Total No. of Questions 10] [Total No. of Pages 04
BBM/BBA DEGREE EXAMINATION, MAY 2018
Third Year
COST AND MANAGEMENT ACCOUNTING
Time 3 Hours Maximum Marks :70
Answer any five questions.
All questions carry equal marks.
× 14 70)
Q1) Discuss the features of a good costing system.
Q2) What is labour turnover? What are its courses? Indicate the steps which may
reduce labour turnover.
Q3) What is meant by cost volume profit analysis? Explain the advantages of such
analysis.
Q4) A company uses three raw materials B and C for a particular product for
which the following data apply:
Raw Usage Re- Price Delivery Period Re- Min.
Material per Unit Order Per (in Weeks) Order Level
of Pro- Quantity Kg. Min. Avg. Max. Level
duct


A 10 10,000 0.10 1 2 3 8,000
B 4 5,000 0.30 3 4 5 4,750
C 6 10,000 0.15 2 3 4 2,000
Weekly production varies from 175 to 225 units, averaging 200 units of the
said product.
What would be the following quantities:
Minimum stock of
ii) Maximum stock of
iii) Re-order level of
iv) Avg. stock level of
Q5) A manufacturing company has disclosed a net loss of

8,75,000 as per their
cost accounting records for the year ended March 31, 2010. However, their
financial accounting records disclosed a net loss of

7,19,250 for the same
period. A scrutiny of the data of both the sets of books of accounts revealed
the following information:

factory overheads over absorbed 47,500
ii) Administration overheads under absorbed 32,750
iii) Depreciation charged in Financial Accouts 2,25,000
iv) Depreciation charged in Cost Accounts 2,42,250
Interest on investments not included in Cost Accounts 62,750
vi) Income tax provided in Financial Accounts 7,250
vii) Transfer fees (credit in financial Accounts) 12,500
viii) Preliminary expenses written off 27,500
ix) Under valuation of opening stock in Cost Accounts 6,250
Under valuation of closing stock in Cost Accounts 17,500
Required: Prepare a Memorandum Reconciliation A/c.
Q6) Define reports. Explain the methods of Presentation of Reports.
Q7) Paramount Engineers are engaged in construction and erection of a bridge
under a long-term contract. The cost incurred upto 31.03.2001 was as under.
Fabrication

In Lakhs
Direct material 280
Direct labour 100
Overheads 60
440
Erection costs to date 110
550
The contract price is

11 crores and the cash received on account till
31.03.2001 was

6 crores.
The technical estimate of the contract indicates the following degree of
completion of work. Fabrication Direct material Direct labour and
Overheads 60% Erection 40%.
You are required to estimate the profit that could be taken to Profit and Loss
Account against this partly completed contract as at 31.03.2001.
Q8) A factory is currently running at 50% capacity and produces 5,000 units at a
cost of

900 per unit as per details below:

Material 500
Labour 150
Factory overheads 150

60 fixed)
Administrative overheads 100

50 fixed)
The current selling price is

1,000 per unit. At 70% working, material cost per
unit increases by and selling price per unit falls by 2%.
Estimate profits of the factory at 70%. Working by preparing a flexible
budget.
Q9) The standard labour employment and the actual labour engaged in a 40 hours
week for a job are as under:
Category of Standard Actual
workers No. of Wage Rate No.of Wage Rate
Workers per hour

Workers per hour


Skilled 65 45 50 50
Semi-skilled 20 30 30 35
Un-skilled 15 15 20 10
Standard output: 2000 units Actual output 1800 units
Abnormal idle time 2 hours in the week.
Calculate:
Labour cost variance;
ii) Labour efficiency variance;
iii) Labour idle time variance.
Q10)The following accounting information and financial ratios of M Ltd. related to
the year ended 31st March, 2012:
Inventory turnover Ratio 6 times
Creditors turnover Ratio 10 times
Debtors turnover Ratio 8 times
Current Ratio 2.4
Gross profit Ratio 25%
Total Sales

30,00,000; Cash sales 25% of credit Sales; Cash purchases

2,30,000; Working Capital

2,80,000; Closing inventory is

80,000 more
than opening inventory.
You are required to calculate;
Avg. inventory.
ii) Purchases.
iii) Avg. Debtors.
iv) Avg. creditors.
Avg. payment period.
vi) Avg. collection period.
vii) Current assets.
viii) Current liabilities.