LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.Com. DEGREE EXAMINATION – CORPORATE SECRETARYSHIP
SUPPLEMENTARY EXAMINATION – JUNE 2008
BC 5501 - COST ACCOUNTING
Date : 28-06-08
Time : 9.00 – 12.00
Dept. No.
Max. : 100 Marks
PART A
Answer ALL questions
10 x 2 = 20 marks
Explain the following:
1.
Cost unit
2.
ABC Analysis
3.
Bin Card
4.
Equivalent units
5.
Opportunity cost
6.
Machine Hour rate
7.
Rowan plan
8.
Two expenses not included in Cost Accounts.
9.
Allocation and apportionment of overheads.
10. Works certified and uncertified
PART B
Answer ANY FIVE questions
5 x 8 = 40 marks
11.
What are ‘idle time’ and ‘overtime costs’? Explain their treatment in Cost Accounts.
12.
What is Labour Turnover? State the reasons and cost associated with Labour Turnover.
13.
Mr. S owns a fleet of taxis and the following information is available from the records maintained
by him:
Number of taxis
10
Cost of each taxi
Rs.54,600
Salary of manager
Rs. 700 p.m.
Salary of accountant
Rs. 500 p.m
Salary of cleaner
Rs. 200 p.m.
Salary of mechanics
Rs. 400 p.m.
Garage rent
Rs. 600 p.m.
Insurance premium
5 % p.a.
Annual tax
Rs. 900 per taxi
Driver’s salary
Rs. 350 p.m. per taxi
Annual repairs
Rs. 1,000 per taxi
Total life of a taxi is about 2,00,000 kms. A taxi runs, in all, 3,000 kms. in a month and 30% of this
distance has to be run without any passenger. Petrol consumption is one litre for every 10 kms. @
Rs.4.41 per litre. Oil and other sundries are Rs.10.50 per 100 kms.
Calculate the cost of running a taxi per km.
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14.
Calculate the earnings of workers A and B under Straight Piece Rate System and Taylors
Differential Piece Rate System from the following particulars:
Normal rate per hour Re.1.80
Standard time per unit 20 secs
Differentials to be applied
:
80% of piece rate below standard
120% of piece rate at or above standard.
Worker A produces 1300 units per day and Worker B produces 1500 units per day.
15.
A) Calculate Economic Order Quantity from the following:
Annual requirement 600 units
Ordering cost per order Rs.12
Carrying cost 20%
Price per unit Rs.20
B) From the following data calculate:
Re-order level
Minimum level
Maximum level
Average stock
Re-ordered quantity 300 units
Usage 25 to 75 units per week
Re-order period 4 to 6 weeks
16.
Calculate the machine hour rate from the following
Cost of machine Rs.19200
Estimated scrap value Rs.1200
Repairs and maintenance Rs.150 per month
Standing charges allocated to the machine per month Rs.50
Effective working life of machine 10000 hrs.
Running time per month 166 hours
Power used by the machine 5 units per hour at 19 paise per unit
17.
The accounts of a machine manufacturing company disclosed the following data for the year ending
31st December 2007:
(Rs.)
Material used
1,50,000
Direct wages
1,20,000
Factory overheads
30,000
Administration overheads
15,000
Selling overheads
24,000
Prepare a Cost sheet for the machines.
In the year 2008, the company is required to quote for a machine which will require Rs.1250 in
materials and Rs.750 as wages, so that it will earn a profit of 20% on selling price.
Factory overheads are recovered as a percentage of Direct wages and Administration and Selling
overheads as a percentage of Works cost.
Calculate the price to be quoted for the machine.
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18.
The following transactions took place in the month of December 2007 in respect of material X:
Dec.1 purchased 200 units at Rs.2 per unit.
10th purchased 300 units at Rs.2.4 per units
15th issued 250 units
18th purchased 250 units at Rs.2.6 per unit
24th purchased 150 units at Rs.2.5 per unit
30th issued 200 units
Prepare the Stores Ledger, pricing the issues under Weighted Average Method.
PART C
Answer ANY TWO questions
2 x 20 = 40 marks
19. 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
6000
5000
Work in progress
7000
6500
Finished stock
5000
4500
Closing Stock:
Raw material
4000
4300
Work in progress
3000
3700
Finished stock
5900
6200
Purchases
40000
40000
Direct wages
20000
20000
Factory overheads
20000
21000
Administration overheads
3000
2300
Selling overheads
4000
4500
Loss on sale of assets
1000
Interest and dividend received
1600
Sales
110000
Calculate the profit in Financial A/cs and Cost A/cs and prepare a statement reconciling the two
profits.
20. The product of a manufacturing concern passes through two processes A and B and then to finished
stock. It is ascertained that in each process normally 5% of the total weight is lost and 10% is scrap
which from Processes A and B realizes Rs.80 per ton and Rs.200 per ton respectively.
The following are the figures relating to both the processes:
Materials in tons
Cost of materials per ton in rupees
Wages in rupees
Manufacturing expenses in rupees
Output in tons
Process A
1,000
125
28,000
8,000
830
Process B
70
200
10,000
5,250
780
Prepare Process Cost Accounts, Normal Loss Account, Abnormal Loss Account and Abnormal Gain
Account.
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21. M.Ltd, has 3 production depts.. A, B and C and 2 service dept., X and Y. following particulars are
available for the month of March 2005.
Rent Rs. 15000, Taxes Rs. 5000, Electricity Rs.2400, Indirect wages Rs. 6000, Power Rs.
6000, Depreciation on machinery Rs. 40000, Canteen expenses Rs. 30000, Welfare expenses Rs.
10000. The following further details are available:
Total A
B
C
X
Y
Floor space(Sq mts.)
5000 1000 1250 1500 1000 250
Light points (nos)
240
40
60
80
40
20
Direct wages (Rs.)
40000 12000 8000 12000 6000 2000
HP of machines (nos.)
150
60
30
50
10
Cost of machines (Rs.) 200000 48000 65000 80000 4000 4000
Working hours
2335 1510 1525
The expenses of the service dept. are to be allocated to the production depts.. as follows:
A
B
C
X
Y
X
20% 30% 40% 10%
Y
40% 20% 30% 10% Calculate the overhead absorption rate per hour for each of the three production depts.
What should be the price to be quoted for a job which would require Rs. 1000 material, Rs.500 in
wages and the job is handled by the three production depts. as follows:
Dept A. 4 hrs., Dept.B 8 hrs and Dept C. 2 hrs. A profit of 20% on total cost is expected.
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