University of Delhi 2005-3rd Year B.Com Costing External Year : Part I - Question Paper

Q. I. discuss briefly the following:
(i) Cost centre;
(ii) Normal loss;
(iii) Breii’.-even analysis;
(iv) Piece rate system of payment

Q. 2. Distinguish ranging from :
(a) Perpetual and Periodic Inventory System;
(b) Normal and Abnormal Idle Time.
© Cost Allocation and Cost Apportionment;
(d) Marginal Contribution and Profit.

Q. 3. (a) For the coming year, a manufacturing company has budgeted as under:
Contribution/Sales (C/S) Ratio = 45%
Margin of Safety Ratio = 33?%
Fixed Costs = Rs, 5,85,000
Required: Determine Total Sales-volume for the coming year and Profit thereon. 10
(b) Ayush Ltd. produces a Herbal Shampoo which is made by subjecting certain crude herbs to 2 successive processes: A and B, The subsequent data in respect of processing have been found from the accounting records of the company for a cost period:
Particulars - Process A - Process B
Inputs (units) - 50,0.00 - 46,000
Normal loss - 10% - ?
Costs Incurred: - Rs. - Rs.
Materials (Herbs) - 9,00,000 - 1,96,000
Direct labour - 4,26,000 - 2,47,000
Production overhead - 2,84,000 - 1,78,000
Realisable scrap value/unit - seven - 20
The output of process A is transferred direct to Process B. The output of Process B was 43,200 units, which were sold at Rs. 60 per unit showing a profit of 20% on cost.
You are needed to prepare the Process Cost Accounts assuming that there was no closing stock of W.I.P. and finished goods.

Q. 4. (a) What do you mean by under absorption and over-absorption ofoverheads ? 5
(b) elaborate the advantages of centralised store-keeping ? 5
© From the understated particulars, you are needed to prepare a monthly cost sheet of Soap Manufacturers Ltd. showing therein:
(i) Prime cost;
(ii) Works cost;
(iii) Cost of production;
(iv) Cost of sales; and
(v) Profit per unit.
Rs.-
Opening Inventory (1-1-2004);
Raw materials - 6,000
Work-in-progress - 9,620
Finished goods (1,000 units) - 13,680
Closing Inventory (31-1-2004):
Raw materials - 7,000
Work-in-progress - 8,020
Finished goods - ?
Donations to home for destitutes - 2,100
Raw-materials pruchased - 72,000
Import duty on raw materials purchased - 14,400
Productive wages - 18,000
Machine hours worked - 21,600 hours
Machine hour rate - Rs. 1.50
Chargeable expenses - Rs. 2,000
Office and Administration expenses - Re. one per unit
Selling expenses - Re. 0.90 per unit
Units sold - 8,000 units
Units produced - 8,200 units
Profit on sale - 10%

Q. 5. (a) What is labour turnover ? How is it measured ? 5
(b) A company manufactures 5,000 units of a product per month. Cost of placing an order is Rs. 100. The purchase price of raw material is Rs. 10 per kg. The reorder period is four to eight weeks. The consumption of raw materials varies from 100 kg to 450 kg per week, the avg. consumption being 275 kg, the carrying cost of inventory is 20% per annum.
You are needed to calculate:
(i) Reorder volume
(ii) Reorder level. 5
© A manufacturing company disclosed a net loss of Rs. 3,47,000 as per their cost accounts for the year ended March 31,2004. The financial accounts however disclosed a net loss of Rs. 5,10,000 for the identical period. The subsequent info was revealed as a outcome of scrutiny of the figures of both the sets of accounts :
Rs.
Factory overheads under-absorbed - 40,000
Administration overheads over-absorbed - 60,000
Depreciation charged in Financial Accounts - 3,25,000
Depreciation recovered in Cost Accounts - 2,75,000
Interest on investments not included in Cost Accounts - 96,000
Income-tax given - 54,000
Interest on loan funds in Financial Accounts - 2,45,000

Earning:   Approval pending.