GUJARAT TECHNOLOGICAL UNIVERSITY
M.B.A. -2 SEMESTER-EXAMINATION - WINTER 2015
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Subject code: 820001 Date: 30/12/2015
Subject Name: COST AND MANAGEMENT ACCOUNTING (CMA)
Time: 02.30 PM TO 05.30 PM Total Marks: 70
Instructions:
- Attempt all questions.
- Make suitable assumptions wherever necessary.
- Figures to the right indicate full marks.
- Working notes is a part of your answers.
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Q.1 (a) Differentiate between Cost and Management Accounting. (7)
Q.1 (b) The Ajanata Chemical Company supplies you material and following (7) is the cost record:
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Particulars Rs.
Stock of raw material on 1st September, 2014 72,800
Stock of raw material on 30th September, 2014 78000
Direct Wages 5,16,880
Sales 15,39,200
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Works overhead charges 1,29,220
Office overhead expense 70,141
Stock of finished goods on 1st September, 2014 33280
Stock of finished goods on-30th September, 2014 35360
Prepare a Cost Sheet giving the maximum possible break-up of cost and profit.
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Q.2 (a) Write a note on classification of overheads. (7)
Q.2 (b) Star Company, manufacturing two products, furnishes the following data for two products: (7)
| Products | Annual Output (units) | Total Machine Hours | Number of Purchase order | Number of Set-up in the period |
|---|---|---|---|---|
| A | 10000 | 30000 | 30 | 20 |
| B | 15000 | 15000 | 120 | 80 |
The annual overheads are as under:
Particulars Rs.
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Relating to machine activity 4,50,000
Set-up related costs 40,000
Handling related costs 90,000
You are required to calculate the cost per unit of each product A and B on the basis of Activity based costing method.
OR
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Q.2 (b) The following direct costs were incurred on Job Nos.111 of HFL Company: (7)
Materials Rs. 200
Wages:
Dept. A-60 hours @ Rs.1.30 per hr.
Dept. B-20 hours @ Rs. 0.90 per hr.
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Dept. C-10 hours @ Rs.1.20 per hr.
Overhead for these three department were estimated as follows:
Dept. A- Rs.1.50 per labour hour
Dept. B- Rs.2.50 per labour hour
Dept. C- Rs.2.00 per labour hour
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20% of factory cost is added for general administration and further 10% of the total cost is added for profit. You required to calculate the price to be quoted for the job.
Q. 3 (a) An article has to undergo three different processes before it becomes ready for sale. From the following information, prepare process accounts showing total cost and cost per unit if 200 units of that article were manufactured-for the year ended on 31 Dec 2014. (7)
| Process 1 (Rs.) | Process 2 (Rs.) | Process 3 (Rs.) | |
|---|---|---|---|
| Material | 2,000 | 1,000 | 750 |
| Labour | 1,500 | 2,500 | 1,000 |
| Direct Expenses | 400 | 200 | 300 |
Total indirect expenses for the period, amount Rs. 6000 in the factory out of which Rs. 2000 is attributable to this article and are to be allocated on the basis of labour for each process. Prepare process account of all processes.
Q.3 (b) What is operating costing? Draw a Specimen cost sheet for Transportation costing. (7)
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OR
Q.3 (a) From the following data calculate the cost per Kilometers (KMs) of a Vehicle. (7)
Value of vehicle Rs. 25,000/-
Road license for the year Rs.750/-
Insurance charges per year Rs.700/-
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Garage rent per year Rs.800/-
Supervision and salaries per year Rs. 2500/-
Driver’s wages per hour Rs.3/4
Cost of petrol per liter Rs.3/4
KMs run per litre 20 KMs
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Repair and maintenance per KMs Rs. 1.65
Tyre allocation per KMs Rs. 0.40
Estimated life (KMs) 100000
Estimated annual mileage (KMs) 15000
You are required to charge interest on cost 5% per annum. The vehicle runs 20 KMs per hour on an average.
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Q.3 (b) Explain the difference between Joint and By product. (7)
Q.4 (a) The operating statement of a company is as follows: (7)
Sales (80,000 units @ Rs. 15): Rs. 12,00,000
Variable cost:
- Material: 2,40,000
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- Labor: 3,20,000
- Overheads: 1,60,000
Fixed: 3,20,000
Total Cost: 10,40,000
Profit: 1,60,000
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The plant capacity is 1,00,000 units. A customer-from USA is desirous of buying 20,000 at a net price of Rs. 10 per unit. Advise-the company whether or not the offer should be accepted?
Q.4 (b) What is Marginal Cost? Discuss in detail-the importance of marginal costing. (7)
OR
Q.4 (a) Write a note on transfer pricing-and various bases of transfer prices. (7)
Q.4 (b) XYZ company furnishes you the following information for the Year 2010. (7)
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| First half | Second half | |
|---|---|---|
| Sales Rs. | 2,00,000 | 3,00,000 |
| Profit earned Rs. | 20,000 | 40,000 |
From the above you are required to compute the following; assuming that the fixed cost remain the same in both periods:
- Profit/Volume Ratio (%).
- Margin of safety.
- Break Even Point sales.
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Q.5 (a) Give a brief note on Flexible Budget and Zero base budgeting. (7)
Q.5 (b) Write a short note on following: 1. Standard Costing 2. Variance analysis (7)
OR
Q.5 (a) With the following given data for a 50% activity, prepare a budget at 80% and 100% activity: (7)
Production at 50% capacity 1000 units
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Materials Rs.120 per unit
Labour Rs.80 per unit
Expenses Rs.20 per unit
Factory Expenses Rs.70,000 (50% Fixed)
Administration Expenses Rs.50,000 (50% Fixed)
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Q.5 (b) From the following data, calculate material related variance. (7)
Standard material usage for producing product X is as follows:
40 kg of material A @ Rs. 50 per kg.
60 kg of material B @ Rs. 40 per kg.
Actual material usage for producing product X is as follows:
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Material A: 50 kg. @ Rs. 50 per kg.
Material B: 60 kg. @ Rs. 45 per kg.
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