2007 Baba Saheb Bhimrao Ambedkar University M.Com Finance and Control M.Com. Cost Mangement FC - 203 May 2007 Question paper
M.Com. Cost Mangement FC - 203 May 2007
Time : Three hours Maximum : 100 marks
SECTION A — (5 ? 8 = 40 marks)
Answer any FIVE of the following.
1. Describe the elements of cost.
2. What do you understand by labour turnover? What are the causes of it?
3. What are the differences between Job costing and Process costing?
4. Write a short note on equivalent production.
5. Describe any two techniques of capital budgeting.
6. What are the merits and demerits of standard costing?
7. What are the functions of management accounting?
8. Explain the accounting treatment for idle time and overtime in labour costing.
SECTION B — (4 ? 15 = 60 marks)
Answer any FOUR of the following.
9. From the following data prepare a statement of cost and profit :
Direct material – Rs. 2 per unit
Direct labour – Rs. 1 per units
Factory over head – Rs. 2 per units
Office over head – 50 paise per unit
Selling over head – 25 paise per unit
Number of units produced – 20, 000
Number of units sold – 18,000 units.
10. From the following information Prepare Stores Ledger under LIFO method.
Details of purchases :
January 1 Opening balance 500 units @ Rs. 4.00
January 5 Purchases 200 units @ Rs. 4.25
January 12 Purchases 150 units @ Rs. 4.10
January 20 Purchases 300 units @ Rs. 4.50
January 25 Purchases 400 units @ Rs. 4.00.
Details of issues in units :
January 4 – 200 units
January 10 – 400 units
Details of issues in units :
January 15 – 100 units
January 19 – 100 units
January 25 – 200 units
January 30 – 250 units.
11. Enumerate the differences between management accounting and financial accounting.
12. Due to industrial depression, a plant is running at present at 50% of its capacity. The following details are available :
Cost of production per unit (Rs.)
Direct material 2
Direct labour 1
Variable overhead 3
Fixed overhead 2
Production per month 20,000 units
Total cost of production Rs. 1,60,000
Sales price Rs. 1,40,000.
As exporter offers to buy 5,000 units per month at the rate of Rs. 6.50 per unit and the company hesitates to accept the offer for fear of increasing its already large operation losses.
Advice whether the company should accept of decline this offer.
13. A limited company has under consideration the following two projects. The details are as under.
Particulars : Project X (Rs.) Project Y (Rs.)
Investment in machinery 10,00,000 15,00,000
Working capital 5,00,000 5,00,000
Life of machinery 4 years 6 years
Tax rate 50% 50%
Scrap value 10% 10%
Income before Depreciation
and Tax : Rs. Rs.
Year 1 8,00,000 15,00,000
Year 2 8,00,000 9,00,000
Year 3 8,00,000 15,00,000
Year 4 8,00,000 8,00,000
Year 5 –– 6,00,000
Year 6 –– 3,00,000
You are required to calculate the ARR and suggest which project is to be preferred.
14. Prepare manufacturing over head budget at 50% and 70% capacities. The following data is given for 60% capacity :
Particulars Amount
(Rs.)
Variable overhead
Indirect material 6,000
Indirect labour 18,000
Semi variable overhead
Electricity (40% fixed) 30,000
Repairs (20% variable) 3,000
Fixed overhead
Depreciation 16,500
Insurance 4,500
Salaries 15,000
15. The following details are taken from the books of an
oil mill for one month ended 31st March, 1998 :
Purchase of 100 tonnes of oil seeds at Rs. 1,000 per tonne.
Crushing Refining Finishing
Rs. Rs. Rs.
Wages 1,000 700 900
Sundry stores 200 600 100
Electricity 400 350 200
Steam 300 250 200
Factory expenses 500 400 300
Containers –– –– 2,350
60 tonnes of crude oil were produced
51 tonnes of oil were produced in the refining process
50 tonnes of refined oil were furnished for delivery
Empty bags of oil seeds were sold for Rs. 100
35 tonnes of oil cake were sold at Rs. 60 per tonne
Loss in weight in crushing 5 tonnes
8.5 tonnes by products from refinery process were valued at Rs. 2,550
Make out account in respect of each process.
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