Madurai Kamraj University (MKU) 2006 M.Com Commerce COST COMPUTATION THEORY AND PRACTICE - Question Paper

MAY 2006 PAPER XII COST calculation THEORY AND PRACTICE
Time: 3 hours Maximum: 100 marks
ans any 3 ques. from part A and any 2 ques. from part B.
part A -(3 x 20 =60 marks)
1. discuss the meaning of cost accounting. elaborate the objectives of cost accounting?
2. What is equivalent production? discuss the procedure for valuation of equivalent production.
3. What is Job costing? elaborate the advantages and disadvantages of Job costing?
4. What is cost apportionment? discuss the methods of reapportionment?
5. elaborate the different methods of Time Booking? discuss briefly.
6. Write short notes on : (a) Bin Card (b) Perpetual Inventory System (c) Cost Ledger Control
System (d) Equivalent Production.
part B -(2 x 20 =40 marks)
7. The product of company passes through 3 distinct processes to completion. They are known
as A, B and C. From past experience it is ascertained that loss is incurred in every process:
Process A -2% ; Process B -5% ; Process C -10%. In every case the percentage of loss is calculated
on the number of units entering the process concerned. The loss of every process possesses a scrap
value. The loss of processes A and B is sold at Rs. five per units and that of process C at Rs. 20 per 100
units. The output of every process passes immediately to the next process and the finished units are
passed from process C into stock.
Process A Process B Process C
Rs. Rs. Rs.
Materials consumed 6,000 4,000 2,000
Direct labour 8,000 6,000 3,000
Manufacturing
Expenses 1,000 1,000 1,500
20,000 units have been issued to Process A at a cost of Rs. 10,000. The output of every process has
been as under: Process A 19,500 ; Process B 18,800 ; Process C 16,000. There is no work-inprogress
in any process. Prepare process accounts. computations should be made to the closest rupee.
8. subsequent transactions took place in Bharat & 'Co. during the month of March 1985 : (a) Raw
Material purchased on credit Rs. 40,000 (b) Direct' Material issued to production Rs. 30,000
(c) Direct Wages paid (30% direct) Rs. 24,000 (d) Manufacturing expenses incurred (Cash) Rs.
16,800 (e) Manufacturing overhead charged to production Rs. 16,000 (f) Selling and distribution
cost (Cash) Rs. 4,000 (g) Finished products at cost Rs. 40,000 (h) Sales Rs. 58,000 (i) Receipts from
Debtor Rs. 13,810 (j) Payments to Creditors Rs. 22,100. You are needed to journalise the above
transactions presuming that integrated system of accounting is followed in Bharat & Co.
9. A company has 4 department of which A, B and C are production and 'D' is a servi:e
department.
The subsequent are the costs of 3 months pertaining to these departments.
Rs,
Rent 1000
Repair 600
Depreciation 400
Light 100
Supervision 1500
Insurance 500
Employee's Insurance
paid by employer 100
Power 900
The subsequent data are also available for 4 Departments.
Area sq. ft. 75 55 45 25 materials.
No. of workers 12 eight 6
Total wages Rs. 4,000 3,000 2,000 1,000 charged.
Value of plant Rs.12,000 9,000 6,000 3,000
Value of stock Rs. 7,500 4,500 3,000
Make the apportionment of the costs of the different departments on the most equitable method.
10. A manufacturer of plastic toys, purchased 2 items of his raw material coded as GM -3 and AR
-5. The invoice gave the subsequent details:
Rs.
GM -3 1,200 kgs (a) Rs. four per kg 4,800
AR -5 600 kgs (a) Rs. six per kg 3,600
8,400
LESS Trade Discount 840
7,560
Insurance, Duty and Octroi 1,680
Packaging 450
Freight 360
Total 10,050
In transit 200 kgs of GM -3 and 100 kgs of AR -5 were spoiled in an accident. The packages could
be sold for Rs. 225. He provides 5% for meeting 10 m due to evaporation which is natural with these
compute the rate at which the problems may be charged.

Earning:   Approval pending.