Sem I-2018 (Tnne)

J2ndSm.)-Cost&Mgm. Accounting-1-H-1
2018
COST AND MANAGEMENT ACCOUNTING-I - HONOURS

First Paper
(CC 2.1 Ch)
Full Marks : 80

The figures in the margin indicate full marks.

Candidates are required to give their answers in their own words
as far as practicable.

Group-A
(Marks-20)
1. Define Costing. State three objectives of Cost Accounting.
Or
(a) Distinguish between direct cost and indirect cost.

(b) Classify the cost of following items as direct cost or indirect cost:
) Ingots used in a foundry for casting;
i) Nails used to make furniture;
(üi) Wages of the machine operator;
iv) Cost of designing the product;
(V) Wages of the shop supervisor;
(vi) Factory rent. +3
2. State with reasons the behaviour of following costs and calculate cost for 2,800 units.

Production 1,500 units 2,000 units

Cost-A R 12,000 16,000

Cost-B ) 9,000 9,000
Cost-C F) 7,000 8,000

3. A company estimated its cost as below

Materials 14,000; Wages - 10,000; Factory overhead - 60% of Wages; Administrative & Selling
overhead (excluding commission) - 20% of Works Cost.

If Sales commission is 5% on sales and rate of profit is 25% on cost, find the selling price.
Or
What is Factory overhead? State the steps to be followed to charge factory overhead to products. 5
Please Turn Over
J/2nd Sm.-Cost & Mgmt. Accounting-1-H-1 (2)
4. (a) What do you mean by composite cost unit? Give two examples.
(6) A transport company maintains a fleet of 10 trucks for transporting goods from Kolkata to Asansol
via Durgapur. The distance from Kolkata to Durgapur is 250 kms. and that from Durgapur to
Asansol is 30 kms. Each truck which operates 26 days in a month on an average, starts everyday
from Kolkata with a load of 10 tons. It unloads 6 tons at Durgapur and rest of the goods at
Asansol. It comes back to Kolkata after getting reloaded with goods weighing 8 tons at Asansol.
You are required to calculate cost per ton-km. when the total monthly operating expenses for
2-3a
truck are 7 1,89,540.

Group-B
(Marks-30)
5. The particulars of receipts and issues of materials in a factory in March, 2018 are as under
March 1 Opening balance 100 kgs @75 per kg.
3 Purchased 200 kgs@76 per kg
8 Issued 140 kgs
9 Purchased 100 kgs @7 7 per kg.
14 Issued 200 kgs
21 Purchased 250 kgs @ 7 8 per kg.
25 Issued 180 kgs
30 Shortage 20 kgs
Prepare Stores Ledger using a suitable method of pricing the issues when the company keeps its stock
at current market price. 10

Or
(a) State the differences between Bin Card and Stores Ledger.
(b) Following information are available from the books of a company
Annual requirement of material A : 12.000 units @ 7 60 p.u.
Every order costs 2.000 and inventory carrying charges are 20% on average inventory.
Safety stock is 20 days consumption and time required to get a new supply is 15 days.
Find (i) EOQ. (ii) Ordering level, (ii) Minimum level & (iv) Maximum level.
[assume 1 year = 300 effective days and consumption per day is uniform] 4+6

6. From the following particulars you are required to calculate the amount of wages payable to four
workers A, B, C and D.
i) Time rate : 7 30 per hour.
(i) Standard output (per week of 40 hours): 400 units.
(ii) Step bonus rate
Efficiency (%) of Std.) Bonus (%of time wages)
60 75 2
75 85
86 95 10
96 100 15
above 100 additional 2% for every 5% increase over 100% efficiency
 (3) 2nd Sm.)-Cost &Mgmt. Accounting-1-H-1
368 units; C =
390 units and D
=
440 units.
(iv) Production during the said week: A =
280 units; B
bonus' is allowed. 10
(V) Dearness allowance 25% on 'time wage plus
Or,
records of time keeping
(a) In a factory it is noted that there has been a wide variation between the
How will you treat
and that of time booking. What may be the possible reasons for such variation?
the cost of such variation in cost accounting?
of the job is ? 8,592.
(b) In a worker has taken 48 hours to complete a job. The works cost
factory, a
is 30. Production overhead
The raw-material cost of the job is 7 6,000. Hourly rate of wages
bonus according to Rowan
is recovered on the job @ 50% of direct wages. The worker is to get
incentive scheme. Caleulate the standard time allowed for the job. 5+5

of cost accounts and financial accounts?

7. (a) What are the reasons for disagreement profits as per
entries in the cost books for the following
(6) Assuming non-integrated accounting system, pass journal
transactions

(i) Purchase of materials 80,000

i) Issue of material for production 50,000

(i) Issue of material for repairs and maintenance 5,000

iv) Direct wages charged to production 15,000
(v) Stock destroyed by fire 4,000 5+5
Group-C
(Marks-30)
8. On 01.04.17, B. Ltd. undertook a contract to construct a building for 7 20,00,000 and furnishes the
following details for the year ended on 31.03.18:

Materials issued to the contract 4,00,000 Materials stolen from site 8,000
Wages incurred 5,60,000| Insurance claim received against above 2.400
Apportioned head office expenses 32,000 Sale of unused materials costing R 4,000
6,700 (treated as normal)
Subcontract charges 24,000 Materials at site on 31.03.18 16,800
Other works expenses (10% of wages) Direct expenses accrued on 31.03.18 1,600
Plant installed at cost 1,60,000|Cash received 10,24,000
Materials returned to store 5,600 Retention money 20%
Direct expenses 8,000 Cost of uncertified work 9,600
Cost of plant transferred to another contract on 01.07.17 40,000
Depreciation to be charged on plant @ 15% p.a.

Prepare Contract A/c in the books of B. Ltd. and also show the value of WIP. 15
|J(2nd Sm.)-Cost&Mgmt. Accounting-1-H-1 (4)
Or,
The product of a manufacturing concern passes through two processes, viz., A and B, and then to
finished goods. From the following information prepare Process A Account, Process B Account, Normal
Loss Account, Abnormal Loss/Gain Account/s
ProcessA Process B
Materials introduced (in tons) 2,000 140
Cost of materials per ton ) 250 400
Output (tons) 1,660 1,560
Normal weight loss (%) 5
Scrap (% of total input) 10 10
Scarp value per ton (3) 160 400
Direct wages (R) 1,12,000 40,000
Manufacturing expenses () 32,000 21,000
15

9. (a) What do you mean by allocation and apportionment of production overhead? In this connection,
which of the following items of production overhead are to be allocated and which are to be
apportioned?
) Wages of machine shop supervisor;
i) Repairs and maintenance of assembly department;
Cii) Salary of factory security staff;
(iv) Power bill of the factory 3+2
(b) A company has three production departments - A, B, C and two service departments X and
Y. The following figures are available for one month of 25
working days of 6 effective hours each.
Total Production Department Service Deptt.
Particulars A B C X Y
Direct Material () 10,000 1,000 2,000 4,000 2,000 1,000
Direct Wages () 30,000 5,000 10,000 12,000 1,000 2,000
Supervisor's Salary () 2,000
Rent ()
1,500
Welfare Expenses (R) 1,200
Other Expenses (T) 1,800
No. of Workers
10 20 25 5
Floor Area (Sq. ft.)
500 1,000 1,500 500 500
Services rendered by X 40% 30% 20% 10%
Services rendered by Y
50% 20% 30%
Calculate labour hour rate for each of the
production departments, A, B and C. 10