Q5/1E/04-15 Reg. No

St. Joseph’s College of Arts & Science (Autonomous) St. Joseph’s College Road, Cuddalore – 607001 BM512 - COST ACCOUNTING

Time : 3 hrs

Max Marks :75 SECTION – A (10X2=20) Answer ALL Questions

1.

What are the objectives of Cost Accounting?

2.

What do you mean by Process Costing?

3.

How do you understand the term Direct Materials Cost.

4.

Specify the purpose of preparing the Tenders or Quotations.

5.

Mention the suitable time to use FIFO Method and why?

6.

Explain Perpetual Inventory System of controlling inventory.

7.

How do you classify the Over Heads into different heads according to behaviour wise?

8.

Write the bases of apportionment for the following items a) Labour Welfare expenses b) Electricity c) Indirect Wages d) Repair to Plant

9.

What are the advantages of Marginal Costing?

10. Illustrate the term ‘Margin of Safety’? SECTION - B (5X5=25) Answer any FIVE Questions 11. What are the differences between Financial Accounting and Cost Accounting?

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12. Explain the different methods of Absorption of Over Head. 13. From the following particulars, prepare a cost sheet showing the selling price per unit. Raw materials Labour and other direct expenses Factory expenses 40% of the labour.. Office overheads 10% of works cost. Selling and distribution expenses 2 per unit sold. Units produced and sold – 10,000 Percentage of profit – 25% on selling price

1,00,000 50,000

14. Two Materials A and B are used as follows: Normal consumption - 600 units per week each Minimum consumption - 300 units per week each Maximum consumption - 900 units per week each Re- order quantity A 5, 000 units B 3,000 units Re-order period A 2 to 4 weeks B 3 to 6 weeks Calculate (a) Re-order level (b) Minimum level (c) Maximum level 15. The following informations are given for two companies. X Ltd. Y Ltd. Units produced & sold 17,000 17,000 Revenues 1,70,000 1,70,000 Fixed costs 85,000 34,000 Operating income 51,000 51,000 Variable cost 34,000 85,000 Find out the Break-Even point of each company both in units as well as in volume. 16. Calculate Machine Hour Rate from the following: a) Cost of machine 19,200 b) Estimated scrap value 1,200 c) Repair charges per month 150

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d) Standing charges allocation to machine per month 50 e) Effective working life of machine 10,000 hours f) Running time per month 166 hours g) Power used by machine = 5 units per hour at 19 paise per unit. 17. Sales price 20 per unit Variable manufacturing cost 11 per unit Variable selling cost 3 per unit Fixed factory overheads 5,40,000 per year Fixed selling costs 2,52,000 per year Calculate: (a) Breakeven point in volume and value; (b) Sales required to earn a profit of 60,000 (c) Sales required to earn a profit of 10% of sales SECTION – C (3X10=30) Answer any THREE Questions 18. Explain the steps to be taken for the Installation of a Costing System. 19. Draw a stores ledger card recording the following transactions under FIFO method 2008 July 1 Opening stock 200 unit at Re.1 each. 5 Received 100 units at 1.10 each 6 Issued 50 units 10 Received 500 units at 1.20 each 12 Received back 5 units out of the issue made on 6th July 14 Issued 60 units 18 Returned to supplier 10 units of goods received on 5th 19 Received back 10 units out of the issue made on 14th July 20 Issued 15 units 25 Received 50 units at 1.40 each

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The stock verification report reveals that there was a shortage of 3 units on 18th July and another shortage of 5 units on 26th July. 20. Calculate the overheads allocable to production departments A and B. There are also two service departments X and Y. X renders service worth 12, 000 to ‘Y’ and the balance to A and B as 3: 2.Y renders service to A and B as 9: 1 Particulars Floor space (Sq.ft.) Assets (Rs.In lakhs) H.P. of Machines No. of workers Lights and fan points

A 5,000 10 1,000 10 50

B 4,000 5 500 50 30

X 1,000 3 400 50 20

Expenses and charges are: Depreciation 1,90,000 Power Rates & taxes 36,000 Canteen expenses Insurance 15,200 Electricity

Y 2,000 1 100 25 20 20,000 10,800 4,800

21. Assuming that the cost structure and selling prices remain the same in periods I and II find out: i. P / V ratio ii. B. E. Sales iii. Profit when sales are

5,00,000

iv. Sales required to earn a profit of v. Margin of safety in IInd period Period Sales I II

2,40,000 2,80,000

40,000

Profit 18,000 26,000

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22. From the following data related to a manufacturing unit for the year ended 31st December 2012. Particulars Raw materials consumed Direct wages Factory overhead Office overhead

1,50,000 1,20,000 24,000 17,640

Prepare cost of the machines and calculate the price which the company should quote for the manufacture of a machine requiring materials valued 1,250 and expenditure in productive wages of 750,so that the price may yield a profit of 20% on selling price

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