(8 pages) Reg. No. :... Sub. Code : C 41 K/CCA 41 M.Com. (CBCS) DEGREE EXAMINATION, APRIL 2015. Fourth Semester Commerce/Commerce with Computer Application ADVANCED COST ACCOUNTING (For those who joined in July 2008-2011) Time : Three hours Maximum : 75 marks PART A (10 1 = 10 marks) Answer ALL questions 1. What is job costing? 2. Define operating costing? 3. What is control account? 4. What is an integrated accounting? 5. What is Byproduct? 6. What is abnormal gain?
7. What is margin of safety? 8. What is marginal cost? 9. What is Budgetary control? 10. What is sales variance? PART B (5 5 = 25 marks) Answer ALL questions, choosing either (a) or (b). Each answer should not exceed 250 words. 11. (a) Explain the uses of Batch costing. (b) A contractor has to supply 10,000 paper cones per day, for 320 days in a year. He finds that when he starts production he can produce 20,000 units a day. The cost of holding a paper cone for one year is 2 paise and the setup cost of a production run is Rs.20. How frequently should production run be made? 12. (a) Write a note on non - integrated accounting. (b) State the importance of cost ledger accounting. Page 2
13. (a) What are the features of process costing? (b) Srikar &co., produces a product through two process p and k. Prepare the process accounts from the following details relating to March 2006: Process J Process K Rs. Rs. Material 45,000 15,000 Labour 60,000 25,000 Chargeable expenses 5,000 10,000 Overheads amounting to Rs. 17,000 are to be apportioned on the basis of labour. 14. (a) State the limitations of break even analysis. (b) From the following particular find out the selling price per unit if BEP is to brought down to 4,000 units. Variable cost per unit - Rs. 60 Fixed Expenses - Rs. 2,00,000 Selling price per unit - Rs. 100 15. (a) Write down the preliminaries to the establishment of standard cost. (b) Calculate the material mix variance from the following: Material Standard Actual A 90 units at Rs.12 each 100 units at Rs.12 each B 60 units at Rs.l5 each 50 units at Rs.16 each Page 3
PART C (5 8 = 40 marks) Answer ALL questions choosing either (a) or (b). Each answer should exceed 600 words. 16. (a) The costing records of a factory give the following information concerning a job. Number 370 Material used Rs.5,000 Direct Wages; Depts. X 10 hours at Rs.25 per hour Depts. Y 8 hours at Rs.30 per hour Depts. Z 5 hours at Rs.40 per hour. The estimated variable overheads for these departments are as follows : Dept. X Rs.70,000 for 7000 labour hours Dept. Y Rs.60,000 for 3000 labour hours Dept. Z Rs.40,000 for 7000 labour hour The estimated fixed overhead are Rs. 3,00,000 for 7,500 normal working hours. Provide for profit of 33 1/3% on the total cost. Prepare a cost sheet to know the selling price. Page 4 [P.T.O.]
(b) The union transport company has been given a twenty km long route to ply a bus. The bus costs the company Rs.1,00,000. It has been insured at 3% per annum. The annual road tax amounts to Rs.2,000. Garage rent is Rs.400 per month. Annual repair is estimated to cost Rs.2360 and the bus is likely to last for five years. The salary of the driver and the conductor is Rs.600 and Rs.200 per month respectively in addition to 10% of takings as commission to be shared equally by them. The manager s salary is Rs.1400 per month and stationary will cost Rs.l00 per month. Petrol and oil will cost Rs.50 per 100 kms. The bus will make three round trips per day, carrying on an average 40 passengers in each trip. Assuming 15% profit on taking and that the bus will ply on an average 25 days in a month, Prepare operating cost statement on a full year basis and also calculate the bus fare to be charged to each passenger per km. 17. (a) Point out the merits and demerits of Integrated accounting system. (b) What are the principles involved in Integrated accounting system. Page 5
18. (a) A product passes through two processes and then to finished stock. The normal wastage of each process is as follows : Process A 3% and Process B 5%. The wastage of process A was sold @Rs.5 per unit and that of process B at Rs. 10 per unit Rs. 20,000 units were introduced into process. A at the beginning of January 1998 at a cost at Rs.40 per unit. Other expenses were as under : Process A Process B Sundry materials 40,000 60,000 Wages 2,00,000 3,20,000 Manufacturing expenses 30,000 28,500 The output of process A was 19,000 units and that of process B 18,200 units. Prepare the Process Accounts, Normal loss Account, Abnormal loss Account and Abnormal Gain Account. (b) Examine the various methods of apportionment of joint costs. Page 6
19. (a) What are the merits and demerits of Break even analysis? (b) The following particulars are obtained from the records of a company manufacturing two products P and R. Per unit Product P (Rs.) Product R (Rs.) Selling price 200 400 Material cost(rs.20 per kg) 40 100 Direct wages(rs.6per kg) 60 120 Variable overhead 20 40 Total fixed overhead is Rs. 10,000. Common on profitability of each product when production capacity in hours is the limiting factor. 20. (a) The Standard material cost for 100kg. of chemical D is made up of : Chemical A - 30 kg @ Rs.4 per kg Chemical B - 40 kg @ Rs.5 per kg Chemical C - 80 kg @ Rs.6 per kg In a batch 500 kg chemical D were produced from a mix of: Chemical A - 140 kg.at a cost of Rs.588 Chemical B - 220 kg.at a cost of Rs.1,056 Chemical C - 440 kg.at a cost of Rs.2860 Page 7
(b) How do the yield,mix and the price factors contribute to the variance in the actual cost per 100 kg of chemical D over the standard cost? The information regarding the composition and hourly wage rates of labour force engaged on a job scheduled to be completed in 30 hours are follows: Standard Actual No.of Worker Hourly wage rate per worker No.of Worker Hourly wage rate per worker Skilled 75 6 70 7 Semi-skilled 45 4 30 5 Un-skilled 60 3 80 2 The work was completed in 32 hours. Calculate (i) Labour cost variance (ii) Labour rate variance (iii) Labour efficiency variance (iv) Labour mix variance (v) Labour sub-efficiency variance. Page 8