JBIET AUTONOMOUS
MBA SECOND
INTERNAL EXAM THIRD SEMESTER
COST AND
MANAGEMENT ACCOUNTING PAPER
SET 1
Q.1. Discuss the following cost
concepts:
(a) Imputed cost
(b) Capitalized
cost
C) Opportunity
cost
Q.2. Calculate
efficiency and activity ratio from the following data:
·
Capacity ratio = 75%
·
Budgeted output = 6,000 units
·
Actual output = 5,000 units
·
Standard Time per unit = 4 hours
Q.3. List the
Financial expenses which are not included in cost.
Q.4. Mention the
main advantage of cost plus contracts.
Q.5. A Company
sells two products, J and K. The sales mix is 4 units of J and 3 units of K.
The contribution
margins per unit are Rs.40 for J and Rs.20 for K. Fixed costs are
Rs.6,16,000 per
month. Compute the break-even point.
Q.6. Mega Company has just
completed its first year of operations. The unit costs on a normal costing
basis are as under: Rs.
- Direct material 4 kg @ Rs.4 = 16.00
- Direct labour 3 hrs @ Rs.18 = 54.00
- Variable overhead 3 hrs @ Rs.4 = 12.00
- Fixed overhead 3 hrs @ Rs.6 = 18.00
- 100.00
Selling and administrative costs:
- Variable Rs.20 per unit
- Fixed Rs.7,60,000
- During the year the company has the following activity:
- Units produced = 24,000
- Units sold = 21,500
- Unit selling price = Rs.168
- Direct labour hours worked = 72,000
- Actual fixed overhead was Rs.48,000 less than the budgeted fixed overhead. Budgeted variable overhead was Rs.20,000 less than the actual variable overhead. The company used an expected actual activity level of 72,000 direct labour hours to compute the predetermined overhead rates.
Required :
(i) Compute the
unit cost and total income under:
(a) Absorption
costing
(b) Marginal
costing
(ii) Under or over
absorption of overhead
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JBIET AUTONOMOUS
JBIET AUTONOMOUS
MBA SECOND
INTERNAL EXAM THIRD SEMESTER
COST AND
MANAGEMENT ACCOUNTING PAPER
SET 2
Q.7. XP Ltd.
furnishes you the following information relating to process II
·
Opening work-in-progress – NIL
·
Units introduced 42,000 units @ Rs.12
·
Expenses debited to the process:
·
Rs.
·
Direct material = 61,530
·
Labour = 88,820
·
Overhead = 1,76,400
·
Normal loss in the process = 2 % of input.
·
Closing work-in-progress – 1200 units
·
Degree of completion - Materials 100%
·
Labour 50%
·
Overhead 40%
·
Finished output – 39,500 units
·
Degree of completion of abnormal loss:
·
Material 100%
·
Labour 80%
·
Overhead 60%
(viii) Units
scraped as normal loss were sold at Rs.4.50 per unit.
(ix) All the units
of abnormal loss were sold at Rs.9 per unit.
Prepare:
Statement of
equivalent production: statement showing abnormal loss: abnormal loss account.
Q.8. The following information is
available from the cost records of Vatika & Co. For the month of August,
2009:
·
Material purchased 24,000 kg Rs.1,05,600
·
Material consumed 22,800 kg
·
Actual wages paid for 5,940 hours Rs.29,700
·
Unit produced 2160 units.
Standard rates and
prices are:
·
Direct material rate is Rs.4.00 per unit.
·
Direct labour rate is Rs.4.00 per hour
·
Standard input is 10 kg. for one unit
·
Standard requirement is 2.5 hours per unit.
Calculate all
material and labour variances for the month of August, 2009.
Q.9. Standard Time
for a job is 90 hours. The hourly rate of Guaranteed wages is Rs.50.
Because of the
saving in time a worker a gets an effective hourly rate of wages of Rs.60
under Rowan
premium bonus system. For the same saving in time, calculate the hourly
rate of wages a
worker B will get under Halsey premium bonus system assuring 40% to
worker. Explain briefly, what do
you understand by Operating Costing. How are composite units computed?
Q.10. The following information
relating to a type of Raw material is available:
·
Annual demand 2000 units
·
Unit price Rs.20.00
·
Ordering cost per order Rs.20.00
·
Storage cost 2% p.a.
·
Interest rate 8% p.a.
·
Lead time Half-month
Calculate economic order quantity and
total annual inventory cost of the raw material
Q.11. write a detailed note on the
eight functional budgets prepared by a business
Sales Budget; Production Budget; Plant Utilisation Budget; Direct
Material Usage Budget; Direct Material Purchase Budget; Direct Labour
(Personnel) Budget; Factory Overhead Budget; Production Cost Budget
Q.12. Y Ltd. retains Rs. 7,50,000
out of its current earnings. The expected rate of return to the shareholders,
if they had invested the funds elsewhere is 10%. The brokerage is 3% and the
shareholders come in 30% tax bracket. Calculate the cost of retained earnings
using the equation Kr =
k (1-TP)
(1-B)
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JBIET AUTONOMOUS
MBA SECOND
INTERNAL EXAM THIRD SEMESTER
COST AND
MANAGEMENT ACCOUNTING PAPER
SET
3
q.13. A hospital is considering to
purchase a diagnostic machine costing Rs. 80,000. The projected life of the
machine is 8 years and has an expected salvage value of Rs. 6,000 at the end of
8 years. The annual operating cost of
the machine is Rs. 7,500. It is expected to generate revenues of Rs. 40,000 per year for eight
years. Presently, the hospital is outsourcing the diagnostic work and is earning commission
income of Rs.12,000 per annum; net of taxes.
Required:
Whether it would be profitable for
the hospital to purchase the machine? Give your
Recommendation under:
(i) Net Present Value method; (ii)
Profitability Index method.
PV factors at 10% are given below:
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7 Year8
0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467
Q.14.
Write a detailed note on standard costing and its use in business.
Q.15.
Write a detailed note on job costing and its use in business.
Q.16. Write a detailed note on
various types of costs and their calculation methodology as well as their use
in business.
Q. 17. Write a detailed
note on process costing and its use in business.
Q. 18. Write a detailed note on
the role of cost and management accounting in business in today’s globalised
scenario.
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