CLASS: B.B.A.
11A/ 110
St. JOSEPH’S COLLEGE (AUTONOMOUS) TIRUCHIRAPPALLI – 620 002
SEMESTER EXAMINATIONS – APRIL 2011
TIME: 3 Hrs.
MAXIMUM MARKS: 100
SEM
SET
PAPER CODE
TITLE OF THE PAPER
II
2010
08UBU230204
COST ACCOUNTING
SECTION – A
Answer all the questions:
20 x 1 = 20
Fill in the blanks:
1.
______ is the technique and process of ascertaining the cost of activities, processes, products
or services.
2.
______ is known as automatic inventory system.
3.
______ means the allotment of whole items of cost to cost centres or cost units.
4.
______ refers to the loss which is unavoidable in a manufacturing process.
5.
In cost accounts, ______ are absorbed on the basis of pre – determined rates.
Choose the correct answer:
6.
______ is a form of specific order costing, the attribution of costs to batches
a) Service costing
b) Process costing
c) Batch costing
7.
A written request to a supplier for specified goods at an agreed upon price is called as ______
a) Purchase order
b) Purchase requisition
c) Receiving report
8.
______ expenses incurred for actual sales and promotion of sales
a) Distribution overhead
b) Administrative off
c) Selling overhead
9.
______ costing, each contract is treated as a separate const unit and assigned a number to
ascertain the cost and profit
a) Service costing
b) Contract costing
c) Job costing
10.
An abnormal gain in a process occurs in which of the following situations
a) When actual losses are greater than the normal loss level
b) When costs are reduced through increased machine speed
c) When actual losses are less than the normal level
d) When the process output is greater than planned
State True or False:
11.
The cost of converting raw materials to finished product is known as conversion cost.
12. Purchase order is prepared by the purchasing department.
13. Measurement of labour turnover gives an idea of the degree of mobility of labour.
14. Cost of indirect materials is apportioned to various departments.
15. Process costing is applied in garment industry.
Match the following:
16.
17.
18.
19.
20.
Indirect cost
a) Dividend paid
Any scheme of wage payment should
b) Overhead
based on
Lighting
c) Specific order costing
Contract costing
d) Time and Motion study
Appropriation of profits
e) Floor area
SECTION – B
Answer all the questions:
21.
a.
b.
22.
a.
5 x 4 = 20
Distinguish between financial accounting and cost accounting.
OR
From the following particular prepare cost sheet:
Direct materials – 8,000; Direct wages – 6,000;
Direct Expenses – 2,500; Administrative overheads – 4,000;
Factory overheads – 5,000; Sales – 40,000.
From the following information, calculate
(i) Maximum stock level
(ii) Minimum stock level
(iii) Re-order level
Minimum consumption
Normal consumption
Maximum consumption
Re – order quantity
Re – order period
Normal order period
240 units per day
300 units per day
420 units per day
3,600 units
10 to 15 days
12 days
OR
b.
Discuss the various elements of cost.
23.
a.
John Industries Ltd,. has four departments. A, B, and C are production departments and
D is the service department. The actual expenses for a month were as follows:
Rent
6,000 Repairs of plant
3,600
Depreciation
2,700 Insurance of stock
3,000
Lighting changes
600 Employees insurance employers
900
liability
Supervision
9,000
Power
5,400
The following information is also available
Area Sq. ft
No. of workers
Total wages (`)
Value of plant (`)
Value of stock (`)
Dept. A
300
48
8,000
24,000
15,000
Dept. B
200
32
6,000
18,000
9,000
Dept. C
180
24
4,000
12,000
6,000
Dept. D
100
16
2,000
6,000
-
Apportion the costs to four departments on the most equitable method.
b.
24.
a.
OR
During the year 31.3.2010 the factory overhead costs of three production departments of
an organization are as under.
x = ` 47,500 y = ` 88,900 z = ` 62,750
The basis of appointment of overheads is given below:
Dept. x – `5 per machine hour for 10,000 hours.
Dept. y – 75% of direct labour cost of ` 1,20,000
Dept. z – ` 4 per unit for 15,000 units.
Prepare a statement showing department wise under or over absorption of overheads.
The following were the expenses on a contract which commenced on 1st January 2010.
`
Materials purchased
10,000
Materials at the end
1,250
Direct wages
15,000
Plant issued
5,000
Direct expenses
8,000
The contract price was ` 1,50,000. It was duly received when the contract was
completed on 30th September 2010. Change indirect expenses at 15% on wages and
provide `1,000
for depreciation on plant. Prepare the contract account and contractee’s account.
OR
b.
Product A passes through three distinct processes. The product is transferred to finished
stock after the third process. Prepare the process accounts from the information given
below:
Process I (`)
Process II (`)
Process III (`)
4,000
1,500
650
600
1,600
400
550
900
-
Direct materials
Direct labour
Direct expenses
The production overheads during the period were ` 6,000. It is to be apportioned to
different processes on the basis of 150% of direct labour. There was no opening or
closing stock. Production during the period was 200 units.
25.
a.
The
financial
books
of
a
company
show
a
net
profit
of
` 2,57,510 for the year ending 31st December. The cost accounts show a net profit of `
3,44,800 for the same corresponding period.
The following facts are brought to light. Prepare a reconciliation statement.
`
Under – recovery of factory overheads in cost A/c’s.
6,240
Over –recovery of overheads in cost A/c’s
3,400
Depreciation in financial accounts
22,400
Depreciation in cost accounts
25,000
Interest on investments not included in cost
16,000
Loss of obsolescence charged in financial A/c’s
11,400
Income tax debited in financial accounts
80,600
Bank interest and dividend credited to financial A/c’s
2,450
Loss in stock not changed
13,500
OR
b.
Prepare a production budget for 3 months ending March 31, 2009 for a factory producing
four products on the basis of the following information.
Type of
product
Estimated stock on Jan. 1st
2009
(units)
Estimated sales
during Jan–Mar
2009 (units)
Desire closing
stock March 31
2009 (units)
A
2,000
10,000
5,000
B
3,000
15,000
4,000
C
4,000
13,000
3,000
D
5,000
12,000
2,000
SECTION – C
Answer any FOUR questions:
26.
27.
28.
29.
4 x 15 = 60
Prepare a cost sheet of machine and calculate the price at which the company should quote for
the manufacture of a machine requiring materials of ` 1,250, productive wages ` 750 and
factory overhead ` 150. So that the price may yield a profit of 20% on the selling price. You
are given the accounts of a company manufacturing the type of machines referred to above for
the
6 months ending 31st December and further details.
Materials used
1,50,000
Productive wages
2,40,000
Factory overhead
24,000
Other expenses
17,640
From the particulars given below, prepare stores Ledger A/c under a (i) simple average price
method and (ii) weighted average price method.
Date
Particulars
Units
Rate P/U (`)
Jan.1, 1998
Balance
100
6
Jan. 5
Purchase
600
7
Jan. 20
Issues
400
Feb. 5
Issues
200
Feb. 6
Purchases
500
8
March 10
Issues
400
March 12
Issues
200
The following details pertain to the production department of a factory.
(`)
Material consumed
60,000
Direct wages
36,000
Machine hours
18,000
Labour hours worked
27,000
Factory overheads
54,000
Output during the year
9,000
Calculate overhead absorption rate under different methods possible from the above data.
Lakshmi Industries Ltd., is engaged in the manufacture of chemical x which is obtained after it
passes through three distinct process. You are required to prepare process accounts, abnormal
gain and abnormal loss accounts.
Materials
Process I (`)
5,200
Process II (`)
3,960
Process III (`)
5,924
Direct wages
4,000
6,000
8,000
Production OH
18,000
1,000 units at ` 6 per unit were introduced in process I production OH is to be distributed
at 100% on wages.
30.
Actual output
Normal loss
Value of scrap P/U (`)
Process I
950
5%
4
Process II
840
10%
8
Process III
750
15%
10
Draw up a flexible budget for overhead expenses on the basis of the following data and
determine the OH rates at 70%, 80% & 90? Plant capacity.
At 70%
capacity
At 80%
capacity (`)
At 90%
capacity
Variable OH
Indirect Labour
-
12,000
-
Stores including spaces
-
4,000
-
Semi – variable OH power (30% fixed, 70%
variable)
-
20,000
-
Repairs and maintenance (60% fixed, 40%
variable)
-
2,000
-
Fixed OH: Depreciation
-
11,000
-
Insurance
-
3,000
-
Salaries
-
10,000
-
-
62,000
-
Estimated direct labour hours – 1,24,000 hrs.
**************