1
LOYOLA COLLEGE (AUTONOMOUS), CHENNAI 600 034
B.A.DEGREE EXAMINATION ECONOMICS
THIRDSEMESTER APRIL 2018
16UCO3AL02- ACCOUNTING FOR ECONOMISTS
Date: 03-05-2018 Dept. No. Max. 100 Marks
Time: 01:00-04:00
SECTION A
Answer ALL the Questions (10 X
1.
State any four objectives of Material Control.
2.
How do you calculate "Cost of material consumed''?
3.
Write a short note on Funds from operation.
4.
State any two differences between cash flow statement and fund flow statement.
5.
Find out Economic Order Quantity from the following particulars:
Annual usage 1600 units
Cost of material per unit Rs 40 per unit
Cost of placing and receiving one order is Rs 50 and annual carrying cost of inventory is 10% of inventory value.
6.
List out any five methods of pricing material issues.
7.
What is meant by labour cost?
8.
Ascertain bonus under Halsey Plan:
Standard Time 15 Hours
Actual Time 10 Hours
Time rate Rs 2 per Unit.
9.
Sales Rs 20,000
Fixed cost Rs 4,000
Break even Point Rs 10,000
Calculate Ratio Profit
10.
Calculate BEP in units and value for the following:
Total Cost Rs 50,000
Total variable Cost Rs 30,000
Sales(5000 units) Rs 50,000
SECTION B
Answer any FOUR questions X 10 40)
11.
From the following balance sheets you are required to prepare a Cash flow statement:
Liabilities
2015
Rs
2016
Rs
Assets
2015
Rs
2016
Rs
Share capital
Profit and loss A/c
Current liabilities
3,00,000
20,000
90,000
3,50,000
33,000
65,000
Land
Stock
Debtors
Cash
70,000
90,000
1,20,000
1,30,000
86,000
1,00,000
1,15,000
1,47,000
4,10,000
4,48,000
4,10,000
4,48,000
12.
a)Find out EOQ from the following Particulars:
Annual usage 6000 units
Cost of material per unit Rs 20
Cost of placing and receiving one order Rs 60.Annual carrying cost of one unit of inventory value.
From the following information, calculate:
Maximum stock level
Minimum stock level
c)Re-order level
d)Average stock level
2
Minimum consumption 240 units per day
Maximum consumption -420 units per day
Normal consumption 300 units per day
Re order quantity 3600 units
Re order period 10-15 days
Normal re-order period- 12 days.
13
From the particulars given below write-up the stores ledger card:
2015
January 1 opening stock 1000 units at Rs 26 each
5 purchased 500 units at Rs 24.50 each
7 issued 750 units
10 purchased 1500 units at Rs 24 each
12 issued 1100 units
15 purchased 1000 units at Rs 25 each
17 issued 500 units
18 issued 300 units
25 purchased 1500 units at Rs 26 each
29 issued 1500 units
Adopt FIFO method of issue and ascertain the value of closing stock.
14.
XYZ corporation Ltd.,has prepared the following budget estimates for the year 2015-2016:
Sales units Rs 15000
Fixed expenses Rs 34000
Sales value Rs Rs 1,50,000
Variable cost Rs 6 per unit
You are required to:
Find P/V ratio,BEP and margin of safety.
ii) Calculate the revised P/V ratio,BEP and margin of safety in each of the following cases.
Decrease of 10% in selling price.
Increase of 10% in variable costs.
15.
A Factory has three service departments L,M and N and two production departments X and Y.The following are the expenses allocated and apportioned to the departments as per primary distribution summary.
L

M

N

X

Y

10000
8000
12000
30000
40000
The following additional information is also available on the basis of a detailed analysis made.
Service departments
Production departments
L
M
N
X
Y
service used
service used
service used



20%


30%
40%

30%
30%
60%
20%
30%
40%
Prepare a statement showing apportionment of service department overheads under the step method.
16
Calculate the normal and overtime wages payable to a workman from the following data:
Normal working hours 8 Hrs per day: on Saturday 4 Hrs
Days
Hours worked
Monday
Tuesday
Wednesday
Thursday
Friday
Saturday
8
12
10
10
9
4
53
3
Normal rate Rs 2 per hour.
Over time rate upto 9 Hrs in a day at single rate and over 9 hrs in a day at double rate. Or upto 48 hours in a week at single rate and over 48 hrs at double rate, whichever is more beneficial to the worker
b)Calculate the earnings of the workers X and Y under Taylor's differential piece rate system from the following details:
Standard time per unit 12 minutes
Standard rate per hour Rs 60
Differentials to be used 80% and 120%
In a particular day of 8 hours, worker X produced 30 units and worker Y produced 50 units.
17.
A manufacturing company finds that while cost of making a component part is Rs 10, the same is available in the market at Rs 9 with an assurance of continuous supply. Give your suggestion whether to make or buy this part. Give also your views incase the supplier reduces the price from Rs 9 to Rs 8.The cost information is as follows:
Material Rs 3.50
Direct labour Rs 4.00
Other variable expenses Rs 1.00
Fixed expenses Rs 1.50
Rs 10.00
From the following particulars,prepare stores ledger by adopting weighted average method of pricing of material issues.
Date
Receipts
Issues
2010 Jan 1
10
12
15
16
18
20
22
25
27
31
300 units at Rs 10 per unit
200 units at Rs 12 per unit
400 units at Rs11 per unit
200 units at Rs 14 per unit
300 units at Rs 15 per unit
100 units at Rs 16 per unit
250 units
150 units
300 units
200 units
100 units
SECTION C
Answer any TWO questions X 20 40)
18.
XYZ Co.Ltd is a company with an authorized capital of Rs 5,00,000 divided into 5,000 equity shares of Rs 100 each on 31-12-1985 of which 2,500 shares were fully called up. The following are the balances extracted from the ledger as on 31-12-1985.
Trial balance of XYZ Co Ltd
Debit
Rs
Credit
Rs
Opening stock
Purchases
Wages
Discount allowed
Insurance (upto 31.3.86)
Salaries
Rent
General expenses
Printing
Advertisements
Bonus
Debtors
Plant
Furniture
Bank
Bad debts
Calls-in -arrears
50,000
2,00,000
70,000
4,200
6,720
18,500
6,000
8,950
2,400
3,800
10,500
38,700
1,80,500
17,100
34,700
3,200
5,000
6,60,270
Sales
Discount received
Profit and loss a/c
Creditors
Reserves
Loan from managing director
Share capital
3,25,000
3,150
6,220
35,200
25,000
15,700
2,50,000
6,60,270
You are required to prepare statement of profit and loss for the year ended 31-12-1985 and a balance
sheet as on that date . The following further information is given.
4
Closing stock was valued at Rs 1,91,500
Depreciation on plant at Rs 15% and on furniture at 10% should be provided.
A tax provision of Rs 8000 is considered necessary.
The directors declared an interim dividend on 15.8.85 for 6 months ending
June 30,1985@ 6%.
Provide for corporate dividend tax
19.
Kamesh Ltd.,has three production departments A,B and C and two service departments D
and E.The following figures are extracted from the records of the company
Rent and rates Rs 5000
Indirect Wages Rs 1500
Depreciation of Machinery Rs 10000
General Lighting Rs 600
Power Rs 1500
Sundries Rs 10000
Following further details are available:
Total
A
B
C
D
E
Floor space in square feet
Light points
Direct wages(Rs)
H.P of machines
Value of machinery(Rs)
10000
60
10000
150
250000
2000
10
3000
60
60000
2500
15
2000
30
80000
3000
20
3000
50
100000
2000
10
1500
10
5000
500
5
500

5000
Apportion the cost to various departments on the most equitable basis by preparing a primary departmental distribution summary.
20.
From the following particulars, calculate earnings of a worker under:
Time rate system
ii) Piece wage rate
iii) Halsey plan
iv) Rowan plan
Wage rate Rs 2 per hour
Production per hour- 4 units
Dearness allowance- Re 1 per hour
Standard time fixed- 80 hours
Actual time taken-50 hours
Production 250 units
b)The sales turnover and profit during two years are as follows:
Year
Sales
Profit
2006
140,000
15000
2007
160,000
20000
Calculate:
P/V ratio.
Breakeven point.
Sales required to earn a profit of Rs.40, 000.
Fixed expenses and
Profit when sales are Rs.1, 20,000.
21.
Draw a stores ledger card recording the following transactions under FIFO and b)LIFO
Method
2010
July 1 opening stock 2000 units at Rs 10 each.
5 Received 1000 units at Rs 11 each.
6 issued 500 units.
10 Received 5000 units at Rs 12 each.
12 Received back 50 units out of the issue made on 6th July.
14 Issued 600 units.
18 Returned to supplier 100 units out of the issue made on 5th July.
19 Received back 100 units out of the issue made on 14th July.
20 Issued 150 units.
25 Received 500 units at Rs 14 each.
28 Issued 300 units.
The stock verification report reveals that there was a shortage of 10 units on 18th
July and another shortage of 15 units on 26th July.