B.Com-B.COM 4th Sem COST ACCOUNTING(Bangalore University, Bangalore-2006)

IV SEMESTER B.COM EXAMINATION,MAY/JUNE 2006
COST ACCOUNTING

SECTION-A

1. ANSWER ANY TEN OF THE FOLLOWING .EACH CARRIES 2 MARKS(10*2=20)
a)Distinguish time study from motion study
b)Define costing
c)What are `Notational Expenses`?Give example
d)What is lead time?
e)Mention any four Non-Monetary incentives
f)Give the meaning of semi-variable cost.Give an example
g)Distinguish between works on cost and works cost?
h)What is Marit Rating?
i)How do you treat work-in-progress in cost sheet?
j)How will you apportion the following expenses among various departments?
i)Depreciation
ii)Rent
iii)Repairs
iv)Supervision
k)Write any four items which appear only in financial accounts
l)Find out the EOQ from the following
Annual usage 6,000 units,cost of material per unit Rs.20,cost of placing and receiving one order Rs.60,annual carrying cost of one unit 10% of inventory value

SECTION-B

ANSWER ANY FIVE OF THE FOLLOWING .EACH CARRIES 5 MARKS(5*5=25)

2What is a cost sheet?What are its advantages?

3.Briefly explain the various techniques of inventory control

4.Explain the following methods of wage payment:
a)Taylor`s differential piece rate system
b)Merrick`s multiple piece rate system

5.What is Reconciliation Statement?List the reasons for the difference between
profit shown by cost and financial accounts

6.A Modern Spares supplies you the following figures for the year 2001:
Production 1,000 units
Cost of materials Rs.20,000
Labour Cost Rs. 12,000
Factory overhead Rs.8,000
Office overhead Rs. 4,000
Selling expenses Rs.1,000
Rate of profit 25% on selling price
The manufacturer decides to produce 1,500 units during the year 2002.It is
estimated that cost of raw material will increase by 20%,labour cost will
increase by 10%,50% of overhead charges are fixed and other 50% of the
overhead charges are variables .The selling expenses per unit will be
reduced by 20%.The rate of profit will remain the same.Prepare a statement
for 2002 showing i) Total profit and ii) Selling price per unit.

7.Calculate a)Re-order level b)Re-order quantity and c)Maximum stock level
Minimum stock level:2,550 units
Average stock level:4,550 units
Consumption:Minimum 800 units per month
Maximum 15000 units per month
Delivery period:Minimum 2 months
Maximum 4 months

8.From the following information ,prepare Stores Ledger Account under Simple
average method

Jan 2005,1 Received 500 units at Rs. 20 per unit
" 10 Recieved 300 units at Rs. 24 per unit
" 15 Issued 700 units
" 20 Recieved 400 units at Rs.28 per unit
" 25 Issued 300 units
" 28 Recieved 500 units at Rs. 22 per unit
" 31 Issued 200 units

9.Compute the machine hour rate from the following data
Cost of the Machine Rs. 2,00,000
Installation charges Rs. 20,000
Estimated scrap value after the expiry of its life of 15 years Rs. 10,000
Rent for the shop per month Rs. 400
General lighting for the shop per month Rs. 600
Insurance premium for the machine p.a. Rs. 1,920
Repair expenses p.a. Rs. 2,000
Power 10 units per hour
Rate of power per 100 units Rs.40
Estimate working hours p.a. 2,000
SHop Supervisor`s salary per month Rs. 1,200
The machine occupies 1/4 th of the total are of the shop.THe supervisor devotes
1/3 rd of his time for this machine

SECTION-C

ANSWER ANY THREE QUESTIONS.EACH CARRIES 15 MARKS(3*15=45)

10.On March 2004 ther are 1,500 units of materials at Rs.12 per unit in stock.The
following transaction were made during the month.Prepare Store Ledger
Account fy FIFO and LIFO methods
March 2 Issued 200 units
" 4 Purchased 1,000 units at Rs. 15 per unit
" 8 Issued 1,200 units
" 12 Purchased 600 units at Rs. 20 per unit
" 15 Issued 650 units
" 20 Returned to stores from issued of March 2,100 units
" 24 Purchased 300 units at Rs. 25 per unit
" 28 Issued 250 units
" 30 Issued 300 units

11.Following are the particulars for the production of 2,000 sewing machines of
Bhararth Engineering Co.Ltd. for the year 2004

Cost of materials Rs. 1,60,000, wages Rs. 2,40,000, Manufacturing expenses
Rs. 1,00,000, office salaries Rs. 1,20,000, office rent ,rate and insurance
Rs. 20,000, General expenses Rs. 40,000, selling expenses Rs. 60,000 and Sales
Rs. 8,00,000
The company plans to manufacture 3,000 sewing machines during 2005.You
are required to submit a statement showing the price at which machines would be
sold so as to show a profit of 10% on selling price .The following additionnal
information is supplied to you:
i)Price of material is expected to rise by 20%
ii)Wage rate are expected to show an increase of 5%
iii)Manufacturing expenses will rise in proportion to the combined cost of
material and wages
iv)Selling expenses per unit will remain the same
v)Other expenses will remain unaffected by the rise in output


12.The following particulars relate to a manifacturing company which has
3 production departments A,B and C ant two service departments X and Y
PRODUCTION DEPTS. SERVICE DEPT.
A B C X Y
Rs. Rs. Rs. Rs. Rs.
Total departmental
overhead as per primary
distribution 6,300 7,400 2,800 4,500 2,000

The company decided to charge the Service dept. cost on the basis of the
following percentages:
A B C X Y
X 40% 30% 20% - 10%
Y 30% 30% 20% 20% -
FInd out the total overhead of production dept. charging service dept. cost to
production depts. by Simultaneous Equation method

13.FRom the following figures,prepare a Reconciliation statement

Net profit as per Financial accounts Rs.1,13,000.Net profit as per cost accounts Rs 2,00,000 ,income tax provided in financial accounts Rs. 60,000, share transfer
fees credited in financial accounts Rs. 4,000
Overheads as per cost accounts were estimated at Rs.34,000 whereas Rs. 28,000
were charged in financial accounts

Company provided Rs. 20,000 for doubtful depts. Directors fees shown in
financial accounts Rs. 8,000 .Depreciation charged in financial accounts
Rs. 7000.Value of closing stock inm cost accounts Rs. 18,750.Value of colosing
stock in financial accounts Rs. 20,750,interest on investment not included in
cost accounts Rs 4,000
Good will written off in financial accounts Rs. 9,000.Stores adjustments credited
in Financial accounts Rs. 1,000

14 a)a workman`s wage for a guaranteed 48 hour week is Rs. 25 per hour
Estimates time to produce one article is 20 minutes and under incentives
scheme the time allowed is increased by 80% .during a week the workman
produced 100 articles .Calculate his time wages under i)Time Rate
ii)Piece Rate iii)Halsey Plan iv)Rowan Plan

b)Calculate the earning of the workers under following
i)Taylorr`s Plan ii)Merrick`s Plan
Time rate Rs. 3 per hour,standard output per hour 6 units
Differential rate are:
1)Low piece rate at 80% of normal piece rate
2)High piece rate at 120% of normal piece rate
in a day of 8 hours ,A produced 39 units,B 45 units,C 48 units and D 50 units