II MBA– I Sem - I MID Examinations (2014-16 Batch)
OCTOBER-2015
Cost and
Management Accounting
Max. Marks: 40 Time:
2 Hours
Note: Answer Part: A & B questions
in Main Answer Booklet only.
Part-A : Compulsory.
Part-B : Answer any three questions out
of five questions.
All questions carry equal Marks.
PART-A
1.
The term cost Accountancy includes costing and
(a) Cost Control (b) Cost Accounting (c) Cost fixing (d) Cost Reduction
2. Factory Cost is Prime Cost Plus
(a) Direct Materials (b) Factory Overheads (c) Fixed Cost (d) Works cost
3. A purchase Requisition is a request made to the
(a) Store keeper (b) Purchase Department (c) Supplier (d) Customer
4. A high labour turnover is indicative of
(a) high productivity (b) good Personal Management (c) Higher cost of production (d) Efficiency training.
II Fill in the blanks
5. Job Card is a document used for ............
6. Over head is the total of costs..............
7. The aggregate of all direct cost is costs..............
8. Cost of material consumed is calculated by using the formula……………………
III State whether the following are "True" or "False"
9. Fixed Cost and Period Cost are the same
10. Bill of material is the invoice of materials purchased.
11. Taylor's Differential Price-rate method encourages less efficient workers.
12. One of the reasons for preparing Reconciliation statement is to identify under absorption of overheads.
IV Match the following.
13. Bin Card (a) Production is hampered
14. Cost Unit (b) When to order
15. Under stocking of materials (c) How much to order
16. EOQ (d) Perpassenger Kilometre
(e) Quantity of materials in stock.
(f) Production is normal
Section B
V Answer any three questions.
17. What are the functions of cost Accounting?
18. Give the classification of Overhead?
19. What is a Cost Centre?
20. Explain Two Bin Systems.
21. What is Danger Level?
22. Give the formula for calculating Labour Turnover.
23. Explain the meaning of 'apportinment'.
24. What is work-in-progress?
(a) Cost Control (b) Cost Accounting (c) Cost fixing (d) Cost Reduction
2. Factory Cost is Prime Cost Plus
(a) Direct Materials (b) Factory Overheads (c) Fixed Cost (d) Works cost
3. A purchase Requisition is a request made to the
(a) Store keeper (b) Purchase Department (c) Supplier (d) Customer
4. A high labour turnover is indicative of
(a) high productivity (b) good Personal Management (c) Higher cost of production (d) Efficiency training.
II Fill in the blanks
5. Job Card is a document used for ............
6. Over head is the total of costs..............
7. The aggregate of all direct cost is costs..............
8. Cost of material consumed is calculated by using the formula……………………
III State whether the following are "True" or "False"
9. Fixed Cost and Period Cost are the same
10. Bill of material is the invoice of materials purchased.
11. Taylor's Differential Price-rate method encourages less efficient workers.
12. One of the reasons for preparing Reconciliation statement is to identify under absorption of overheads.
IV Match the following.
13. Bin Card (a) Production is hampered
14. Cost Unit (b) When to order
15. Under stocking of materials (c) How much to order
16. EOQ (d) Perpassenger Kilometre
(e) Quantity of materials in stock.
(f) Production is normal
Section B
V Answer any three questions.
17. What are the functions of cost Accounting?
18. Give the classification of Overhead?
19. What is a Cost Centre?
20. Explain Two Bin Systems.
21. What is Danger Level?
22. Give the formula for calculating Labour Turnover.
23. Explain the meaning of 'apportinment'.
24. What is work-in-progress?
2.
Problem on material:
Aditya ltd produces a product EXE
using a ramw material DEEE using a ramw material DEE. To produce one unit of
EXE , 2 kg OF dee required. As per the sales forecast conducted by the company,
it will be able to sell ten thousand units of EXE in the coming year. The
following is the information regarding the raw material DEE:
The reorder level quantity is 200
kg less than the EOQ
Maximum consumption per day is 20
kg more than the average consumption per day
There is an opening stock of 1000
kg.
Time required to get the raw
materials from the suppliers is 4 to 8 days.
The purchase price is 125 per kg.
There is an opening stock of 900
units of the finished product EXE.
The rate of interest charged by
the bank on CC facility is 13.76%
To place an order company has to
incur 720 on paper and documentation work. From the above information find out
the following in relation to the raw material DEE
A.
REORDER QUANTITY
B.
B.MAXIMUM STOCK LEVEL
C.
MINIMUM STOCK LEVEL
D.
CALCULATE THE IMPACT ON THE PROFITABILITY OF THE
COMPANY BY NOT ORDERING THE EOQ. [ ASSUME 364 DAYS FOR A YEAR]
3.
Problem on labour:
Corrs consultancy ltd is engaged in BPO
industry. One of its trainee executives in the personnel department has calculated
labour turnover rate 24.92% for the last year using flux method.
Following is some data provided by the
personnel department for the last year :
|
Employees
|
At the beginning
|
Joined
|
Left
|
At the end
|
|
Data processors
|
540
|
1080
|
60
|
1560
|
|
Payroll processors
|
?
|
20
|
60
|
40
|
|
Supervisors
|
?
|
60
|
----
|
?
|
|
Voice agents
|
?
|
20
|
20
|
?
|
|
Asst managers
|
?
|
20
|
---
|
30
|
|
Senior voice agents
|
4
|
---
|
---
|
12
|
|
Senior data processors
|
8
|
---
|
---
|
34
|
|
Team leaders
|
?
|
---
|
---
|
?
|
|
Employees transferred from subsidiary
co
|
|
|
|
|
|
Senior voice agents
|
---
|
8
|
---
|
---
|
|
Senior data processors
|
---
|
26
|
---
|
---
|
|
Employees transferred to the subsidiary co
|
|
|
|
|
|
Team leaders
|
---
|
---
|
60
|
--
|
|
Asst managers
|
---
|
---
|
10
|
----
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At
the beginning of the year there were total 772 employees on the payroll of the
co. the opening strength of the supervisors, voice agents and asst managers
were in the ratio of 3:3:2.
The co has decided to abandon the post of
team leaders and consequently all the team leaders were transferred to the
subsidiary co.
The company and its subsidiary are
maintaining separate set of books of account and separate personnel department.
You are required to calculate:
a)
Labour turnover rate using replacement method and
separation method
b)
Verify the labor turnover rate calculated under
flux method by the traineed executive of the corrs consultancy ltd.
4.problem on overheads:
The union ltd has the following
account balances and distribution of direct charges on 31st march
2014.
|
Allocated Overheads
|
Total
|
Production departments
|
Service departments
|
||
|
|
Machine shop
|
Packing
|
General plant
|
stores
|
|
|
Indirect labor
|
29000
|
8000
|
6000
|
4000
|
11000
|
|
Maintenance material
|
9900
|
3400
|
1600
|
2100
|
2800
|
|
Misc supplies
|
5900
|
1500
|
2900
|
900
|
600
|
|
Supervisors salary
|
16000
|
--
|
---
|
16000
|
--
|
|
Cost & payroll salary
|
80000
|
---
|
---
|
80000
|
---
|
|
|
|
|
|
|
|
Overheads to be apportioned :
Power 78000
Rent 72000
Fuel and heat 60000
Insurance 12000
Taxes 8400
Depreciation 120000
The following data were complied by
way of factory survey during the previous year
|
|
Floor space
|
Radiator section
|
No of employees
|
Investment
|
HP hours
|
|
Machine shop
|
2000 sft
|
45
|
20
|
800000
|
3500
|
|
Packing
|
800 sft
|
90
|
12
|
240000
|
500
|
|
General plant
|
400 sft
|
30
|
4
|
80000
|
-
|
|
Stores and maintenance
|
1600 sft
|
60
|
8
|
160000
|
1000
|
Expenses charged to the stores
departments are to be distributed to the other departments by the following
percentages
Machine shop 50%; packing 20%; general plant 30%.
General plant overheads is
distributed on the basis of no of employees
a.
Prepare an overhead distribution statement with
supporting schedules to show computations and basis of distribution.
b.
Determine the service dept distribution by
simultaneous equation method.
4.
Non integrated accounting problem:
The financial books of a company
reveal the following data for the year ended 31st march 2014
|
|
Rs.
|
|
Opening stock :
|
|
|
Finished goods 875 units
|
76525
|
|
Work in process
|
33000
|
|
1.4.2013 to 31.3.2014
|
|
|
Raw material consumed
|
784000
|
|
Direct labour
|
465000
|
|
Factory overheads
|
265000
|
|
Good will written off
|
95000
|
|
Administration overheads
|
315000
|
|
Interest paid
|
72000
|
|
Bad debts
|
21000
|
|
Selling and distribution overheads
|
65000
|
|
Interest received
|
18500
|
|
Rent received
|
72000
|
|
Sales 14500 units
|
2080000
|
|
Closing stock: finished goods 375 units
|
43250
|
|
Work in process
|
48200
|
|
|
|
The cost records provide as under:
Factory overheads are absorbed at
60% of direct wages.
Administration overheads are
recovered at 20% of factory cost.
Selling and distribution overheads
are charged at Rs. 5 per unit sold.
Opening stock of finished goods is
valued at Rs. 105 per unit.
The company values work in process
at factory cost for both financial and cost profit reporting.
Required;
Prepare statements for the year
ended 31.3.2014 show – the profit as per financial records and as per costing
records.
Present a statement reconciling
the profit as per costing records with the profit as per financial records.
5.
Problem on contract costing:
Dream house pvt ltd, is engaged in
building two residential housing projects in the city, particulars related to
two housing projects are as below:
|
|
HP 1
Rs.
|
HP 2 Rs.
|
|
WORK IN PROGRESS ON 1.4.2013
|
780000
|
280000
|
|
Materials purchased
|
620000
|
810000
|
|
Land purchased near to site to open office
|
-
|
1200000
|
|
Brokerage and registration fee paid on the above purchase
|
-
|
60000
|
|
Closing material at site
|
47000
|
52000
|
|
Material purchased
|
620000
|
810000
|
|
Wages
|
85000+12000
|
62000+8400
|
|
Value of work certified
|
2050000
|
1610000
|
|
Cost of work not certified
|
190000
|
140000
|
|
Donation to local club
|
5000
|
2500
|
|
Plant hire charges (72000*1/3)
(57000*1/3)
|
24000
|
19000
|
|
Depreciation on concrete mixture
|
(820000*.15*180/365)= 60658
|
(820000*.15*100/365)= 33699
|
|
|
|
|
|
|
|
|
Prepare contract account and
arrive at costing P&L a/c; costing P&L reserve a/c, out of notional
profit as balancing figure.
6.
A ltd is engaged in production of sugar. While
producing sugar molasses is also produced. Molasses is identified as a by
product of sugar. Suggest the treatment of molasses in the cost accounts of A
ltd.
7.
A ltd produces product ZEE in batches,
management of Z ltd, wants to know the number of batches of product ZEE to be
produced where the cost incurred on batch setup and carrying cost of production
is at optimum level.
8.
Steel heart pvt ltd manufactures TMT bars from
MS INGOTS AND MS BILLETS. After production of TMT bars, sorting is carried out
to find any defects or units that do not match with standard specs. The
products which do not match with the standard product specs are treated as
scrap. You are required to state the treatment of products with the product
specs in cost accounts.
9.
What is cost plus contract? State its
advantages.
10.
A minibus, having a capacity of 32 passengers, operates
between two places A and B. the distance between the place A and B is 30 km.
the bus makes 10 round trips in a day for 25 days in a month. On an average,
the occupancy ratio is 70% and is expected throughout the year.
The details of other expenses are
as under:
|
Insurance
|
15600 pa
|
|
Garage rent
|
2400 per quarter
|
|
Road tax
|
5000 pa
|
|
Repairs
|
4800 per qtr
|
|
Salary of operating staff
|
7200 pm
|
|
Tyres and tubes
|
3600 per qtr
|
|
Diesel one liter consumed for every 5 km
|
13 per liter
|
|
Iol and sundries
|
22 per 100 km run
|
|
Depreciation
|
68000 pa
|
|
Passenger tax @22% on total taking is to be levied and bus operator
requires a profit of 25% on total taking
|
|
|
Prepare operating cost statement on the annual basis and find out the
cost per passenger kilometer and one way fare per passenger.
|
|
