Download GTU (Gujarat Technological University) MBA (Master of Business Administration) 2016 Summer 2nd Sem 2820001 Cost And Management Accounting Cma Previous Question Paper
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER 02? ? EXAMINATION ? SUMMER 2016
Subject Code: 2820001 Date: 25/05/2016
Subject Name: Cost & Management Accounting (CMA)
Time: 10:30 AM to 1:30PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1) (a) From the four alternative answers given against each of the following cases,
indicate the correct answer:
1. The primary objective of Cost accounting is to ???.
a. Cost determination
b. Cost Control
c. Performance evaluation
d. All of the above.
2. In cement industry method of costing used is known as ???.
a. Job Order Costing
b. Terminal Costing
c. Batch Costing
d. Process Costing
3. Miscellaneous overheads are apportioned to various production
departments on the basis of ???.
a. Indirect wages
b. Floor area
c. Direct wages
d. Number of workers
4. ???. Is a hypothetical hour which represents the amount of work
which should be performed in one hour under stated conditions.
a. Actual Hour
b. Budgeted Hour
c. Standard Hour
d. All of the above.
5. Contribution + Variable cost = ???.
a. Profit
b. Fixed cost
c. Selling price
d. None of the above
6. A budget that gives a summary of all the functional budgets & projected
profit & loss a/c is known as ???
a. Capital budget
b. Master budget
c. Flexible budget
d. Discretionary budget
6
Q.1) (b) Explain the following terms (any 4):
a. Cost Accounting
b. Direct Labour
4
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Page 1 of 5
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER 02? ? EXAMINATION ? SUMMER 2016
Subject Code: 2820001 Date: 25/05/2016
Subject Name: Cost & Management Accounting (CMA)
Time: 10:30 AM to 1:30PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1) (a) From the four alternative answers given against each of the following cases,
indicate the correct answer:
1. The primary objective of Cost accounting is to ???.
a. Cost determination
b. Cost Control
c. Performance evaluation
d. All of the above.
2. In cement industry method of costing used is known as ???.
a. Job Order Costing
b. Terminal Costing
c. Batch Costing
d. Process Costing
3. Miscellaneous overheads are apportioned to various production
departments on the basis of ???.
a. Indirect wages
b. Floor area
c. Direct wages
d. Number of workers
4. ???. Is a hypothetical hour which represents the amount of work
which should be performed in one hour under stated conditions.
a. Actual Hour
b. Budgeted Hour
c. Standard Hour
d. All of the above.
5. Contribution + Variable cost = ???.
a. Profit
b. Fixed cost
c. Selling price
d. None of the above
6. A budget that gives a summary of all the functional budgets & projected
profit & loss a/c is known as ???
a. Capital budget
b. Master budget
c. Flexible budget
d. Discretionary budget
6
Q.1) (b) Explain the following terms (any 4):
a. Cost Accounting
b. Direct Labour
4
Page 2 of 5
c. Cost Sheet
d. Marginal costing
e. Budgetary Control
Q.1) (c) Distinguish between Cost Accounting & Financial Accounting on any five
bases
4
Q.2) (a) Define Budgetary control. State the objectives & limitation of budgetary
control.
7
Q.2) (b) The following extract of costing information relates to commodity D for the
year ending 31
st
December 2014
7
Purchase of Raw Materials Rs. 60,000
Direct Wages Rs. 50,000
Rent, rates, insurance & works on cost Rs. 20,000
Stock on 1
st
January 2014:
Raw materials Rs.10,000
Finished Goods ? 2000 tons Rs. 8000
Stock on 31
st
December 2014
Raw Material Rs. 11,000
Finished Goods- 4000 tons -
Work-in-progress 1
st
January 2014 Rs. 2400
Work-in-progress 31
st
December 2014 Rs. 8000
Carriage inward Rs. 1000
Cost of factory supervision Rs. 4000
Sales of finished goods Rs. 1,50,000
Advertising, discount allowed & selling costs Re. 0.40 per ton sold.32,000 tons
of the commodity were produced during the period. Ascertain:
1) The cost of the output of the period & the cost per ton of production.
2) The net profit per ton of the commodity.
OR
Q.2) (b) Relevant data relating to a company are: 7
Particulars P Q R TOTAL
Production & sales (Units) 60,000 40,000 16,000
Raw materials used in units 10 10 22
Raw material costs rupees 50 40 22 24,76,000
Direct labour hours 2.5 4 2 3,42,000
Machine hour 2.5 2 4 2,94,000
Direct labour costs (Rs) 16 24 12
No. of production run 6 14 40 60
No. of deliveries 18 6 40 64
No. of receipts 60 140 880 1080
No. of production orders 30 20 50 100
Overheads Rs
Setup 60,000
Machines 15,20,000
Receiving 8,70,000
Packing 5,00,000
Engineering 7,46,000
The company operates a JIT Inventory policy & receives each component once
per production run.
Required:
1) Compute the product cost based on direct labour hour recovery rate of
over heads.
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Page 1 of 5
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER 02? ? EXAMINATION ? SUMMER 2016
Subject Code: 2820001 Date: 25/05/2016
Subject Name: Cost & Management Accounting (CMA)
Time: 10:30 AM to 1:30PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1) (a) From the four alternative answers given against each of the following cases,
indicate the correct answer:
1. The primary objective of Cost accounting is to ???.
a. Cost determination
b. Cost Control
c. Performance evaluation
d. All of the above.
2. In cement industry method of costing used is known as ???.
a. Job Order Costing
b. Terminal Costing
c. Batch Costing
d. Process Costing
3. Miscellaneous overheads are apportioned to various production
departments on the basis of ???.
a. Indirect wages
b. Floor area
c. Direct wages
d. Number of workers
4. ???. Is a hypothetical hour which represents the amount of work
which should be performed in one hour under stated conditions.
a. Actual Hour
b. Budgeted Hour
c. Standard Hour
d. All of the above.
5. Contribution + Variable cost = ???.
a. Profit
b. Fixed cost
c. Selling price
d. None of the above
6. A budget that gives a summary of all the functional budgets & projected
profit & loss a/c is known as ???
a. Capital budget
b. Master budget
c. Flexible budget
d. Discretionary budget
6
Q.1) (b) Explain the following terms (any 4):
a. Cost Accounting
b. Direct Labour
4
Page 2 of 5
c. Cost Sheet
d. Marginal costing
e. Budgetary Control
Q.1) (c) Distinguish between Cost Accounting & Financial Accounting on any five
bases
4
Q.2) (a) Define Budgetary control. State the objectives & limitation of budgetary
control.
7
Q.2) (b) The following extract of costing information relates to commodity D for the
year ending 31
st
December 2014
7
Purchase of Raw Materials Rs. 60,000
Direct Wages Rs. 50,000
Rent, rates, insurance & works on cost Rs. 20,000
Stock on 1
st
January 2014:
Raw materials Rs.10,000
Finished Goods ? 2000 tons Rs. 8000
Stock on 31
st
December 2014
Raw Material Rs. 11,000
Finished Goods- 4000 tons -
Work-in-progress 1
st
January 2014 Rs. 2400
Work-in-progress 31
st
December 2014 Rs. 8000
Carriage inward Rs. 1000
Cost of factory supervision Rs. 4000
Sales of finished goods Rs. 1,50,000
Advertising, discount allowed & selling costs Re. 0.40 per ton sold.32,000 tons
of the commodity were produced during the period. Ascertain:
1) The cost of the output of the period & the cost per ton of production.
2) The net profit per ton of the commodity.
OR
Q.2) (b) Relevant data relating to a company are: 7
Particulars P Q R TOTAL
Production & sales (Units) 60,000 40,000 16,000
Raw materials used in units 10 10 22
Raw material costs rupees 50 40 22 24,76,000
Direct labour hours 2.5 4 2 3,42,000
Machine hour 2.5 2 4 2,94,000
Direct labour costs (Rs) 16 24 12
No. of production run 6 14 40 60
No. of deliveries 18 6 40 64
No. of receipts 60 140 880 1080
No. of production orders 30 20 50 100
Overheads Rs
Setup 60,000
Machines 15,20,000
Receiving 8,70,000
Packing 5,00,000
Engineering 7,46,000
The company operates a JIT Inventory policy & receives each component once
per production run.
Required:
1) Compute the product cost based on direct labour hour recovery rate of
over heads.
Page 3 of 5
2) Compute the product cost using activity based costing.
Q.3)(a) What is operating costing? Draw a specimen cost sheet for canteen costing? 7
Q.3)(b) A transport service company is running 4 buses between two towns which are
50 miles apart. Seating capacity of each bus is 40 passengers. The following
particulars were obtained from their books for April:
7
Particulars Rupees
Wages of drivers, conductors & cleaners 2,400
Salaries of office & supervisory staff 1,000
Diesel oil & other oil 4,000
Repairs & Maintenance 800
Taxation, Insurance etc 1,600
Depreciation 2,600
Interest & other charges 2,000
14,400
Actual Passengers carried were 75 % of the seating capacity. All the four buses
ran on all days of the month. Each bus made one round trip per day. Find out the
cost per passenger mile.
OR
Q.3) (a) What is process Costing? Explain the main features of process costing. Mention
the industries where it is applied.
7
Q.3) (b) AB Limited furnished you the following information relating to process B for
the month of October 2014
7
1) Opening WIP ? Nil
2) Units introduced ? 10,000 units @ Rs. 3 per unit.
3) Expenses debited to the process; direct materials Rs. 14,650; labour Rs.
21,148; overheads Rs. 42,000.
4) Finished output ? 9,500 units
5) Closing WIP 350 units; degree of completion : materials 100 %; labour &
overheads 50 %
6) Normal loss in the process ? one percent of input
7) Degree of completion of abnormal loss; materials 100 %; labour &
Overheads 80 %
8) Units scrapped as normal loss were sold at Rs. 1 per unit
9) All the units of abnormal loss were sold at Rs. 2.50 per unit.
Prepare
a) Statement of Equivalent Production
b) Statement of cost
c) Process ? B Account
d) Abnormal loss Account
Q.4) (a) What do you understand by CVP Analysis? How CVP analysis is useful for the
management?
7
Q.4) (b) A Company sold in two successive periods 7,000 units & 9,000 units and has
incurred a loss of Rs. 10,000 & earned Rs. 10,000 as profit respectively.
The selling price per unit can be assumed at Rs. 100
You are required to calculate:
a) The amount of fixed cost
b) The number of units to break even
c) The number of units to earn a profit of Rs. 40,000
7
OR
Q.4) (a) Define flexible budget. Explain its importance as a budgeting technique & a tool
of control.
7
Q.4) (b) The Standard cost of a chemical mixture is as follows: 7
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Page 1 of 5
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER 02? ? EXAMINATION ? SUMMER 2016
Subject Code: 2820001 Date: 25/05/2016
Subject Name: Cost & Management Accounting (CMA)
Time: 10:30 AM to 1:30PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1) (a) From the four alternative answers given against each of the following cases,
indicate the correct answer:
1. The primary objective of Cost accounting is to ???.
a. Cost determination
b. Cost Control
c. Performance evaluation
d. All of the above.
2. In cement industry method of costing used is known as ???.
a. Job Order Costing
b. Terminal Costing
c. Batch Costing
d. Process Costing
3. Miscellaneous overheads are apportioned to various production
departments on the basis of ???.
a. Indirect wages
b. Floor area
c. Direct wages
d. Number of workers
4. ???. Is a hypothetical hour which represents the amount of work
which should be performed in one hour under stated conditions.
a. Actual Hour
b. Budgeted Hour
c. Standard Hour
d. All of the above.
5. Contribution + Variable cost = ???.
a. Profit
b. Fixed cost
c. Selling price
d. None of the above
6. A budget that gives a summary of all the functional budgets & projected
profit & loss a/c is known as ???
a. Capital budget
b. Master budget
c. Flexible budget
d. Discretionary budget
6
Q.1) (b) Explain the following terms (any 4):
a. Cost Accounting
b. Direct Labour
4
Page 2 of 5
c. Cost Sheet
d. Marginal costing
e. Budgetary Control
Q.1) (c) Distinguish between Cost Accounting & Financial Accounting on any five
bases
4
Q.2) (a) Define Budgetary control. State the objectives & limitation of budgetary
control.
7
Q.2) (b) The following extract of costing information relates to commodity D for the
year ending 31
st
December 2014
7
Purchase of Raw Materials Rs. 60,000
Direct Wages Rs. 50,000
Rent, rates, insurance & works on cost Rs. 20,000
Stock on 1
st
January 2014:
Raw materials Rs.10,000
Finished Goods ? 2000 tons Rs. 8000
Stock on 31
st
December 2014
Raw Material Rs. 11,000
Finished Goods- 4000 tons -
Work-in-progress 1
st
January 2014 Rs. 2400
Work-in-progress 31
st
December 2014 Rs. 8000
Carriage inward Rs. 1000
Cost of factory supervision Rs. 4000
Sales of finished goods Rs. 1,50,000
Advertising, discount allowed & selling costs Re. 0.40 per ton sold.32,000 tons
of the commodity were produced during the period. Ascertain:
1) The cost of the output of the period & the cost per ton of production.
2) The net profit per ton of the commodity.
OR
Q.2) (b) Relevant data relating to a company are: 7
Particulars P Q R TOTAL
Production & sales (Units) 60,000 40,000 16,000
Raw materials used in units 10 10 22
Raw material costs rupees 50 40 22 24,76,000
Direct labour hours 2.5 4 2 3,42,000
Machine hour 2.5 2 4 2,94,000
Direct labour costs (Rs) 16 24 12
No. of production run 6 14 40 60
No. of deliveries 18 6 40 64
No. of receipts 60 140 880 1080
No. of production orders 30 20 50 100
Overheads Rs
Setup 60,000
Machines 15,20,000
Receiving 8,70,000
Packing 5,00,000
Engineering 7,46,000
The company operates a JIT Inventory policy & receives each component once
per production run.
Required:
1) Compute the product cost based on direct labour hour recovery rate of
over heads.
Page 3 of 5
2) Compute the product cost using activity based costing.
Q.3)(a) What is operating costing? Draw a specimen cost sheet for canteen costing? 7
Q.3)(b) A transport service company is running 4 buses between two towns which are
50 miles apart. Seating capacity of each bus is 40 passengers. The following
particulars were obtained from their books for April:
7
Particulars Rupees
Wages of drivers, conductors & cleaners 2,400
Salaries of office & supervisory staff 1,000
Diesel oil & other oil 4,000
Repairs & Maintenance 800
Taxation, Insurance etc 1,600
Depreciation 2,600
Interest & other charges 2,000
14,400
Actual Passengers carried were 75 % of the seating capacity. All the four buses
ran on all days of the month. Each bus made one round trip per day. Find out the
cost per passenger mile.
OR
Q.3) (a) What is process Costing? Explain the main features of process costing. Mention
the industries where it is applied.
7
Q.3) (b) AB Limited furnished you the following information relating to process B for
the month of October 2014
7
1) Opening WIP ? Nil
2) Units introduced ? 10,000 units @ Rs. 3 per unit.
3) Expenses debited to the process; direct materials Rs. 14,650; labour Rs.
21,148; overheads Rs. 42,000.
4) Finished output ? 9,500 units
5) Closing WIP 350 units; degree of completion : materials 100 %; labour &
overheads 50 %
6) Normal loss in the process ? one percent of input
7) Degree of completion of abnormal loss; materials 100 %; labour &
Overheads 80 %
8) Units scrapped as normal loss were sold at Rs. 1 per unit
9) All the units of abnormal loss were sold at Rs. 2.50 per unit.
Prepare
a) Statement of Equivalent Production
b) Statement of cost
c) Process ? B Account
d) Abnormal loss Account
Q.4) (a) What do you understand by CVP Analysis? How CVP analysis is useful for the
management?
7
Q.4) (b) A Company sold in two successive periods 7,000 units & 9,000 units and has
incurred a loss of Rs. 10,000 & earned Rs. 10,000 as profit respectively.
The selling price per unit can be assumed at Rs. 100
You are required to calculate:
a) The amount of fixed cost
b) The number of units to break even
c) The number of units to earn a profit of Rs. 40,000
7
OR
Q.4) (a) Define flexible budget. Explain its importance as a budgeting technique & a tool
of control.
7
Q.4) (b) The Standard cost of a chemical mixture is as follows: 7
Page 4 of 5
40 % material A at Rs. 20 per kg
60 % material B at Rs. 30 per kg
A standard loss of 10 % of input is expected in production. The cost records for
a period showed the following usage:
90 kg material A at a cost of Rs. 18 per kg
110 kg material B at a cost of Rs. 34 per kg
The quantity produced was 182 kg of good product.
Calculate all material variances.
Q.5 Tasty Bread makes & Supplies bread throughout the state of Gujarat. Three
types of bread are produced: loaves, rolls, & buns. Seven operations describe
the production process.
a) Mixing ; flour, milk, yeast, salt, butter, & so on are mixed in large vat.
b) Shaping; A conveyor belt transfers the dough to machine that weights it
& shapes it into loaves, rolls, or buns, depending on the type being
produced.
c) Rising; the individually shaped dough is allowed to sit & rise.
d) Baking; the dough is moved to 100 ? feet long funnel oven. (the dough
entres the oven on rack & spends 20 minutes moving slowly through the
oven).
e) Cooling; the bread is removed from the oven & allowed to cool.
f) Slicing; for loaves & buns (Hamburger & hot dog), the bread is sliced.
g) Packaging; the bread is wrapped (packaged)
Tasty bread produces its products in batches. The size of the batch depends on
the individual orders that must be filled (orders come from retail grocers
throughout the state). The production is continuous.
1) Identify the condition that must be present for operating costing be used
in this setting. If these conditions are not met, explain how process
costing would be used. If process costing is used, would you recommend
the weighted average method or FIFO method? Justify your answer.
2) Assume that operating costing is the best approach for this bread
manufacturer. Describe in detail how you would use operation costing.
Use a batch of dinner rolls (Consisting of 1000 packages of 12 rolls) & a
batch of whole loaves (Consisting of 5000, 24 ?oz sliced loaves) as
examples.
14
OR
Q.5) Manav Ltd is producing a software equipment from 5 components, three of
which are made by using general purpose machines & two by manual labour.
The data for the manufacture of equipment are as follows:
14
Components A B C D E TOTAL
Machine hours required per
unit
20 28 24 - - 72
Labour hours required per
unit
- - - 4 2 6
Variable cost per unit (Rs) 32 54 58 12 4 160
Fixed cost per unit
(apportioned)
48 102 116 24 26 316
Total component cost 80 156 174 36 30 476
Assembly cost/unit (All
Variable )
40
Selling price/unit 600
The marketing department of the company anticipates a 45 % increase in
demand during the next period. General purpose machinery used to manufacture
FirstRanker.com - FirstRanker's Choice
Page 1 of 5
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER 02? ? EXAMINATION ? SUMMER 2016
Subject Code: 2820001 Date: 25/05/2016
Subject Name: Cost & Management Accounting (CMA)
Time: 10:30 AM to 1:30PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1) (a) From the four alternative answers given against each of the following cases,
indicate the correct answer:
1. The primary objective of Cost accounting is to ???.
a. Cost determination
b. Cost Control
c. Performance evaluation
d. All of the above.
2. In cement industry method of costing used is known as ???.
a. Job Order Costing
b. Terminal Costing
c. Batch Costing
d. Process Costing
3. Miscellaneous overheads are apportioned to various production
departments on the basis of ???.
a. Indirect wages
b. Floor area
c. Direct wages
d. Number of workers
4. ???. Is a hypothetical hour which represents the amount of work
which should be performed in one hour under stated conditions.
a. Actual Hour
b. Budgeted Hour
c. Standard Hour
d. All of the above.
5. Contribution + Variable cost = ???.
a. Profit
b. Fixed cost
c. Selling price
d. None of the above
6. A budget that gives a summary of all the functional budgets & projected
profit & loss a/c is known as ???
a. Capital budget
b. Master budget
c. Flexible budget
d. Discretionary budget
6
Q.1) (b) Explain the following terms (any 4):
a. Cost Accounting
b. Direct Labour
4
Page 2 of 5
c. Cost Sheet
d. Marginal costing
e. Budgetary Control
Q.1) (c) Distinguish between Cost Accounting & Financial Accounting on any five
bases
4
Q.2) (a) Define Budgetary control. State the objectives & limitation of budgetary
control.
7
Q.2) (b) The following extract of costing information relates to commodity D for the
year ending 31
st
December 2014
7
Purchase of Raw Materials Rs. 60,000
Direct Wages Rs. 50,000
Rent, rates, insurance & works on cost Rs. 20,000
Stock on 1
st
January 2014:
Raw materials Rs.10,000
Finished Goods ? 2000 tons Rs. 8000
Stock on 31
st
December 2014
Raw Material Rs. 11,000
Finished Goods- 4000 tons -
Work-in-progress 1
st
January 2014 Rs. 2400
Work-in-progress 31
st
December 2014 Rs. 8000
Carriage inward Rs. 1000
Cost of factory supervision Rs. 4000
Sales of finished goods Rs. 1,50,000
Advertising, discount allowed & selling costs Re. 0.40 per ton sold.32,000 tons
of the commodity were produced during the period. Ascertain:
1) The cost of the output of the period & the cost per ton of production.
2) The net profit per ton of the commodity.
OR
Q.2) (b) Relevant data relating to a company are: 7
Particulars P Q R TOTAL
Production & sales (Units) 60,000 40,000 16,000
Raw materials used in units 10 10 22
Raw material costs rupees 50 40 22 24,76,000
Direct labour hours 2.5 4 2 3,42,000
Machine hour 2.5 2 4 2,94,000
Direct labour costs (Rs) 16 24 12
No. of production run 6 14 40 60
No. of deliveries 18 6 40 64
No. of receipts 60 140 880 1080
No. of production orders 30 20 50 100
Overheads Rs
Setup 60,000
Machines 15,20,000
Receiving 8,70,000
Packing 5,00,000
Engineering 7,46,000
The company operates a JIT Inventory policy & receives each component once
per production run.
Required:
1) Compute the product cost based on direct labour hour recovery rate of
over heads.
Page 3 of 5
2) Compute the product cost using activity based costing.
Q.3)(a) What is operating costing? Draw a specimen cost sheet for canteen costing? 7
Q.3)(b) A transport service company is running 4 buses between two towns which are
50 miles apart. Seating capacity of each bus is 40 passengers. The following
particulars were obtained from their books for April:
7
Particulars Rupees
Wages of drivers, conductors & cleaners 2,400
Salaries of office & supervisory staff 1,000
Diesel oil & other oil 4,000
Repairs & Maintenance 800
Taxation, Insurance etc 1,600
Depreciation 2,600
Interest & other charges 2,000
14,400
Actual Passengers carried were 75 % of the seating capacity. All the four buses
ran on all days of the month. Each bus made one round trip per day. Find out the
cost per passenger mile.
OR
Q.3) (a) What is process Costing? Explain the main features of process costing. Mention
the industries where it is applied.
7
Q.3) (b) AB Limited furnished you the following information relating to process B for
the month of October 2014
7
1) Opening WIP ? Nil
2) Units introduced ? 10,000 units @ Rs. 3 per unit.
3) Expenses debited to the process; direct materials Rs. 14,650; labour Rs.
21,148; overheads Rs. 42,000.
4) Finished output ? 9,500 units
5) Closing WIP 350 units; degree of completion : materials 100 %; labour &
overheads 50 %
6) Normal loss in the process ? one percent of input
7) Degree of completion of abnormal loss; materials 100 %; labour &
Overheads 80 %
8) Units scrapped as normal loss were sold at Rs. 1 per unit
9) All the units of abnormal loss were sold at Rs. 2.50 per unit.
Prepare
a) Statement of Equivalent Production
b) Statement of cost
c) Process ? B Account
d) Abnormal loss Account
Q.4) (a) What do you understand by CVP Analysis? How CVP analysis is useful for the
management?
7
Q.4) (b) A Company sold in two successive periods 7,000 units & 9,000 units and has
incurred a loss of Rs. 10,000 & earned Rs. 10,000 as profit respectively.
The selling price per unit can be assumed at Rs. 100
You are required to calculate:
a) The amount of fixed cost
b) The number of units to break even
c) The number of units to earn a profit of Rs. 40,000
7
OR
Q.4) (a) Define flexible budget. Explain its importance as a budgeting technique & a tool
of control.
7
Q.4) (b) The Standard cost of a chemical mixture is as follows: 7
Page 4 of 5
40 % material A at Rs. 20 per kg
60 % material B at Rs. 30 per kg
A standard loss of 10 % of input is expected in production. The cost records for
a period showed the following usage:
90 kg material A at a cost of Rs. 18 per kg
110 kg material B at a cost of Rs. 34 per kg
The quantity produced was 182 kg of good product.
Calculate all material variances.
Q.5 Tasty Bread makes & Supplies bread throughout the state of Gujarat. Three
types of bread are produced: loaves, rolls, & buns. Seven operations describe
the production process.
a) Mixing ; flour, milk, yeast, salt, butter, & so on are mixed in large vat.
b) Shaping; A conveyor belt transfers the dough to machine that weights it
& shapes it into loaves, rolls, or buns, depending on the type being
produced.
c) Rising; the individually shaped dough is allowed to sit & rise.
d) Baking; the dough is moved to 100 ? feet long funnel oven. (the dough
entres the oven on rack & spends 20 minutes moving slowly through the
oven).
e) Cooling; the bread is removed from the oven & allowed to cool.
f) Slicing; for loaves & buns (Hamburger & hot dog), the bread is sliced.
g) Packaging; the bread is wrapped (packaged)
Tasty bread produces its products in batches. The size of the batch depends on
the individual orders that must be filled (orders come from retail grocers
throughout the state). The production is continuous.
1) Identify the condition that must be present for operating costing be used
in this setting. If these conditions are not met, explain how process
costing would be used. If process costing is used, would you recommend
the weighted average method or FIFO method? Justify your answer.
2) Assume that operating costing is the best approach for this bread
manufacturer. Describe in detail how you would use operation costing.
Use a batch of dinner rolls (Consisting of 1000 packages of 12 rolls) & a
batch of whole loaves (Consisting of 5000, 24 ?oz sliced loaves) as
examples.
14
OR
Q.5) Manav Ltd is producing a software equipment from 5 components, three of
which are made by using general purpose machines & two by manual labour.
The data for the manufacture of equipment are as follows:
14
Components A B C D E TOTAL
Machine hours required per
unit
20 28 24 - - 72
Labour hours required per
unit
- - - 4 2 6
Variable cost per unit (Rs) 32 54 58 12 4 160
Fixed cost per unit
(apportioned)
48 102 116 24 26 316
Total component cost 80 156 174 36 30 476
Assembly cost/unit (All
Variable )
40
Selling price/unit 600
The marketing department of the company anticipates a 45 % increase in
demand during the next period. General purpose machinery used to manufacture
Page 5 of 5
A, B & C which are already working to maximum capacity of 9504 hours &
there is no possibility of increasing this capacity during the next period. But
labour is available for making component D & E & also for assembly according
to the demand. The management is considering the purchase of one of the
components A, B or C from the market to meet the increase in demand. These
components are available in the market at following prices:
Component A ? Rs 100, Component B ? Rs 300, & Component C- Rs 200.
Required:
a) Profit made by the company from the current operations.
b) If the company buys any one of the components A, B or C, what is the
extent of additional capacity that can be created?
c) Assuming a 50 % increase in demand during the next period, which
component should be bought from the market?
d) The increase in the profit, if any, if the component suggested in C is
purchased from the market.
e) Which component should be purchased & in what quantity if production
is increased by 55 %?
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This post was last modified on 19 February 2020