Guru Gobind Singh Indraprastha Vishwavidyalaya 2010 B.B.A Cost Accounting - Question Paper

(Please write your Exam Roll No.)    Exam Roll No.

End Term Examination

Second Semester |BBA/(B&1)(TTM)Mom| May-2010

Paper Code: BBA/ (B&I)/(TTM) 110 Paper ID: 17/18/50110 Subject: Cost Accounting j Time: 3 Hours Maximum Marks: 75

| Note: Answer any five questions. AU questions carry equal marks. Simple calculator is allowed.

Ques. 1(a) Define the term Cost and Cost Accounting. Explain the objectives of Cost Accounting.

(b) Distinguish between job costing and process costing.

(8+7)

Ques. 2(a) What is re-order level? What are the factors affecting re-order level?

(b)Tlie following transactions took place in respect of a material item:

Prepare a store ledger sheet using:

(i)    LIFO method

(ii)    Weighted average method.

(7+8)

Ques. 3(a) Differentiate between :

(i)    Cost apportionment and Cost absorption.

(ii)     -Actual and Pre-determined overhead rate of absorption. -

(b) X Ltd. Has received an enquiry for the supply of 1000 Premium shirts. The costs are estimated as under :

Raw Materials Direct Wages Variable Overheads; Selling and Distribution Fixed Overheads: (a) (b) (c) (d) (e) (0

2,500 Mtrs @ Rs. 40 per meter 10,000 Hrs @ Rs. 4 per meter Factory    Rs. 2.40 per labour hour Rs. 16,000 Factory Selling and Distribution Rs. 14,000 Prepare a Cost Sheet showing the price to be quoted per shirt which results in a profit of 20% on selling price.    (6+9) Rs. 6,000

---

Ques. 4 A company has three Production Departments A, B, C and two Service departments X and Y. The following information is available regarding various expenses:

Power Rs. 2,400 Depreciation Rs. 20,000 Rent Rs. 4,200 Personal Department Rs. 4,000 Canteen Rs 3,000 Maintenance of assets Rs. 2,400 Insurance Rs. 2,200

The following additional information is also given:

Item Production Department Service Department

A B C X Y Area (sq. meters) 400 400 300 200 100 Kilowatt hours 2,000 2,200 800 750 250 Numbers of workers 90 120 30 40 20 Capital value of assets Rs.50 Rs. 60 Rs. 40 Rs.30 Rs.20 (in 000) Direct material cost Rs.5,000 Rs.3,000 Rs.2,000 Rs. 1000 Rs. 1,000

The expenses of department X and Y will be apportioned among production departments in the ratio of 5 : 3 : 2 and 20%, 30%, and 50% respectively. Calculate overhead absorption rates of production department A, B and C as percentage of direct material cost    (15)

Ques. 5(a) The output of Process X was 5,000 units. Normal loss allowed was 10% of input. Abnormal loss was 400 units. The following further information is avalable:

Material @ Rs. 5 per unit Labour    Rs. 8,000

Overheads    Rs. 6,700    '

Wastage realized Rs. 2.50 per unit Prepare Process X account and Abnormal Loss account.

(b)The following was the expenditure on the contract for Rs. 6,00,000. Work commenced on I^s' January, 2009:

Materials    Rs. 1,30,000

Wages    Rs. 1,44,000

Plant    Rs. 20,000

Other expenses    Rs. 18,600

Cash received on account was Rs. 2,40,000, being 80% of work certified. Value of materials on hand at 31^st December, 2009 was Rs. 10,000. Plant is to be depreciated @ 10%. Prepare the Contract Account for 2009, showing the profit to be credited to Profit and Loss Account.

(7+8)

Ques. 6 Union transport Company supplies the following details in respect of a truck of 5 tonnes capacity:

Cost of truck    Rs. 90,000

Estimated life    10 years

Diesel, oil    Rs. 15 per trip each way

Repairs and maintenance    Rs. 500 per month

Cleaners wages    Rs. 250 per month

Drivers wages    Rs 500 per month

Insurance    Rs. 4,800 per year

Tax    Rs. 2,400 per year

General supervision charges    Rs. 4, 800 per year

The truck carries goods to and from city covering a distance of 50 miles each

way. While going to the city, freight is available to the extent of full capacity and

on return 20% of capacity.

Assuming that the truck runs on an average 25 days a mouth,

Find out operating cost per tonne mile.

   (15)

Ques. 7(a) A company earned a profit of Rs. 30,000 during the year 2009-10.

If the marginal cost and selling price of a product are Rs. 8 and Rs.10 per unit respectively, find out the amount of margin of safety.

(b) If margin of safety is Rs. 2,40,000 ( 40% of sales) and P/V ratio is 30% of XY Ltd., calculate:

(i)    Break-even Point,

(ii)    Amount of profit on sales of Rs. 9,00,000

(7+8)

Ques. 8 (a) Explain the reasons for difference between profit shown by financial and cost accounts.

(b) A company purchases 20,000 components per annum from an outside supplier at Rs. 5 each. The management feels that these be manufactured and not purchased. A machine costing Rs. 50,000 will be required to manufacture the item within the factory. The machine has an annual capacity of 30,000 units and life of 5 years.

The following additional information is available:

Material cost per unit will be Rs. 2 Labour cost Re. 1

Variable overhead 100% of labour cost Give your advice to the company whether:

(i)    The company should continue to purchase the units from outside supplier or should make them in the factory and

(ii)    The company should accept an order to supply 5,000 units to the market at a selling price of Rs. 4.50 per unit.

************

Attachment: guru-gobind-singh-indraprastha-vishwavidyalaya-2010-b-b-a-37458-1.pdf

Earning:   Approval pending.