DISTRICT RESOURCE CENTRE

MAHBUBNAGAR
PRE-FINAL EXAMINATIONS - JAN / FEB -2011
B.COM III Year Pre-Final Examination Jan/Feb-2011
(Elective-I Paper for Computers, Computers applications (Voc.) and vocational courses )
COST ACCOUNTING (305)
Time:3 Hours Max.Marks:70

PART-A

I. Answer any five questions in not exceeding 20 lines. 5 x 4 =20 Marks

1. What is the scope of cost accountancy?

2. Calculate E.O.Q from the following:

(a) Annual consumption:500 units

(b) Ordering costs Rs.5 per order
(c) Carrying cost Rs.2
(d) Price per unit Rs.20

3. For product A, the prime cost is Rs.20 per unit , factory overheads are 20% of prime cost.
Administration overheads are 25% of works cost. Profit is 25% on selling price. Calculate
selling price.

4. Profit Rs.200; sales Rs.2000; variable cost 75% of sales.

(a) Find out break even sales.
b) What would be the sales volume to earn a profit of Rs.500.

5. The following particulars are regarding the standard and actual production of product x

Standard quantity of material per unit- 5 kg

Standard price per kg Rs.5
Actual no. of units produced -400
Actual quantity of material used -2200kg
Price of material paid – Rs.4.80 per kg

Calculate (i) material price variance (ii) material usage variance.

6. What is cost plus rate contract?

7. Explain piece rate system

8. Explain (a) BEP (b) p/v Ratio

[P.T.O.]
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PART-B

Answer the following questions in not exceeding 4 pages each: 5x10=50

9. (a) What is cost accounting? Explain objectives and advantages

OR

(b) Explain the difference between the financial accounting and cost
Accounting?

10. (a) From the following particulars, write up priced stores Ledger card according
to Base stock method when it operates in conjunction with (I) FIFO method and (II)
LIFO method. Base stock is 200 tons.

1986 Jan 1st Purchased 500 tons @Rs.2.00 per ton

10th Purchased 300 tons @Rs.2.10 per ton
15th issued 600 tons
20th Purchased 400 tons @Rs.2.20 per ton
th
25 issued 300 tons
27th Purchased 500 tons @Rs.2.10 per ton
st
31 issued 200 tons

OR
(b) From the following particulars relate to manufacturing company which has three
production departments P1, P2, P3 and two service departments S1 and S2.
Departments

P1 P2 P3 S1 S2
Total departments
Overheads as per
Primary distribution 6300 7400 2800 4500 2000

The company decided to charge the service departments costs on the basis of following per-
centages.

Service Departments Production Departments serviceDepartments

P1 P2 P3 S1 S2

S1 40% 30% 20% - 10%

S2 30% 30% 20% 20% -

Find out the total overheads of production departments charging service departments Costs
to production departments on repeated distribution method. Also find out the production
hour rate of recovery of overheads when the estimated working hours of production depart
ments P1,P2,P3 are 10,000; 12,000 and 6000 respectively.
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11. (a) The following information is extracted from the job ledger, in respect of job No. 101.
Materials Rs.3400

Wages:
Departments A : 80 hours at Rs . 2.50 per hour
Departments B : 60 hours at Rs. 4.00 per hour

Variable overheads:
Departments A Rs. 5000 for 4000 direct hours
Departments B Rs. 6000 for 3000 direct hours

Fixed overheads:
Rs.7500 for 10,000 hours of normal working time of the factory. Calculate the cost of Job
No. 101 and estimate the percentage of profit if the price quoted is Rs. 4,750.
OR

(b) Bharat chemicals Ltd. Manufacturing and sell their chemicals produced by consecutive
process:
The products of these processes are dealt with as under.
Process I Process II Process III

Transferred to next
process 66 2/3% 60% -

Transferred to ware-

House for sale 33 1/3% 40% 100%

The following particulars relate to December, 2006

Process I Process II Process III
Raw materials used
In tons 1400 160 1260
Rate per ton Rs.10 Rs.16 Rs. 7
Wages and other

Expenses Rs.5,152, Rs.3,140,Rs.2,898, in each process 4% of the weight

Put is lost and 6% is scrap which from process I related at Rs.3/- per ton, from process II
Rs.5 per ton and from process III Rs.6 per ton.
Prepare process accounts showing cost per ton of each product.

12. (a) From the following data, you are required to calculate the break even point and net
sales value at this point.

Selling price per unit Rs. 25

Direct material cost per unit 8
Direct labour cost per unit 5
Fixed overheads 24,000
Variable overheads @60% on direct labour
Trade discount 4%
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If sales are 15% and 20% above the break even volume, determine the net profits.
OR
(b) You are given the following data the year 2010 of XYZ Co. Ltd.

Rs.
Variable cost 3,00,000
Fixed cost 1,50,000
Net profit 50,000
5,00,000

Find out (i) Breack even point (ii) P/v ratio (iii) margin of safely. Also draw a
break even chart.

13. (a) Computed different labour variances and reconcile the same .

Particulars Standard Actual

Wage rate Rs.16 per unit -

Wage paid - Rs.18,000
Out put 900 units 880 units
Time taken 40 Hours 45 Hours

OR

(b) Calculate overhead variances from the following data:

Standard Actual

Fixed overheads(Rs.) 8000 8500

Variable overheads(Rs.) 12000 11200

Output in units 4000 3800

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