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Anil Surendra Modi School of Commerce / School of Commerce

Academic Year: 2022-23 ``..a

Progran: B.B.A. Year: I Semester: II

Subject: Cost Accounting Batch: 2022-25

Time: J1: ro aJn to Oopm

Date: £q / Of / 2023
Marks: 50 No.ofpag=:_I-7_
Final Examination

Instructions: Candidates should read carefully the instructions printed on the question paper and on
the cover of the Answer Book, which is provided for their use.

1. Question I is compulsory.
2. Attempt any TIREE questions from the remaining questions.
3. In all FOUR questions to be attempted. Figures in brackets indicate full marks.
4. All sub-sections of each question must be attempted together.
5. Working notes must form an integral part of your answer. Make necessary Assumptions if needed.
6. Use of Simple and Scientific Calculators is allowed

Q1) CLO-2; BL-4

Merchant & Co. is a manufacturing concern. From the details furnished below you are required to
calculate and compute the composite machine hour rate for a period of 1 month for the machine
mentioned below :

Purchase price of the machine (depreciation @,12% p.a.) Rs. 3,24,000

Normal working hours for the month at 100% capacity 350 Hours
Wages of machine man Rs.120 for 8 hour
Supervisor's salary per month (Common to seven machines) Rs. 21,000
Lichting charges for the month Rs. 7,800
Repairs & maintenance (machine) including cousumable stores Rs. 2,86,650 a.a.
Insurance of plant & Building (apportioned to the machine) for the year Rs. 20,400
Other general expenses Per annum (apportioned to the machine) Rs. 30,000
Power 25 units per hour at Rs. 2 per unit.

Additional information -

1. During the current month, the machine is working at 80% capacity. In this month, the set up
time of the machine is 13 hours and maintenance time is 7 hours. No power is consumed during
maintenance and set up time, but set up time is considered to be productive.
2. The machine man is paid a fixed allowance of Rs.1,200 per month,
3. Production bonus payable to the machine man is equal to 33-I/% of wages.
4. Two attendants control the operations of the machine together with 6 other machines. Their
combined monthly wages are Rs. 7,840,
5. Fixed allowance and Bonus is not paid to supervisor or attendants.
6. From the financial records of the company, you have been provided data which says that the
company actually worked for 3,300 hours productively for the entire year and the actual
overheads and direct wages incuned in totality were Rs. 7,58,000.

You are also required to compare the actual data with the estimated data and calculate the total amount
of over or under absorbed overheads. (14 marks)

1
Q2) a) CLO-2; BL-3

The Stores Manager ofMarcus and Company The followings provides the following details of receipts
and issues of a material of its manufacturing department. The stock on lst May 2022 was 1500 units
@ 5.00 per unit.

Date (2022) Quantity qunits) Rate Per Unit (0

May-04 Issued 1000 units
May-10 1500 5.00

May-20 2500 5.00

.Jun-05 1200 6.00

Jun-10 Issued 1400 units

Jun-17 1300 5.00

Jun-26 Issued 1600 units

Jut- 1 1 1200 5.50

Jut-15 Issued 1300 units

Jut-24 1200 5.00

As per the policy of the company the issues are to be priced on the basis of weighted average method.
On verification of the stock, it was found that there is a shortage of 100 units on 31 st July 2022. You are
required to determine the value of closing stock by preparing a Stores Ledger Account.

(8 Marks)

b) CLO-2; BL-3
In manufacturing a finished product called REXA, a company uses two raw materials ESS and TEE, in
respect of which the following infomation is supplied.
One unit of REXA requires 12 kgs of ESS and 8 kgs of TEE materials. Price per kg ofESS material is
Rs.15 and that of TEE is Rs. 25. Re order quantities of A and 8 materials are 24,000 kgs and 18,000
kgs. Weekly production oflHXA varied from 200 units to 300 units. Delivery period of ESS material
is 2 to 4 weeks and TEE material is 3 to 5 weeks.
You are required to determine the Maximum Level, Minimum Level, Average Stock Level.
(4 Marks)

Q3)

a) CLO-I, CLO-2; BL-3

From the books of accounts of M/s. Teja Enterprises, following details have been extracted for the
year ending 31 st Dec, 2022. The company could sell 2,40,000 units during the year.

Particulars Amount as.)

Opening stock of raw material 2,88,000

Closing stock of raw material 3,00,000

Direct labour cost 5,43,000

 Administrative overheads 2,98,000
Opening Stock of finished goods (30,000 units) 2,04,000
Goods available for sale (2,90,000 units) 21,54,000

Factory overhead recovery rate on the basis of Direct Labour 33 1/3%

Selling overheads per unit Rs.1.50

Youarerequiredtoexaminethedataaboveandpreparecostsheetforthefirmfromtheaboveassuming
the company earns a profit of 20% on sales.
(8 marks)

b) CLO-2; BL-4

A manufacturing company disclosed a Net Loss of Rs. 5,72,000 as per their Cost Accounts for the year
ended March 31, 2023 . The following infomation was revealed as a result of scrutiny of the figures of
both the set of Books.

(i) Factory overheads over-absorbed Rs. 16,000

(ii) Administration overheads under absorbed Rs. 24,000
(iii) Depreciation charged in Financial Accounts Rs. 2,20,000
(iv) Depreciation charged in cost Accounts Rs. 2,45,000
(v) Interest on Investments not included in cost Accounts Rs. 64,ooo
(vi) Income Tax provided Rs. 1,54,000
(vii) Interest on loan funds in Financial Accounts Rs. 2,63,000
(viii) Transfer fees Rs. 16,000
(ix) Over valuation of opening stock ofFinished
GOods in cost BOoks Rs. 8,000

Based on the above information, you are required calculate the Profit/qoss) as per Financial Accounts
by preparing a Reconciliation statement. (4 marks)

Q4) CLO-2; BL-5

Sandhu Metals Ltd provides you with the following information for its second Process, `Process 8' . You
are required to assess the data given below and prepare Process a account along with statement of
Equivalent Production, Statement of Cost per Unit and Statement of Evaluation. The company follows
FIFO method of valuation.

Opening work-in-progress 2 000 units 4,50,000

Transferred from process A 8000 units 7,17,500
Material added during the process 4,42,000
Labour 3,90,600
Overheads 1,91,400
Units scrapped 1000 units
Closing work-in-progress 3000 units
Realizable Scrap Value Rs. 5/- p.u.

Nomal Loss: 10% of units produced

 Degree of completion: Opening un closing vur S crapped units
Material 800/a 70% 100%
Labour 60% 500/o 700/o
Overheads 50% 400/o 600/a

(12 marks)

Q5) CLO-2; BL-3, BL-5

Elcome Coustructious limited were engaged in two construction contracts in the year 2022-2023. The
following are the particulars for the year ended 31st Marcb, 2023.

Contract A Contract 8
Date of commencement of contract |S' April 2022 1 St october,2022
7,50,000 6.25.000
Contract price
2,00,000 75,000
Material issued
5,000 2,500
Material retuned
27,500 10,000
Material at site (Year end)
1,75,000 46.875
Direct Labour paid
Direct expenses 82,500 43,750
35,000 11.250
Establishment expenses paid
Plant installed at cost 1,00,000 87,500
2.500 1,250
Architect' s fees Paid
Cost of work vet not certified 28.750 12,500

Cash received from Contractee 4,72,500 1,56,000

Prepaid establishment expenses 3,750 2,500
Direct Labour outstanding at Year end 12.500 5,625

TheCompanyhasreceivedpaymeutof90%oftheworkcompletedandcertifiedincaseofContractA
and 80% in case of Contract 8. Besides, material costing Rsl 1,250 has been transferred from Contract
A to Contract 8, as there was an urgent requirement. Plant is subject to depreciation at 10%p.a.

Prepare Contract Account for the two contracts for the year ended 3 lst March, 2023 and calculate the
profit to be transferred to the Costing Profit and Loss Account. Also, show extract of Balance sheet as
on that date, posting the relevant figures only in reference to treatment of work-in-progress.

(12 Marks)