M.Com. DEGREE EXAMINATION, APRIL 2016.
ADVANCED COST ACCOUNTING
(2012 onwards)
Time 3 Hours Maximum 75 Marks
Section A 3 15)
Answer all questions.
All questions carry equal marks.
1. State the significance of cost and cost accounting.
2. How joint products differ from by products?
3. What do you meant by inter processes profit?
4. State the difference between cot control and cost
reduction.
5. Write note on "Life Cycle Costing".
Section B 10 50)
Answer all questions, choosing either or
All questions carry equal marks.
6. Prepare a Stores ledger Account and enter the
following transactions by adopting the weighted
average method of pricing.
2009 Aug. 1 Opening balance 50 units 30 per unit
Aug. 4 Issued 20 units.
Aug. 8 Purchased 48 units 40 per unit
Sub. Code
611401
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Aug. 9 Issued 20 units.
Aug. 15 Purchased 76 units 30 per units
Aug. 22 Received back into stores 19 units out of
20 units issued on Aug.
2009 Aug. 30 Issued to production 10
Or
A factory consists of three Production Departments
viz., Turning. Milling and Grinding. Though
maintenance is done by the departments, the
factory keeps four service departments too viz.,
Stores, Planning, Canteen and Time Office. For the
month of December 2011 the Direct Departmental
Expenses were recorded as follows.
Turning 72,000 Stores 36,000
Milling 84,000 Planning 60,000
Grinding 1,08,000 Canteen 48,000
Time Office 12,000
The expenses of Stores are to be distributed on a
percentage basis, viz., 40% to Turning.
Milling and Grinding respectively. The expenses of
planning are to he apportioned on the basis of
Machine Hours worked and those of Canteen and
Time Office according to number of men employed
in Production Departments.
Men employed No. of hours worked
22 10,000 Turning
32 15,000 Milling
46 25,000 Grinding
Prepare a statement showing the distribution of the
Service Department's Expenses to the Production
Departments and also determine the final
absorption rate.
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7. A firm of building contractors began to trade on
1st April 2009. The following was the expenditure on
the contract for 3,00,000: Materials issued to
contract 51,000; Plant used for contract 15,000;
Wages incurred 81,000; Other expenses incurred
5,000.
Cash received on account to 31st March, 2010,
amounted to 1,28,000 being 80% of the work
certified. Of the plant and materials charged to the
contract, plant which cost, 3,000 and materials
which cost 2,500 were lost. On 31st March 2010
plant which cost 2,000 was returned to store, the
cost of work done but uncertified was 1,000 and
materials costing 2,300 were in hand on site.
Charge 15% depreciating on plant, and take to the
profit and loss account 2/3 of the profit received.
Prepare the contract account, contractee's account.
Or
Mr. Sohan Singh has started transport business
with a fleet of 10 taxies. The various expenses
incurred by him are given below
Cost of each taxi 75,000
Salary of office staff 1,500 p.m.
Salary of garage staff 2,000 p.m.
Rent of garage 1,000 pp.
Driver's salary (per taxi) 400 pp.
Road tax and repairs per taxi 2,160 pa.
Insurance premium of cost pa.
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The life of a taxi is 3,00,000 km and at the end of
which it is estimated to be sold at 15,000. A taxi
runs on an average 4,000 km per month of which
20% it runs empty. Petrol consumption is 9 km per
litre of petrol costing 6.30 per litre. Oil and other
sundry expenses amount to 10 per 100 km
Calculate the effective cost of running taxi per km.
if hire charge is Rs. 1.80 per km., find out the profit
Mr. Sohan Singh may expect to make in the first
year of operation.
8. Product X is obtained after it is processed through
three distinct processes. The following cost
information is available for the operation.
Process
Total I II III
Direct Materials 5,625 2,600 2,000 1,025
Direct wages 7,330 2,250 3,680 1,400
Production overheads 7,330
500 Units 4 per unit were introduced in
Process I. Production Overhead to be distribute as
100 in Direct Wages.
The Actual Output and Normal loss of the
respective processes are
Output unit Normal loss on input Value of Scrap
per unit
Process I 450 10% 2.00
Process II 340 20% 4.00
Process III 270 25% 5.00
There is no stock or work-in progress in any process.
Show the three Process Accounts. The Normal
Loss account; and Abnormal Loss and Abnormal
Gain account.
Or
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In Process A 2000 units were introduced during one
month. The normal loss was estimated of
input. At the end of the month 460 units were
incomplete. The stage of completion is as follows
Material 75
Labour 50
Overhead 50
Prepare statement of equivalent production;
however the following changes may be taken into
consideration.
Finished product 1,400 units
Work in progress 460 units
Normal loss
9. The information regarding the composition and
hourly wage rates engaged on a job scheduled to be
completed in 30 hours are as follows
Category of
workers
Standard Actual
No. of
workers
Hourly wage rate
per worker
No. of
workers
Hourly wage
rate per worker
Skilled 75 6 70 7
Semi skilled 45 4 30 5
Un-skilled 60 3 80 2
The work was completed in 32 hours. Calculate
labour variances.
Or
"Marginal costing as a tool of cost ascertainment
and control" Discuss.
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10. Describe the utility of relevant and irrelevant cost
for decision making.
Or
Explain the application of "Activity Based Costing".
Section C 10 10)
Compulsory question.
11. The following extracts of costing information relates to
commodity A for the half-year ending 31st March 2010.
Purchase of raw materials 1,20,000
Works overheads 48,000
Direct Wages 1,00,000
Carriage on Purchases 1,440
Stock (1st October 2009)
Raw materials 20,000
Finished Products (1,000 tons) 16,000
Stock (31st March 2010)
Raw materials 22,240
Finished Products (2,000 tons) 32,000
Work-in-progress (1st October 2009) 4,800
Work-in-progress (31st March 2010) 16,000
Sales Finished Products 3,00,000
Selling and distribution overheads are Re. 1 per ton
sold. 16,000 tons of commodities were produced
during the period.
You are to ascertain Cost of raw materials used;
Cost of output for the period; Cost of sales;
Net Profit for the period, and Net profit per
ton of the commodity.