## Wednesday, July 25, 2012

### Dibrugarh University - Cost Accounting 2002

1. “Financial accounting treats costs very broadly, while the cost accounting does this in much greater detail”. Discuss this with Suitable examples. 10+10=20

2. It is said, “cost accounting is a system of foresight and not post-mortem examination; it turns losses into profits, speeds up Activities and eliminates wastes”. Discuss this statement in detail. 20

3. What do you mean by elements of cost? Explain the different elements of total cost. 8+12=20

4. (a) A lorry load of materials of mixed grades was purchased for Rs. 9,000. They were sorted into the following grades whose Selling price is shown against each:
Units                                     Selling price per unit

Find the purchase rate unit of each grade of the material, assuming all grades yield same rate of profit. 10

(b) What are the essentials of material control? 10

5. The following is an extract of the records of the receipts and issues of a chemical during a month.

1 Feb.                    Opening balance              500 tonnes @ Rs.200
3 Feb.                    Issued                                   70
4 Feb.                    Issued                                   100
8 Feb                     Issued                                   80
13 Feb.                 Received                             200         “@ Rs.190
14 Feb.                 Returned from
Department                       15
16 Feb.                 Issued                                   180
20 Feb.                 Received                             240            @ Rs.190
24 Feb.                 Issued                                   300
25 Feb.                 Received                             320             @ Rs.190
26 Feb.                 Issued                                   115
27 Feb.                 Returned from
Departments                     35
28 Feb.                 Received                             100              @ Rs.190

Issues are to be priced on the principle of “First-in-First-out”. The stock verifier has found a shortage of 10 tonnes on the 22nd, And left a note accordingly. Draw up a store ledger card for the material showing the above transactions. 20

6. (a) From the particulars given below, calculate earnings of two workers, A and B under straight piece rate system and Taylor’s
Differential piece rate system:
Standard time per unit 36 seconds
Normal rate per hour Rs.3
Differential rates to be applied:
80% of piece rate when below standard
120% of piece rate when at or above standard.
The workers A and B have produced in a day of 8 hours as follows:
A: 700 units
B: 900 units                                                                                                                                                                                                         10

(b) What are the requisites of a satisfactory system of labour remuneration?                                                                                      10

7. A company makes two types of vehicles, A and B. The total expenses during a period as shown by the books for the assembly
Of 600 of the type A and, 800 of the type B vehicle are as under.
Rs.
Materials                                                                                                             1, 98,000
Direct wages                                                                                                      12,000
Running expenses of machine                                                                   4,400
Depreciation                                                                                                      2,200
Labour amenities                                                                                             1,500

The other data available to you is:
a)      Material cost ratio per unit A : B= 1: 2
b)      Direct labour ratio per unit 2: 3
c)       Machine utilization ratio per unit 1: 2
Calculate the cost of each vehicle per unit giving reasons for the basis of apportionment adopted by you.             10+10=20

8. Aniance Ltd. Processes a patent material used in buildings. The material is produced in three consecutive grades – soft, medium And hard.
Process I                              Process II                             Process III
(a) Raw material used                                    1000 tonnes                              _                                            _
(b) Cost per tonne                                           Rs.200                                          _                                            _
(c) Manufacturing wages & exp.                Rs.87, 500                            Rs.39, 500                            Rs.10, 710
(d) Weight lost (% of input of the process)    5%                                       10%                                    20%
(e) Scrap (Sale price Rs.50 per tonne)     50 tonnes                            30 tonnes                            51 tonnes
(f) Sale price per tonne                                 Rs.350                                   Rs.500                                   Rs.800

Management expenses were Rs.17, 500 and selling expenses Rs.10, 000. Two third of the output of process I and one half of the Output of process II is passed on to the next process and the balances are sold. The entire output of process III is sold. Prepare The three process accounts and a statement of profit. Make approximations, where necessary.   10+10

### Dibrugarh University - Cost Accounting 2001

1. ‘Cost Accounting is beneficial to varied sections of society.’ Elaborate.               20

2. The books and record of Anand Manufacturing Company present the following data for the month of August, 2000:

Direct labour cost Rs 16,000 (160% of factory overhead)
Cost of goods sold Rs 56,000
Inventory accounts showed these opening and closing balances:

August 1                                              August 31
Rs                                                            Rs
Raw materials                                                                    8000                                                       8600
Work-in-progress                                                            8000                                                       12000
Finished goods                                                                  14000                                                    18000
Other data:
Selling expenses                                                                                                                              3400
Sales for the month                                                                                                                        75000

You are required to prepare statement showing cost of goods manufactured and sold and profit earned.            10+10

3. What is perpetual inventory system? Why control of material is cost an essential of a good cost accounting system?                10+10

4. What is idle time? Why is it caused? How is it controlled? 6+7+7

5. What are the principles of allocation and apportionment of overheads? With the help of a chart, show the classification of overheads. 10+10

6. a) During one week, the workman X manufactured 200 articles. He receives wage for a guaranteed 44-hour week at the rate of Rs 15 per hour. The estimated time to produce one article is 15 minutes and under incentive scheme the time allowed is increased by 20%. Calculate his gross wages under each of the following methods of remuneration:
(i)      Time rate
(ii)    Piece work with a guaranteed weekly wage
(iv)  Halsey premium bonus, 50% to workman

b) What factors should be considered in a particular incentive system?               2+3+5+5+5

7. Product B is obtained after it passes through three distinct processes. The following information is obtained from the accounts for the week ending February 12, 2001:

Items                                    Total                                      I                               II                             III
Rs                                           Rs                           Rs                           Rs
Direct material                                  7542                                       2600                       1980                       2962
Direct wages                                      9000                                       2000                       3000                       4000
1000 units at Rs 3 were introduced to Process I. There was no stock of materials or work-in-progress at the beginning or end of the period. The output of each process passes direct to the next process and finally to finished stores. Production overhead is recovered on 100% of direct wages. The following additional data are obtained:
Process                                Output during the week           % of normal loss to input              Value of scrap per unit (Rs)

Process I                              950                                                         5%                                                          2
Process II                             840                                                         10%                                                        4
Process III                           750                                                         15%                                                        5

Prepare process cost accounts and abnormal gain or loss accounts. 2+2+2+2+2+2+8

8. XYZ company manufactures a product ABC by mixing three raw materials. For every 100 kg of ABC, 125 kg of raw materials are used. In April 2000, there was an output of 5600 kg of ABC. The standard and actual particulars of April 2000 are as follows:

Raw material                                                      Standard                                                              Actual
Mix        Price/kg                                               Mix        Price/kg
%            Rs                                                           %            Rs
Raw material I                                                   50           40                                                           60           42
Raw material II                                                  30           20                                                           20           16
Raw material III                                                 20           10                                                           20           12
Calculate all variances.                                                                                                                                                                   20

### Dibrugarh University - Cost Accounting 2000

1. Distinguish between Cost and Financial Accounting and enumerate the advantages of a good system of cost accounting. 10+10

2. Write in brief on each of the following: 5x4
a)      Bin cards
b)      Perpetual inventory system
c)       Purchase requisition
d)      Minimum reorder level

3. Explain the time wage system and the piece rate system of wage payments. 10+10

4. What is the meaning of the term ‘overhead’? Explain fixed, variable and semi-variable overhead.  5+5+5+5

5. In respect of a factory the following figures have been obtained for the year 1998:
Rs
Cost of materials                                                              3, 00,000
Direct wages                                                                      2, 50,000
Distribution charges                                                           70,000
Profit                                                                                     2, 10,000
A work order has been executed in 1999 and the following expenses have been incurred: Materials Rs 4,000 and Wages Rs 2,500. Assuming that in 1999 the rate of factory charges has increased by 20%, distribution charges have gone down by 10% and selling and administrative charges have each gone up by 12 ½ %. At what price should the product be sold so as to earn the same rate of profit on the selling price as in 1998? Factory overheads are based on direct wages while all other overheads are based on factory cost.     8+4+8

6. The product of a manufacturing concern passes through two processes A and B and then to finished stock. It is ascertained that in each process 5% of the total weight is lost and 10% is scrap, which from processes A and B realise Rs 80 per tonne and Rs 200 Per tonne respectively. The following are the figure relating to both the processes:             8+8+4

Process A                                            Process B
Materials (tones)                                                             1000                                                       70
Cost of materials (Rs per tonne)                                125                                                         200
Wages (Rs)                                                                         28,000                                                   10,000
Manufacturing (Rs)                                                         8,000                                                     5,250
Output (tones)                                                                 830                                                         780

Prepare the process cost account showing cost per tonne of each process. There was no stock or work-in-process in any process.

7. During the first week of April, 1999, a worker Mr. Kalyan manufactured 300 articles. He received wages for a guaranteed 48 hours week at the rate of Rs 4 per hour. The estimated time to produce one article is 10 minutes and under the incentive scheme the time allowed is increased by 20%.                4+7+9
Calculate his gross wage according to –
a)      piece work with a guaranteed weekly wage;
c)       Halsey premium bonus 50% to workman.

8. The standard materials cost to produce one tonne of chemical X is –
300 kg of material A @ Rs 10 per kg;
400 kg of material B @ Rs 5 per kg;
500 kg of material C @ Rs 6 per kg;

During a period, 100 tonnes of mixture X was produced from the usage of –

35 tonnes of material A at a cost of Rs 9,000 per tonne;
42 tonnes of material B at a cost of Rs 6,000 per tonne;
53 tonnes of material C at a cost of Rs 7,000 per tonne.

Calculate the cost, price, usage, mix and yield variances.               2+3+5+5+5