LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.Com. DEGREE EXAMINATION – COMMERCE
SUPPLEMENTARY EXAMINATION – JUNE 2009
CO 5501 - COST ACCOUNTING
Date & Time: 25/06/2009 / 10:00 - 1:00 Dept. No.
Max. : 100 Marks
PART A
Answer ALL questions
Marks:10x2=20
Explain the following:
1. Machine hour rate
2. Halsey plan
3. Abnormal gain
4. Labour turnover
5. Works certified
6. Opportunity cost
7. Calculate the Economic Order quantity from the following data:
Annual usage 6000 units
Material cost per unit Rs.20
Cost of placing and receiving an order Rs.60
Annual carrying cost of 1 unit 10% of inventory value
8. A petrol bunk has a stock of 10,000 litres of petrol on 1/1/09 costing Rs.20 per litre. On the same
date it received 50,000 litres at Rs.22 per litre. During the month it sold 45000 litres at Rs.25 per
litre. Calculate the value of this stock on 31/1/2009 assuming issues are priced under:
a) FIFO method
b) LIFO method
9. 75 units are introduced in process 1 costing Rs.1,310 per unit. Other process expenses are Rs.190.
20% of input is normal loss, which is sold at Rs.4 per unit. Actual output is 70 units. Prepare Process
1 account.
10. A transport company runs a bus between two towns 100 kms apart. The bus makes one round trip a
day and operates for 30 days in a month. The bus has a capacity of 40 passengers and on an average
80% of the capacity is occupied. The total estimated expenses for the month is Rs.1,20,000.
Calculate cost per passenger kilometer.
PART B
Answer ANY FIVE questions
Marks:5x8=40
11. Distinguish between Financial Accounting and Cost Accounting.
12. Define Overheads. Distinguish between “Allocation” , “Apportionment” and “Absorption of
overheads”.
13. From the following data, calculate the cost per kilometer of running a vehicle.
Value of vehicle Rs.3,00,000
Road licence per year Rs.500
Insurance per year Rs.100
Garage rent per year Rs.600
Drivers wages per month Rs.200
Cost of petrol per litre Rs.40
Kilometers per litre.. 8
Tire and maintenance per kilometer Re.1
Estimated life 1,50,000 kilometers
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Estimated annual kilometers 6000.
14. The following information is obtained from the books of X Ltd for the year ending 30th June 2008:.
Opening stock of raw material Rs.30,000
Opening stock of finished goods Rs.60
Closing stock of raw material Rs.25,000
Closing stock of finished goods Rs.55,000
Transactions during the period:
Purchase of raw material Rs.4,50,000
Wages paid Rs.2,30,000
Factory overheads Rs.90,000
Administration overheads Rs.30,000
Selling overheads Rs.20,000
Sales Rs.9,00,000
Prepare a statement of Cost and Profit.
15. From the following data calculate reorder level, minimum level, maximum level and average stock
level.
Reorder period 4 to 6 weeks
Consumption 25 to 75 units per week
Reorder quantity 300 units
16. From the following data calculate earnings of a worker for a week under:
a. Straight piece rate
b. Taylors differential piece rate
c. Rowan plan
Number of working hours per week 48
Wages per hour Rs.3.75
Rate per piece Rs.1.50
Normal time per piece 20 minutes
Normal output per week 120 pieces
Actual output for the week 150 pieces
Differential piece rate 80% piece rate when output is below standard and 120% when above
standard.
17. The following transaction took place in respect of material X.
2nd January 2009 received 200 units at Rs.2 per unit
10th January received 300 units at Rs.2.40 per unit
15th January issued 250 units
18th January received 250 units at Rs.2.60 per unit
20th January issued 200 units
Record the above transactions in the Stores Ledger pricing issues under Weighted Average Method.
18. From the following data prepare Reconciliation statement and ascertain the profit as per Financial
Accounts:
a. Profit as per cost accounts Rs.1,45,500
b. Works overheads under recovered Rs.9,500
c. Administration overhead under recovered Rs.22,750
d. Selling overheads over recovered Rs.19,500
e. Over valuation of opening stock in costing Rs.15,000
f. Under valuation of closing stock in financial Rs.7,500
g. Interest received during the year Rs.3,750
h. Bad debts written off during the year Rs.9,000
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PART C
Answer ANY TWO questions
Marks:2x20=40
19. From the following data prepare process A account
Units introduced in Process A 4000
Units completed and transferred to Process B 3200
Closing stock of work in progress
800 units
(Stage of completion – material 80%; labour and overheads 70%)
Normal process loss 5% of input
Scrap value of loss Re.1 per unit
Value of raw materials Rs.7,480
Wages
Rs.10,680
Overheads
Rs.7,120
20. A contracting company commenced a contract in 1st April 2006 for a contract price of Rs.6,00,000.
The following were the details for the year ending 31st March 2007.
Materials issued Rs.2,20,000
Plant issued Rs.50,000
Wages incurred Rs.80000
Other expenses Rs.5000
Cash received on account upto 31st March 2007 amounted to Rs.2,40,000 being 75% of the work
certified.
Of the plant and materials charged to the contract, plant costing Rs.5,000 and materials costing
Rs.4,000 were lost.
On 31st March 2007, plant costing Rs.8,000 was returned to stores
Work uncertified was Rs.10000 and material on hand at site on 31st March 2007 was Rs.5,000.
Depreciation is to be charged at 20% per annum on plant.
Prepare Contract account, Contractee’s account and the Balance Sheet.
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, Electricity Rs.2400, Indirect wages Rs. 4000, Power Rs. 6000, Depreciation
on machinery Rs. 40000, Welfare expenses Rs. 40000. The following further details are available:
Total A
B
C
X
Y
No of employees
400 120
80
100
50
50
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 50000 60000 80000 10000 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
40% 20% 30% 10%
Y
20% 30% 40% 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. 800 material, Rs.300 in
wages and the job is handled by the three production depts. as follows:
Dept A. 6 hrs., Dept.B 5 hrs and Dept C. 2 hrs. A profit of 25% on total cost is expected.
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