office cost                       10,530

Materials issued to site                                      85,000                       Direct expenses             9,020

Direct wages paid                                 62,500                       Work not certified        1,490

Material returned from site                     2,500

The contractors own a plant which originally cost Rs.20,000 has been continuously in use in this contract throughout the year. The residual value of the plant after 5 years of life is expected to be Rs.5,000. Straight line method of depreciation is in use.

As on 31st March 2012 the direct  wages due amounted to Rs.2,700 and the materials at site were estimated at Rs.2,000.

1. Prepare the contract account for the year ended 31st March 2012.
2. Show the Contractee’s account.
3. Show the relevant balance sheet entries.
4. Following are the particulars for the production of 2,000 sewing machines of Nath Engineering Co. Ltd., for the year 2011.

Cost of materials Rs.1,60,000; Wages Rs.2,40,000; Manufacturing expenses Rs.1,00,000; Administration expenses Rs.1,80,000; Selling expenses Rs.40,000; Sales Rs.8,00,000.

Prepare a statement of cost and profit for 2011.

The company plans to manufacture 5,000 sewing machines during 2012.

The following additional information is supplied to you:

1. Price of material is expected to rise by 20%
2. Wages rates are expected show a decrease of 10%
3. Manufacturing expenses will rise in proportion to the combined cost of materials and wages.
4. Selling expenses per unit will remain the same
5. Other expenses will remain unaffected by the rise in output.

Prepare a statement showing the price at which the machine should be sold in 2012 to earn a profit  of 10% on sales.

1. The “Modern Company” is divided into four departments: A and B are production departments and X and Y are service departments. The actual costs for a period are as follows:

Rs.                                                                   Rs.

Rent                                        1,000   Supervision                                         1,500

Repairs to plant                           600  Fire insurance in respect of stock            500

Depreciation of Plant                  450  Power                                                      900

Light                                                       350

The following information is available in respect of the four departments:

Dept A                        Dept B                        Dept X                        Dept Y

Area (sq.metres)                      1500                1100                     900                 500

Number of employees                  20                    15                      10                     5

Direct wages (Rs.)                  6000                4000                   3000               2000

Value of Plant (Rs.)                24000              18000              12000                6000

HP of Plant                                    24                    18                    12                     6

Light points                                    15                    10                      5                     5

Direct material                           4000                3000                1500                1000

Value of stock                            1000                  600                  400                  –

Apportion Service Dept X’s  expenses between A, B and Y in the ratio of 2:2:1 and Service Dept Y’s expenses between A and B in the ratio of direct wages.

If the estimated machine hour in Departments A and B are 2000 hours and 1800 hours respectively, calculate the Machine Hour Rate for each department.

Go To Main page

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