Exam Details

Subject cost and management accounting
Paper
Exam / Course mba
Department
Organization Gujarat Technological University
Position
Exam Date November, 2018
City, State gujarat, ahmedabad


Question Paper

1
Seat No.: Enrolment
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA SEMESTER 09 EXAMINATION WINTER 2018
Subject Code: 4190513 Date: 27/11/2018
Subject Name: Cost and Management Account Time: 10:30 AM TO 01:30 PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1

"Limitation of financial accounting have made the management to realize the importance of cost management accounting" comment.
07

Explain ABC analysis and EOQ technique of inventory control.
07
Q.2

Define costing and discuss objectives of cost and management accounting. What are the methods of costing that are used in cost accounting?
07

Why flexible budget considered superior to flexible budget?
07
OR

Distinguish between following.
Job Batch Costing Normal loss Abnormal loss
07
Q.3

FD limited process a patent material used in buildings. Material is produced in three consecutive grades, viz. B and C.
Process I
Process II
Process III
Raw material used
1000 tones


Cost per tones
Rs 200


Manufacturing wages expenses
Rs 87500
Rs 39500
Rs 10710
Weight loss of input of the process)

10%
20%
Scrap (sales price Rs 50 per tone)
50 tones
30 tones
51 tones
Sale price per tone
Rs 350
Rs 500
Rs 800
Management expenses amount to Rs 17500 and selling expenses are Rs 10000. Two thirds of the output of process I and one-half of the output of process II are passed on to the next process and the balance is sold. The entire output of process III is sold. Prepare the three process accounts and a statement of profit. Make approximations wherever necessary.
07

Describe the general principles of process costing and what are the fundamental principles of process costing?
07
OR
Q.3

What do you mean by operating costing? Explain characteristics and features of operating cost in details.
07
2

From the following data relating to two different vehicles, A and compute the cost per tone mile.
A
B
Mileage run (annual)
15000
6000
Tones per mile (average)
6
4
RS
RS
Cost of vehicles
25000
15000
Road license (annual)
750
750
Insurance (annual)
700
400
Garage rent
800
700
Supervision and salaries (annual)
2500
2500
Driver's wages per hour
3
3
Cost of petrol per gallon
3
3
Miles run per gallon
20 miles
15 miles
Repairs and maintenance charge (Rs mile)
1.65
2.00
Tyre allocation per mile
0.40
0.60
Estimated life of the vehicle (miles)
100000
75000
You are required to charge interest on cost of vehicle at 5 per annum. The vehicles run 20 miles per hour on an average.
07
Q.4

Elaborate in detail the necessary steps needed to establish a standard costing system.
07

A department attains a sale of Rs 600000 at 80% of its normal capacity and its expenses are given below.
Administrative Expenses
Rs
Selling Costs
Rs
Office Salaries
90000
Salaries
of sales
General Expenses
of sales
Travelling Expenses
of sales
Depreciation
7500
Sales office expenses
of sales
Rate and Taxes
8750
General Expenses
of sales
07
The distribution costs are: Wages Rs 15000; Rent of Sales; and others Expenses of Sales.
Draw up a flexible Administration overhead, selling distribution overhead, cost budget, operating at 100% and 110% of normal capacity.
OR
Q.4

What is CVP analysis? How does it help the management?
07

Following details are available:
Sales
Total cost
Period I
Rs 39000
Rs 34800
Period II
Rs 43000
Rs 37600
07
Calculate variable cost, fixed cost and contribution for each period.
Q.5

What is MOS BEP analysis? How MOS can be improved and how it can help the management?
07

What do you mean by pricing decision? Explain in detail the objectives of pricing decision.
07
OR
Q.5

Define decision making. Explain the role of costs in decision making.
07

State provision of company's Act 1956 with respect to cost accounting records.
07



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