14N/154
CLASS: B.Com. C.A.
St. JOSEPH’S COLLEGE (AUTONOMOUS) TIRUCHIRAPPALLI – 620 002
SEMESTER EXAMINATIONS – NOVEMBER 2014
TIME: 3 Hrs.
MAXIMUM MARKS: 100
SEM
SET
PAPER CODE
TITLE OF THE PAPER
V
2012
11UCC530213
COST ACCOUNTING
SECTION – A
Answer all the questions:
20 x 1 = 20
Choose the correct answer:
1. The most important purpose of cost accounting system is to
a) Fix salary of employees
b) Help in inventory valuation
c) Provide information to management for decision making
d) Earn extra profits
2. Cost of idle time arising due to non-availability of raw materials is
a) Charged to costing P & L a/c b) Charged to Factory overhead
c) Charged to P & L a/c
d) None of these
3. Abnormal loss is charged to
a) Process a/c
c) Normal loss a/c
b) Costing P & L a/c
d) P & L a/c
4. Contract costing is a native of
a) Standard costing
c) Marginal costing
b) Job costing
d) Unit costing
5. Marginal expenses which cannot be identified with single unit of
output is known as
a) Unit material
b) Raw material
c) Indirect material
d) Direct material
Fill in the blanks:
6. The reorder level is just above the _______.
7.
8.
Taylors differential price rate system provides for higher rates to
_______ workers.
Firms manufacturing soap, chemicals etc are following _______
costing.
9.
Profit on incomplete contract is transferred to _______.
10. No profit no loss is _______ analysis.
State True or False:
11. Reorder level = maximum consumption  minimum reorder
period.
12. Time wage system guarantees a minimum wage to the workers.
13. Normal loss is an unavoidable loss.
14. Marginal cost is an additional cost incurred for every additional
unit.
15. Variance is the difference between the actual cost and standard
cost.
Answer in one or two sentences:
16. Define ‘Costing’.
17. What is Economic order quantity?
18. What is process costing?
19. What is cost plus contract?
20. What is standard costing?
SECTION – B
Answer all the questions:
5 x 7 = 35
21. a. Following information is extracted from the stores ledger.
Issue of materials
Date
Units
Sept. 1 Opening balance 500 units at ` 10 Sept. 9
500
Sept. 6 Purchases 100 units at ` 11
Sept. 22
500
Sept. 20 Purchases 700 units at ` 12
Sept. 30
500
Sept. 27 Purchases 400 units at ` 13
Oct. 13 Purchases 1,000 units at ` 14
Oct. 15
500
Oct. 20 Purchases 500 units at ` 15
Oct. 22
500
Nov. 17 Purchases 400 units at ` 16
Nov. 11
500
Issues are to be priced on the principle of ‘FIFO’. Write the
stores ledger account.
OR
b. From the following information calculate:
Maximum stock level, Minimum stock level, Re-order level
and Average stock level.
Minimum consumption -240 units per day
Maximum consumption -420 units per day
Normal consumption
-300 units per day
Re-order quantity
-3,600 units
Normal re-order period -12 days
Re-order period
-10-15 days
Date
Particulars
22. a. A factory has three service departments. L, M and N and two
production departments X and Y. The following are the
expenses allocated and apportioned to the departments as per
primary distribution summary.
L
M
N
X
Y
` 12,000
` 12,000
` 12,000
` 30,000
` 40,000
The following additional information extracted on the basis of
a detailed analysis is also available:
Service Department Production Department
L
M
N
X
Y
L’s service used
-20% 30%
30%
20%
M’s service used --40%
30%
30%
N’s service used
---60%
40%
Prepare a statement showing apportionment of service department
overheads under the step method.
OR
b. An employee working under the Halsey Premium Bonus plan
gets an hourly rate ` 1 to complete a job in 8 hours. If he
completes the job in 5 hours, calculate his total earnings
assuming that the bonus is 50% of time saved. What
difference would it make in his total earnings if bonus were 33
33 13 % of the time saved?
23. a. From the following data prepare a reconciliation statement.
`
Profit as per cost accounts
1,45,000
Works overheads under-recovered
9,500
Administration over-heads under-recovered
22,750
Selling overheads over-recovered
19,500
Over-valuation of opening stocks
15,000
Over-valuation of closing stocks
7,500
Interest earned during the year
3,750
Rent received during the year
27,000
Bad debts written off
9,000
Preliminary expenses written off
18,000
OR
b. A batch of 600 units was introduced in a process at ` 20 per
unit. 500 units were completed and transferred to the finished
goods. The normal process loss was 20% of the input and the
scrap is normally sold at ` 3 each. The labour and overhead
expenditure incurred in the process amounted to ` 600. You
are required to show the process and abnormal gain accounts.
24. a. At SS Ltd. undertook a contract on 1.1.2009. The position of
the contract on 31.12.2009 was as under
`
Material issued
58,000
Material on hand
3,000
Plant
9,500
Wages paid
66,000
Wages outstanding
1,000
Indirect expenses
4,300
The contract price was ` 2,30,000. Value of work certified
was ` 1,35,000 and the value of work uncertified was ` 4,000.
Cash received was ` 1,22,000. Plant at site was valued on
31.12.2009 at ` 7,900.
Prepare the contract account and transfer reasonable amount
of P & L a/c.
OR
b. 50 units are introduced into a process at a cost of ` 50. The
total additional expenditure incurred in the processes is ` 32 of
the units introduced 10 percent are normally spoiled in the
course of manufacture, these processors a scrap value of ` 0.20
each. 40 units are produced and transferred to next process.
You are required to a) Prepare a process a/c and b) Give
journal entries to show the loss arising out of spoil units should
be treated.
25. a. Calculate a) P/V ratio b) Fixed cost c) Sales volume to earn a
profit of ` 1,25,000.
Sales ` 5,00,000
Profit ` 65,000
Variable cost is 70% of sales.
OR
b. Standard hours required for manufacturing 1 unit of a product
is 5 hours @ ` 30 per hour. If the company paid ` 2,97,000 for
manufacturing 2,000 units @ ` 27 per hour, find out LCV,
LRV and LEV.
SECTION – C
Answer any THREE questions:
3 x 15 = 45
26. Two materials, X and Y are used as follows
Minimum usage
50 units per week
Maximum usage
150 units per week
Normal usage
100 units per week
Ordering quantity X 600 units
Y 1,000 units
Delivery period
X - 4 - 6 weeks
Y - 2 - 4 weeks
Calculate for each material
a) Minimum level
b) Maximum level
c) Ordering level
27. From the following calculate the labour cost per man day of 8
hours.
a) Basic salary ` 5 per day
b) Dearness allowance: 20 pairs per every point over 100 cost
of living index for workers
c) Leave salary: 5% of a) and b)
d) Employer’s contribution to provident fund 8% of a) and b)
e) Employer’s contribution to state insurance: 5% at a) and b)
and c)
f) Number of working days in a month: 25 days of 8 hours each
28. From the following figures show the cost of three processes of
manufacture. The production of each process is passed on the next
till completion.
Process A Process B Process C
`
`
`
Wages and materials 60,800
24,000
58,500
Works on cost
11,200
10,500
12,000
Production (in units) 72,000
75,000
96,000
Stock (1st July 03)
--8,000
33,000
Stock (31st July 03)
--2,000
11,000
29. The following expenses were incurred by a company in operating
two trucks for 30 days
Truck 1 Truck 2
`
`
Direct wages
1,200
1,200
Cleaner’s wages
1,100
1,150
Diesel
180
250
Repairs
1,500
1,500
Depreciation
3,300
2,200
Supervisor
700
700
Carriage rent
1,300
1,100
Road tax
800
850
Particulars
30. Find out material cost variance, material quantity variance,
material price variance and material yield variance from the
following particulars.
Standard
Actual
Material Quantity Rate Amount Quantity Rate Amount
`
`
`
`
X
30,000 4.00 1,20,000 27,000 4.50 1,21,500
Y
20,000 3.00
60,000 28,000 2.00
56,000
Total
50,000
1,80,000 55,000
1,77,500
Actual production is 45,000 units standard loss is 10%.
**************