B.

Com (BFSI)

IV Semester

COST AND MANAGERIAL ACCOUNTING

1. Answer the following:

a. What are the objectives of cost accounting?
b. Define cost unit and cost Centre
c. What is material cost?
d. Draft the format of cost sheet
e. What is labour costing? (5*3 = 15 Marks)

2. XL Ltd., has 3 production departments and 4 service departments. The expenses for these
departments as per primary distribution summary are as follows:
Production departments:
A – Rs. 30,000
B – Rs. 26,000
C – Rs. 24,000
D- Rs. 20,000
Service departments: Rs. 1,00,000
Stores – Rs. 4,000
Time-Keeping and Accounts – Rs. 3,000
Power – Rs. 1,600
Canteen – Rs. 1,000
Rent – Rs. 1,200
Electricity – Rs. 2,400
Depreciation – Rs. 7,000
The following information is also available in respect of the production departments:

Particulars A B C D
Horse power of 300 250 200 50
machine
Number of workers 20 15 15 10
Value of stores 2,500 1,500 1,000 700
requisition (Rs.)
Floor Space (Sq. 1000 2000 1500 220
Mt.)
Light points 3 2 4 1
Value of Machine 6000 8000 10,000 990
Apportion the costs of service departments over the production departments. (5 Marks)
3. Shriram enterprises manufactures a special product “ZED”. The following particulars
were collected for the year 2006:
a. Monthly demand of ZED – 1000 Units
b. Cost of Placing an order – Rs. 100
c. Annual Carrying Cost per unit – Rs. 15
d. Normal Usage – 50 units per week
e. Minimum Usage – 25 units per week
f. Maximum Usage – 75 units per week
g. Re-Order period – 4 to 6 weeks

Compute: (i) Re-Order Quantity (ii) Re-Order level (iii) Minimum level (iv) Maximum
level (v) Average stock level (5 Marks)

4. Answer any one from the following:

(a) Compute EOQ for various situations:

Particulars S-1 S-2 S-3

Annual Requirement 1,00,000 kgs 2,00,000 units 40,000 liters
of Raw Material
Ordering Cost Per Rs. 80 Rs. 50 Rs. 4
Unit
Carrying Cost Per Rs. 4 Rs. 20 Rs. 0.50
Unit

(OR)

(b) A Company manufactures a special product which requires a component, Alpha. The
following particulars are collected for the year 2008:
a. Annual demand of Alpha 8,000 units
b. Cost of placing an order Rs.200 per order
c. Cost per unit of Alpha Rs.400
d. Carrying cost % p.a. 20% on net purchase value.

The company has been offered a quantity discount of 4 % on the purchase of Alpha
provided the order size is 4,000 components at a time.

You are required to : (a) Compute the economic order quantity (b) Advise whether the
quantity discount offer can be accepted. (5 Marks)
5. In a unit, 15 men work as a group. When the production for the group exceeds the
standard output of 150 pieces per hour, each man is paid an incentive for the excess
production in addition to his wages at hourly rates. The incentive is at half the
percentage, the excess production over the standard bears to the standard production.
Each man is paid an incentive at the rate of this percentage of a wage rate of Rs. 25 per
hour. There is no relation between the individual workman’s hourly rate and the bonus
rate.
In a week, the hours worked are 550 hours and the total production is 1,10,000 pieces.
(a) Compute the total amount of the bonus for the week.
(b) Calculate the total earnings of two workers Tom and Jerry of the group:-
- Tom worked 42 hours and his basic rate per hour was Rs. 21
- Jerry worked 49 hours and his basic rate per hour was Rs. 20 (5 Marks)

6. The following data relates to the manufacture of a standard product during the month of
April, 2018:
Raw materials ₹ 1,80,000
Direct wages ₹ 90,000
Machine hours worked (hours) 10,000
Machine hour rate (per hour) ₹ 8
Administration overheads (general) ₹ 35,000
Selling overheads (per unit) ₹ 5
Units produced 4,000
Units sold 3,600
Selling price per unit ₹ 125 (5
Marks)

7. From the following transactions, prepare a Stores Ledger Account using FIFO & LIFO
method for the year 2010:

1 July Opening stock 500 units @ 20 each

4 July Purchased GRN 574 400 units @ 21 each
6 July Issued SR 251 600 units
8 July Purchased GRN 578 800 units @ 24 each
9 July Issued SR 258 500 units
13 July Issued SR 262 300 units
24 July Purchased GRN 584 500 units @ 25 each
28 July Issued SR 269 400 units
GRN = Goods Received Notes; SR = Stores Requisition (10 Marks)