LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034 – JUNE 2008 SUPPLEMENTARY EXAMINATION

```LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.Com. DEGREE EXAMINATION – COMMERCE
SUPPLEMENTARY EXAMINATION – JUNE 2008
CO 5501 - COST ACCOUNTING
Date : 27-06-08
Time : 9.00 – 12.00
Dept. No.
Max. : 100 Marks
PART A
Marks : 10 x 2 = 20
1.
2.
3.
4.
5.
6.
7.
8.
Mention 2 expenses not included in Cost.
Distinguish between ‘Fixed’ and ‘Variable’ cost.
State 2 methods of absorbing factory overheads
What is ‘Opportunity Cost’?
What are ‘Joint products’ and ‘By products’?
What is ‘Margin of Safety’?
Selling price per unit Rs.40; Variable cost per unit Rs.25; Fixed cost Rs.15,000. Calculate break even sales
in units and rupees.
9. Standard time allowed for a job is 10 hours. X completes the job in 8 hours. Rate per hour is Rs.10.
Calculate his earnings under Halsey and Rowan Plan.
10. Year
Sales(Rs.)
Profit(Rs.)
2006
2,00,000
20,000
2007
2,50,000
30,000
Calculate:
a) Profit volume ratio
b) Sales to earn a profit of Rs.60,000.
PART B
Marks : 5 x 8 = 40
11. Explain the reasons for the difference between the profits shown in Financial Accounts and that shown in
the Cost Accounts.
12. Distinguish between ‘Job costing’ and ‘Process costing’.
13. What are the steps involved and problems faced in installing a Costing system?
14a.Calculate the minimum stock level, maximum stock level and re-ordering level from the following
information:
i) Minimum consumption = 100 units per day
ii) Maximum consumption = 150 units per day
iii) Normal consumption = 120 units per day
iv) Re-order period
= 10-15 days
v) Re-order quantity
= 1500 units
vi) Normal re-order period = 12 days
14b. 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
Annual carrying cost of one unit : 10% of inventory value
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15. From the following data calculate the cost per km. of a vehicle:
Value of vehicles
Rs.15,000
Rs. 500
Insurance charges per year
Rs. 100
Garage rent per year
Rs. 600
Driver’s wages per month
Rs. 200
Cost of petrol per litre
Rs.
0.80
Km. per litre
8
Proportionate charge for tyres and maintenance per km Re. 0.20
Estimated life
1,50,000 kms
Estimated annual kilometers
6,000
Ignore interest on capital.
16. 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. 1.80
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 of 8 Hours.
17. From the following information relating to the machine, ‘Shylock’ installed in a factory, work out the
machine hour rate:
Purchase price of the machine with scrap value of zero Rs.90,000
Installation and incidental charges incurred on the machine Rs.10,000
Life of the machine is 10 years of 2,000 working hours each
Repairing charges – 50% of depreciation
Machine consumes 10 units of electric power per hour @ 10 p per unit.
Oil expenses @ Rs.2 per day of eight hours
Consumable stores @ Rs.10 per day of eight hours
The operator is engaged on the machine @ Rs.4 per day of eight hours.
18. From the following data prepare a reconciliation statement:
Rs.
Profit as per cost accounts
1,45,500
9,500
22,750
19,500
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
27,000
Bad debts written off during the year
9,000
Preliminary expenses written off during the year
18,000
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PART C
Marks : 2 x 20 = 40
19. A firm of building contractors began to trade on 1st April, 2007. The following was the expenditure on the
contract for Rs.3,00,000:
Materials issued to contract Rs.51,000; Plant used for contract Rs.15,000; Wages incurred Rs.81,000;
Other expenses incurred Rs.5,000.
Cash received on account to 31st March, 2008, amounted to Rs.1,28,000 being 80% of the work certified.
Of the plant and materials charged to the contract, plant which cost, Rs.3,000 and materials which cost
Rs.2,500 were lost. On 31st March, 2008 plant which cost Rs.2,000 was returned to store, the cost of work
done but uncertified was Rs.1,000 and materials costing Rs.2,300 were in hand on site.
Charge 15% depreciation on plant,.
Prepare the Contract Account, Contractee’s Account and Balance Sheet from the above particulars.
20. The following are the particulars for the production of 2000 radios of X Ltd for the year 2007. Materials ..
Rs.1,60,000; Wages .. Rs.2,40,000; Factory expense .. Re.1,00,000; Administration expenses..
Rs.1,80,000; Selling expense .. Rs.60,000; Sales .. Rs.8,00,000.
Prepare a statement showing Cost and Profit per machine.
In the year 2008 the company plans to manufacture and sell 3,000 radios. The following additional
information is given:
a) Material prices are expected to rise by 20% and wage rates by 5%
b) Factory expenses are recovered as a percentage on prime cost
c) Selling expenses per unit will remain the same
d) Administration expenses will remain unaffected by the rise in output.
You are required to prepare a statement showing the price at which the radio should be sold in 2008 to
earn a profit of 20% on cost.
21. A company produces a product which passes through three processes A, B and C. 20000 units are
introduced in processing at a cost of Rs.10,000. Other details are as follows:
A
B
C
Materials consumed (Rs.)
6.000
4,000
2,000
Direct wages
8,000
6,000
3,000
Factory expenses
1,000
1,000
1,500
Normal loss (%age on input)
2%
5%
10%
Sale value of loss per 100 units (Rs)
5
5
20
Output in units
19,500
18,800
16,000
Prepare Process Accounts, normal loss account abnormal loss account and abnormal gain account.
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