2014
( August)
COMMERCE
Course : 103
( Cost and Management Accounting )
Full Marks : 80
Time : 3 hours
The figures in the margin indicate full marks for the questions.
1. (a) Define the term ‘Cost centre’ and ‘Cost unit’. Given below is a list of five industries. Give the method of costing and the unit of cost against each industry.
(i) Nursing home
(ii) Road transport (goods)
(iii) Steel
(iv) Bridge construction
(v) Sugar. 3+3+(2×5)=16
(b) Define activity based costing. What are its main objectives? Distinguish between activity based costing and conventional costing.4+6+6=16
2. (a) (i) Explain in detail the essential characteristics of process costing?
(ii) From the following information, prepare a Process Account, Abnormal Gain Account and Normal Loss Account.
Input of raw material – 840 units @ Rs. 40 per unit.
Direct Material Rs. 5,924
Direct wages Rs. 8,000
Overheads Rs. 8,000
Actual output 750 units
Normal Loss 15%
Value of scrap per unit Rs. 10 per unit. 6+10=16
Or
(b) State the reasons for the difference between the profits shown in the financial accounts and those shown in cost accounts of an industrial organisation. Explain the need for reconciliation of cost and financial accounts. 8+8=16
( Turn Over )
3. (a) Calculate the trend percentages from the following figures of X Ltd. taking 1996 as the base and interpret them 16
Year | Sales Rs. | Stock Rs. | Profit Before Tax Rs. |
1996 1997 1998 1999 2000 | 1,881 2,340 2,655 3,021 3,768 | 709 781 816 944 1,154 | 321 435 458 527 672 |
Or
(b) What are the different techniques adopted in analysis of Financial Statements? What are the limitations of Financial Statement Analysis? 12+4=16
4. (a) From the following information make out a statement of proprietor’s funds
with details.
(i) Current ratio is 2.5 ;
(ii) Liquid ratio 1.5 ;
(iii) Proprietory ratio (fixed asstes / proprietory fund) 0.75
(iv) Working capital Rs. 60,000
(v) Reserve and surplus Rs. 40,000
(vi) Bank overdraft Rs. 10,000 and
(vii) There is no long term loan or fictitious assets.
Or
(b) “Ratios are indicators – sometimes pointers but not in themselves powerful tools of management”. – Explain. 16
5. (a) Working capital management is nothing more than deciding about level, structure and financing of current assets. – Explain. 16
Or
(b) XYZ Ltd. sells its products on a gross profit of 20% on sales. The following information is extracted from its annual accounts for the year ended 31st March, 1999.
Sales at 3 months credit Rs. 40,00,000
Raw materials Rs. 12,00,000
Wages paid – 15 days in arrears Rs. 9,60,000
Manufacturing expenses paid – 1 month arrear Rs. 12,00,000
Administrative expenses – 1 month arrear Rs. 4,80,000
Sales promotion expenses payable half-yearly in
Advance Rs. 2,00,000
The company enjoys one month credit from the suppliers and maintains 2 months stock of raw materials and one-and-half month finished goods. Cash balance is maintained at Rs. 1,00,000 as a precautionary balance. Assuming a 10% margin,find out the working capital requirement of XYZ Ltd. 16
