2011
(August)
Paper:
103
Full
Marks: 80
Time:
3 hours
1. (a)
Explain briefly the evolution of cost accounting system and cost concepts. 8+8=16
Or
(b) Briefly explain the
distinction between cost control and cost reduction. 16
2. (a)
The following figures are extracted from the financial accounts of a manufacturing
firm for the first year of its operation:
Particulars
|
Amount
|
Direct material
consumption
Direct wages
Factory
overheads
Administrative overheads
Selling and
distribution overheads
Bad debts
Preliminary expenses
written off
Legal charges
Dividend received
Interest on
deposit received
Sales (120000
units)
Closing stock:
Finished stock
(4000 units)
Work - in - progress
|
5000000
3000000
1600000
700000
960000
80000
40000
10000
100000
20000
1200000
320000
240000
|
The cost accounts for the same period reveal that the direct material consumption was Rs. 56,00,000. Factory overhead is recovered at 20% on prime cost. Administrative overhead is recovered @ Rs. 6 per unit of production. Selling and distribution overhead are recovered @ Rs.8 per unit sold.
You are required to
prepare costing and Financial profit and loss accounts and reconcile the
difference in the profits as arrived at in the two sets of accounts. 16
Or
(b) A product passes
through three processes to completion. These processes are known as X, Y and Z.
The output of each process is charged to the next process at a price calculated
to give a profit of 20% on the transfer price. The output of process Z is
charged to finished stock in a similar basis.
There was no partly
finished work in any process on December 31, on which date the following
information was obtained:
Particulars
|
Process
X (Rs.)
|
Process
Y (Rs.)
|
Process
Z (Rs.)
|
Materials
Labour
Stock: Dec 31
|
4000
6000
2000
|
6000
4000
4000
|
2000
8000
6000
|
Stock in each process were
valued at price cost to the process. There was no stock in hand on January 1st
and question of overhead was ignored. Of the goods passed into finished stock,
Rs. 4000 remained in hand on December 31, and the balance has been sold for R.s
36000. Show process accounts and calculate reserve for unrealised profits. 16
3. (a)
what are the different methods and devices used in analysis of financial
statements? Explain one of them. 8+8=16
Or
(b)What do you understand
by comparative statements? Explain its merits and demerits. 8+8=16
4. (a)
Compare the following capital structures (is Rs. ‘000)
Particulars
|
A Ltd.
|
B. Ltd.
|
C Ltd.
|
Equity share
capital
10% preference
share capital
Reserves and
surplus
15% secured
debentures
|
100
50
50
400
|
150
100
50
300
|
250
-----
50
300
|
Total
|
600
|
600
|
600
|
Assume tax rate @50%. Expected profit
before interest and taxes but after all expenses and depreciation in each case
Rs. 72000. 16
Or
(b) Explain the Balance Sheet ratios. 16
5. (a)
What is “operating cycle concept”? What steps should be taken into account
while deciding the working capital requirements of an organisation? 6+10=16
Or
(b) From the following
information pertaining to X Ltd, you are required to prepare a Forecast Profit
and Loss account for the year ended 30th june, 2011 and Balance sheet
as on that date:
Paid – up share
capital
8% Debentures
(Secured on assets)
Fixed assets as
on 1st july, 2010
Bank overdraft
as on 1st july, 2010
|
1000000
250000
625000
181250
|
Production during the
previous year was 60000 units. It is expected that this level of activity would
be maintained during the current year.
The expected ratios of
cost of selling prices are-
Raw materials 60%, Direct
wages 10%, Overheads (Including debentures interest) 20%.
Raw materials remain in
store on an average for 2 months.
Materials remain in
process (Valued at cost of raw materials plus 50% of direct wages and
overheads) on an average for one month.
Finished goods remain in
stock on an average for three months.
Credit allowed by
creditors is two months and credit allowed to debtors is three months.
Selling price is Rs. 25
per unit.
You are required that
there is a regular production cycle and sales cycle. 16