DISTANCE EDUCATION
M.Com. and DEGREE EXAMINATION, MAY 2017.
COST AND MANAGEMENT ACCOUNTING
(2005 onwards)
Time Three hours Maximum 100 marks
PART A — 8 40 marks)
Answer any FIVE questions.
1. Explain the objectives of cost accounting.
2. What is EOQ analysis?
3. What are the merits of process costing?
4. Explain the term batch costing.
5. What is cash budget?
6. The following information is available in respect of a
component
Maximum stock level 8400 units
Budgeted consumption Maximum 1500 units per month
Minimum 800 units per month
Estimated delivery period Maximum 4 months
Minimum 2 months
You are required to calculate
Re-order level
Re-order quantity.
Sub. Code
13
DE-389
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Sp 2
7. A manufacturing concern, which has adopted standard
costing furnished the following information
Standard Material for 70 kg finished products 100 kg
Price material Rs. 1 per kg.
Actual output 2,10,000 kg
Material used 2,80,000 kg
Cost of material Rs. 2,52,000.
Calculate
Material cost variance
Material price variance
Material usage variance.
8. Distinguish between alteration and absorption of
overheads.
PART B — 15 60 marks)
Answer any FOUR questions.
9. Describe different methods of costing.
10. A job can be done in 5 minutes by an average worker.
Give three different methods of payments by results and
show the cost per article for each method if the job is done
in 10 minutes. Assume basic time rate of Rs. 3 per hour.
11. Prepare a flexible budget for overheads on the basis of
the following data. Ascertain the overhead rates at
60% and 70% capacity.
At 60%
capacity
Variable overheads
Indirect material 6,000
Indirect labour 15,000
DE-389
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Sp 2
At 60%
capacity
Semi-variable overhead
Electricity fixed, 60% variable) 30,000
Repairs fixed, 20% variable) 6,000
Fixed overheads:
Depreciation 16,500
Insurance 4,500
Salaries 15,000
Total overheads 93,000
Estimated direct labour hours 1,86,000
12. From the following particulars, prepare a cost sheet and
find out the value of the job.
Material issued for the job Rs. 6,000, Productive wages
Rs. 4,600, Direct expenses Rs. 500, provide 60% on
productive wages for works on cost and 12½% on works
cost for office on cost. Profit be realised on the selling
price 15%.
13. Distinguish between financial accounting and
management accounting.
14. Prepare a cash budget from the following information
1st
Quarter
Rs.
2nd
Quarter
Rs.
3rd
Quarter
Rs.
4th
Quarter
Rs.
Opening cash
balance
10,000
Collection from
customers
payments
1,25,000 1,50,000 1,60,000 2,21,000
Purchase of
materials
20,000 35,000 35,000 54,200
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Sp 2
1st
Quarter
Rs.
2nd
Quarter
Rs.
3rd
Quarter
Rs.
4th
Quarter
Rs.
Other expenses 25,000 20,000 20,000 17,000
Salaries and
wages
90,000 95,000 95,000 1,09,200
Income-tax 5,000
Purchase of
machine
2,000
The company desired to maintain a cash balance of
Rs. 15,000 at the end of each quarter cash can be
borrowed or repaid in multiples of Rs. 500 of an interest
of 10% per annum. Management does not want to borrow
cash more than what is necessary and want to repay as
early as possible. In any event, loans cannot be extended
beyond 4 quarters. Interest is computed and paid when
the principal is repaid. Assume that borrowings take
place at the beginning and repayment are made at the
end of the quarters.
15. Assuming that the cost structure and selling price remain
the same in period I and II find out
Profit volume ratio
Fixed cost
Profit when sales are Rs. 1,00,000
Sales required to earn a profit of Rs. 20,000
Margin of safety.
Period Sales
Rs.
Profit
Rs.
I 1,20,000 9,000
II 1,40,000 13,000