DISTANCE EDUCATION
M.B.A. DEGREE EXAMINATION, MAY 2017.
Second Semester
COST AND MANAGEMENT ACCOUNTING
(Upto 2012-13 Academic Year and 2013 Calendar Year)
Time Three hours Maximum 100 marks
SECTION A — 8 40 marks)
Answer any FIVE questions.
All questions carry equal marks.
1. Define Cost Accounting. State the various objectives of
Cost Accounting.
2. The following information is available for job 4321, which
is benign produced at the request of a customer
Particulars Dept. A Dept. B Dept. C
Material consumed 4,000 1,000 1,500
Direct labour
Wage rate per hour 3 4 5
Direct labour hours 300 200 400
In accordance with company policy the following are
chargeable to jobs
Fixed production overheads Rs. 5 per direct Labour hour
Fixed administration overheads 80% of works cost
Profit mark up 20% margin on selling price.
Sub. Code
25
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WSS
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Required
Calculate the total cost and selling price of job 4321
Assume that sharply after the job is completed the
original customer goes bankrupt and the job is not
delivered. The only other possible customer is prepared to
pay Rs. 9,000. Briefly indicated, with reasons, whether
you would accept the offer of Rs 9,000.
3. A Product passes through three distinct processes to
Completion. These processes are numbered respectively
II and III. During the week ended 15th January 2001, 500
units are produced. The following information is
obtained.
Particular Process I
Rs.
Process II
Rs.
Process III
Rs.
Direct Materials 3,500 1,600 1,500
Direct Labour 2,500 2,000 2,500
The Overhead expenses for the period were Rs. 1,400
apportioned to the processes on the basic of wages.
No work-in-progress or process stocks existed at the
beginning or at the end of the week. Prepare process
Account.
4. The following was the expenditure on a contract for
Rs. 6,00,000 commenced in January 2001. Materials
Rs. 1,20,000; Wages Rs. 1,64,400; Plant Rs. 20,000.
Business Charges Rs. 8,600; Cash received on account to
31st December, 2001 amounted Rs 2,40,000 benign
80 per cent of work certified., the value of materials in
hand on 31.12.2001 was Rs 10,000. Prepare the contract
account for 2001 showing the profit to be credited to the
year's profit and loss account. Plant is to be depreciated
at 10%.
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5. Calculate P/V Ratio from the following information
Given Selling price Rs. 10 per unit. Variable cost
per unit Rs. 6
Given the profits and sales of two periods as under
Sl.No Year Sales
Rs.
Profit
Rs.
1 2000 1,50,000 20,000
2 2001 1,70,000 25,000
6. The Balance sheets of Anu Ltd. at the end of 1993 and
1994 are given below. You are required to prepare a
schedule of changes in working capital.
Liabilities 1993
Rs.
1994
Rs.
Assets 1993
Rs.
1994
Rs.
Share capital 1,00,000 1,50,000 Land 1,00,000 1,00,000
Share premium 5,000 Plant at cost 1,04,000 1,00,000
General reserve 50,000 60,000 Furniture at cost 7,000 9,000
P L a/c 10,000 17,000 Investment at cost 60,000 80,000
Debentures 70,000 50,000 Debtors 30,000 70,000
Provision for
depreciation on Plant 50,000 56,000
Stock
Cash
60,000
30,000
65,000
45,000
Provision for
depreciation on
Furniture 5,000 6,000
Provision for Taxation 20,000 30,000
Creditors 86,000 95,000
3,91,000 4,69,000 3,91,000 4,69,000
7. Discuss about the difference between Funds Flow
Statement and Cash Flow Statements.
8. List out the various objectives of interpretation of
financial statements.
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SECTION B — 15 60 marks)
Answer any FOUR questions.
All questions carry equal marks.
9. What is management Accounting? How it is difference
between Cost Accounting and Management Accounting?
10. In respect of a factory the following figures have been
obtained for the year 2001.
Cost of materials Rs. 6,00,000; Direct Wages Rs. 5,00,000;
Factory Overhead Rs. 3,00,000; Administrative overheads
Rs. 3,36,000; Selling overheads Rs. 2,24,000; Distribution
overheads Rs. 1,40,000 and Profit Rs. 4,20,000.
A work order has been executed in 2002 and the following
expenses have been incurred Materials Rs. 8,000 and
wages Rs. 5,000.
Assuming that in 2002 the rate of factory overheads has
increased by distribution overheads have gone down
by 10% and Selling and Administration overheads have
each gone up by 12.5%, at what price should the product
be sold so as to earn the same rate of profit on the selling
price as in 2001? Factory overhead is based on direct
wages while all other overheads are based on factory cost.
11. Work out in appropriate cost sheet from the unit cost per
passenger Km, for the year 2001-02 for a fleet of
passenger buses run by a Transport Company form the
following figures extracted from its books.
5 passenger buses costing Rs. 50,000, Rs. 1,20,000,
Rs. 45,000, Rs. 55,000 and Rs. 80,000 respectively: Yearly
depreciation of vehicles 20% of the cost. Annual repair,
maintenance and spare parts 80% of depreciation.
Wages of 10 drivers Rs. 100 each per month, wages of
20 cleaners Rs. 50 each per month. Yearly rate of
interest on capital. Rent of six garages Rs. 50
each per month. Director's fees Rs. 400 per month,
office establishment Rs. 1,000 per month, license and
taxes Rs. 1,000 for every six months, realization by sale
of old tyres and tubes Rs. 3,200 for every six months,
900 passengers were carried over 1,600 kms during the
year.
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12. The following figures relate to the trading activities of a
company for the year ended 31.12.1987.
Particulars Rs. Particulars Rs.
Sales 1,00,000 Salary of salesmen 1,800
Purchases 70,000 Advertising 700
Closing stock 14,000 Travelling Expenses 500
Sales return 4,000 Salaries (office) 3,000
Dividend received 1,200 Rent 6,000
Profit on sale of assets 600 Stationery 200
Loss on sale of shares 300 Depreciation 1,000
Opening stock 11,000 Other expenses 2,000
Provision for tax 7,000
You are required to calculate
Gross profit ratio
Operating ratio
Operating profit ratio
Net profit ratio.
13. From the following balance sheets as on 31.12.1993 and
31.12.1992, prepare a cash flow statement
Balance Sheets
Liabilities 1993
Rs.
1992
Rs.
Assets 1993
Rs.
1992
Rs.
Share capital 1,50,000 1,00,000 Fixed assets 1,50,000 1,00,000
Profit Loss A/c 80,000 50,000 Goodwill 40,000 50,000
General reserve 40,000 30,000 Stock 80,000 30,000
Debentures 60,000 50,000 Debtors 80,000 50,000
Creditors
Outstanding
expenses
40,000
15,000
30,000
10,000
Bills
receivable
Bank
20,000
15,000
30,000
10,000
3,85,000 2,70,000 3,85,000 2,70,000
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14. Calculate turn over ratios from the following figures
Items Rupees in lakhs
Sales 17,874
Sales returns 4
Other income 53
Cost of sales 15,440
Admin and selling expenses 1,843
Depreciation 63
Interest expenses [non-operating] 456
Purchases 15,000
Purchases returns 5
Debtors 10,000
Bills receivables 2,000
Creditors 5,000
Bills payable 3,000
Opening stock 4,000
Closing stock 5,000
Fixed assets 5,000
15. You are required to compile a statement showing cost and
profit from the information given
Rs.
Direct material (purchase) 45,000
Direct expenses 55,000
Indirect materials 15,000
Factory rent and rates 10,000
Insurance of factory 25,000
Office rent 14,000
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Rs.
Office salaries 13,000
Legal charges 12,000
Bank Commission 12,500
Salesman's salaries 16,500
Showroom rent 24,000
Advertisement 23,000
Travelling expenses 19,000
Carriage outward 18,000
Profit 15% of sales
The following are balances
Opening direct materials Rs. 27,000
Opening work-in-progress Rs. 43,000
Closing direct materials Rs. 33,300
Closing work-in-progress Rs. 26,000