DISTANCE EDUCATION
B.B.A. (CS)/B.B.A. Lateral DEGREE EXAMINATION,
MAY 2017.
COST ACCOUNTING
(2005 onwards)
Time Three hours Maximum 100 marks
PART A — 8 40 marks)
Answer any FIVE questions.
1. About 50 items are required every day for a machine.
A fixed cost of Rs. 50 per order is incurred for placing an
order. The inventory carrying cost per item amounts to
Re. 0.02 per day. The lead period is 32 days. Compute
Economic Order Quantity
Re-order Level.
2. The cost accountant of Y Ltd. has computed labour
turnover rates for the quarter ended 31st March, 2013 as
and respectively under Flux Method,
Replacement Method and Separation Method. If the
number of workers replaced during the quarter is 30, find
out the number of
Workers recruited and joined and
Workers left and discharged.
Sub. Code
34
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3. Describe the items of expenses that are generally
included in 'Direct Labour Cost'.
4. What are the bases of apportionment of overheads?
5. A product passes through three distinct processes to
completion. These processes are numbered respectively
II and III. During the week ended 15th January 2013,
500 units are produced. The following information is
obtained
Process I Process II Process III
Rs. Rs. 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 basis of wages.
No work-in-progress or process stocks existed at the
beginning or at the end of the week. Prepare Process
Accounts.
6. Calculate variances from the following data
Standard Actual
Number of men employed 100 90
Output in units 5,000 4,800
Number of working days in a month 20 18
Average wages per man per month Rs. 200 Rs. 198
7. What are the advantages for maintaining cost ledger?
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8. Journalise the following transactions in the integrated
books of accounts
Rs.
Credit purchases 12,00,000
Production wages paid 7,00,000
Stores issued to production orders 8,00,000
Workers expenses charged to
production 4,50,000
Finished goods transferred from
production orders 18,00,000
Administration expenses charged
to production 1,50,000
Works expenses outstanding 1,20,000
Works expenses paid 4,60,000
PART B — × 15 60 marks)
Answer any FOUR questions.
9. Tabulate the elements of cost showing various items of
expenditure pertaining to each.
10. Two components A and B are used as follows
Average consumption 40 units
Normal usage 50 units per week each
Minimum usage 25 units per week each
Maximum usage 75 units per week each
Re-order quantity 300 units
500 units
Re-order Period 4 to 6 weeks
2 to 4 weeks
Maximum lead time for emergency
Purchases 1 day
B 2 days
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Calculate for each component
Re-order Level
Minimum Level
Maximum Level
Average stock Level, and
Danger level.
11. From the following particulars you are required to work
out the earnings of a worker for a week under
Straight piece-rate
Differential piece rate
Halsey premium scheme sharing) and
Rowan premium scheme.
Weekly working hours 48
Hourly wage rate Rs. 7.50
Piece rate per unit Rs. 3.00
Normal time taken per
piece
20 minutes
Normal output per week 120 pieces
Actual output for the week 150 pieces
Differential piece rate 80% of piece rate when
output below normal and
120% of piece rate when
output above normal
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12. A manufacturing company has four production
departments and six service departments. From the
following information briefly apportion the service
department's overheads to production departments only.
Production Departments Service Departments
Rs. Rs.
P1 30,000 S1 (Power) 18,000
P2 30,000 S2 (Purchasing Dept.) 15,000
P3 24,000 S3 (Stores Dept.) 12,000
P4 16,000 S4 (Canteen) 9,000
S5 (Labour Welfare) 6,000
S6 (Time Keeping) 4,500
Additional Information
P1 P2 P3 P4
Horse power of machine 600 600 300 300
Value of materials purchased (Rs.in lakhs) 5 4 4 2
Number of stores requisitions 4 3 3 2
Number of workers 18 16 14 12
13. A chemical, Exaletent passes through processes A and B
before completion. In process a by product, Exaletent,
is produced which after further processing in Process
is sold at a profit of 162/3% of selling price. You are
required from the data given for the month of April, 2013,
to prepare accounts for Processes B and C.
Process
A B C
Output in units 12,600 11,400 300
Normal loss in process of input 20 5
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Process
A B C
Scrap value of any loss in process per
unit 1.5 5

Direct material introduced (15,000
units) 1,12,500


Direct material added 30,000 12,810 300
Direct wages incurred at Rs. 3 per
hour 36,000 44,100 900
Production overhead for the month, Rs. 2,16,000 is
absorbed by a labour hour rate method.
14. From the following information determine the profit
as it would be shown by cost accounts; and prepare a
statement reconciling it with profit shown by financial
accounts
Trading and Profit Loss Account
For the year ended 31st March 2014
Rs. Rs.
Materials Consumed 1,00,000 Sales (1,00,000
Direct wages 50,000 units) 2,00,000
Works expenses 30,000
Office expenses 9,000
Selling and Distribution
expenses
6,000
Net Profit 5,000
2,00,000 2,00,000
The normal output of the factory is 1,50,000 units. Work's
expenses of a fixed nature are Rs. 18,000. Office expenses
are for all practical purposes constant. Selling and
distribution expenses are constant to the extent of
Rs. 3,000 and the balance varies directly with sales.
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15. The standard material cost for 100 kgs. of chemical D is
made up of
Chemical A — 30 kgs. Rs. 4 per kg.
Chemical B — 40 kgs. Rs. 5 per kg. and
Chemical A — 80 kgs. Rs. 6 per kg.
In a batch, 500 kgs. of Chemical D was produced from a
mix of
Chemical A — 140 kgs. at a cost of Rs. 588
Chemical B — 220 kgs. at a cost of Rs. 1,056
Chemical C — 440 kgs. at a cost of Rs. 2,860
Calculate all variances in the actual cost per 100 kgs. of
chemical D over the standard cost.