GUJARAT TECHNOLOGICAL UNIVERSITY
MBA (AM) SEMESTER 09 - EXAMINATION - SUMMER-2018
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Subject Code: 4190513
Subject Name: Cost and Management Account
Time: 2:30 PM To 5:30 PM
Date: 02/05/2018
Total Marks: 70
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Instructions:
- Attempt all questions.
- Make suitable assumptions wherever necessary.
- Figures to the right indicate full marks.
Q.1(A) Define costing & discuss the methods of costing used in cost accounting? 07
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Q.1( B) “Management Accounting serves not only as a tool in management but also provide techniques of evaluating performance of management.”-Comment. 07
Q.2(A) Distinguish between Cost accounting & Management accounting. 07
Q.2(B) Following information is available for Geet Ltd.
| Sales(Rs.) | Profit (Rs.) | |
|---|---|---|
| Period I | 1,50,000 | 4,000 |
| Period 11 | 1,90,000 | 12,000 |
Calculate BEP, Fixed Cost, PV Ratio & MOS. 07
OR
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Q.2 (B) What are the components of total cost shown in cost-sheet? Give the uses of the cost-sheet. 07
Q.3(A) What is ‘Cost driver’? What is the role of cost driver in tracing cost of product? 07
Q.3 (B) A product is manufactured by passing through three processes A,B and C. In process C a by- Product is also produced which is then transferred to process D where it is completed. For the first week in January, the actual data included.
| Particular | Process-A | Process-B | Process-C | Process-D |
|---|---|---|---|---|
| Normal loss of input (%) | 5 | 10 | 5 | 10 |
| Scrap value (Rs. Per unit) | 1.50 | 2.00 | 4.00 | 2.00 |
| Estimated sales value of by-product (Rs. Per unit) | -- | -- | 8.00 | - |
| Output (Unit) | 5,760 | 5,100 | 4,370 | - |
| Output of by-product (Units) | -- | -- | 510 | 450 |
| Direct material (6000 Units) in Rs. | 12,000 | -- | - | - |
| Direct material added in process (in Rs.) | 5,000 | 9,000 | 4,000 | 220 |
| Direct wages (in Rs) | 4,000 | 6,000 | 2,000 | 200 |
| Direct expenses(in Rs.) | 800 | 1,680 | 2,260 | 151 |
Budgeted production overhead (based on direct wages) for the week is Rs.30,500.
Budgeted direct wages for the week is Rs. 12,200.
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You are required to prepare:
(1) Accounts for processes A,B,C and D.
(i1) Abnormal loss and abnormal gain accounts. 07
Q.3( A) Distinguish between Joint & By product .
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Q.3( B) The under data is supplied by Thomas travel services, From the following information calculate fare for passenger KM.
| The cost of the Bus | Rs. 4,50,000 |
| Insurance charges | 3 % p.a. |
| Annual tax | Rs. 4,500 |
| Garage rent | Rs. 500 p.m. |
| Annual repairs | Rs. 4,800 |
| Expected life of the bus | 5 yrs |
| Value of scrap at the end of 5 years | Rs. 30,000 |
| Route distance | 20 km long |
| Driver’s salary | Rs. 550 p.m. |
| Conductor’s salary | Rs. 550 p.m. |
| Commission to Driver & Conductor (shared equally) | 10% of the takings |
| Stationery | Rs. 250 p.m. |
| Manager-cum-accountant’s salary | Rs. 1750 p.m. |
| Diesel and oil (for 100 kms) | 125 |
The bus will make 3 rounds trips for carrying on the average 40 passenger’s in each trip.
Assume 15% profit on takings. The bus will work on the average 25 days in a month. 07
Q.4(A) Explain ABC analysis & EOQ techniques of inventory control. 07
Q.4(B) The Queen manufacturing company processed production through two departments (1) Machining and (i1) Finishing.
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Overhead rates are predetermined on the basis of machine hours in the machine department and the direct labour wages in the finishing department.
The figures for 2016-17 based on which the overhead rates were arrived at are furnished as below.
| Particular | Machining Deptt (Rs) | Finishing Deptt(Rs) |
|---|---|---|
| Direct labour-wages | 36,00,000 | 40,00,000 |
| Factory overhead | 80,00,000 | 60,00,000 |
| Direct labour hours | 24.00,000 | 50,00,000 |
| Machine hours | 20,00,000 | 5,00,000 |
The Cost Sheet for Job Order No:1748 indicates the following:
| Particular | Machining Deptt | Finishing Deptt |
|---|---|---|
| Material consumed | Rs. 50 | Rs. 7 |
| Direct labour wages | Rs. 45 | Rs. 40 |
| Direct labour hours | 24 | 35 |
| Machine hours | 15 | 5 |
Assuming that the production order No. 1748 consisted of 10 numbers of part No. P-1865, prepare a Job cost sheet showing the unit cost of the part. 07
OR
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Q.4(A)What is BEP & MOS analysis? How MOS can be improved? Describe with formula. 07
Q.4(B) A product is sold at a price of Rs. 120 per unit and its variable cost is Rs. 80 per unit. The fixed expenses of the business are Rs. 8,000per year. Calculate (i) BEP in Rs. & units, (i1) profits made when sales are 240 units, (ii1) Sales to be made to earn a net profit of Rs. 5,000 for the year. 07
Q.5(A) Explain in brief ‘Normal’ & ‘Abnormal’ loss of Process costing. 07
Q.5(B) Following information is available from the records of Ajay Ltd for the year end 31% march 2017. (Rs. In lakhs)
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| Fixed Expenses | |
|---|---|
| Wages and salaries | 9.5 |
| Rent,rates and taxes | 6.6 |
| Depreciation | 7.4 |
| Sundry administrative expenses | 6.5 |
| Semi-Variable Expenses | |
|---|---|
| (At 50% of capacity) | |
| Maintenance & Repairs | 3.5 |
| Indirect labour | 7.9 |
| Sales department salaries | 3.8 |
| Sundry administrative expenses | 2.8 |
| Variable Expenses | |
|---|---|
| (At 50% of capacity) | |
| Materials | 21.7 |
| Labour | 20.4 |
| Other Expenses | 7.9 |
Assuming that the fixed expenses remain constant for all levels of production , semi-variable expenses remain constant between 45% and 65%.0f capacity increasing by 10% between 65% and 80% and by 20% between 80 % and 100%.
Sales at various levels are (Rs. In lakhs):
| 50 % capacity | 100 |
| 60 % capacity | 120 |
| 75 % capacity | 150 |
| 90 % capacity | 180 |
| 100 % capacity | 200 |
Prepare a flexible budget for the year and forecast the profits at 60%, 75%, 90 % and 100 % of capacity. 07
OR
Q.5(A) What are Cost Accounting standards? How these standard are applicable in Cost Accounting? 07
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below.
| Material | Quantity (Kgs) | St. Rate per Kg. (Rs.) |
|---|---|---|
| P | 450 | 20 |
| Q | 400 | 40 |
| R | 250 | 60 |
| Total | 1,100 | -- |
| Standard loss | 100 | - |
| Standard output | 1,000 | - |
Actual production in a period was 20,000 kg. Of finished product for which the actual quantities of material used and the prices paid therefore were as under:
| Material | Quantity (Kgs) | Purchase price per Kg. (Rs.) |
|---|---|---|
| P | 10,000 | 19 |
| Q | 8,500 | 42 |
| R | 4,500 | 65 |
Calculate:
(1) Material cost variance;
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(i1) Material price variance;
(ii1) Material usage variance ; and
(iv) Material yield variance . 07
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