Reg. No ..................... Name ...............................

24U609

B.COM DEGREE END SEMESTER EXAMINATION - MARCH 2024

SEMESTER 6 - COMMERCE
COURSE : 19U6CRCOM19 - APPLIED COST ACCOUNTING
(For Regular - 2021 Admission and Supplementary -2020/2019 Admissions)
Time : Three Hours Max. Marks: 75
PART A
Answer any 10 (2 marks each)
1. From the following informa�on, find out P/V ra�o and margin of safety:
Sales Rs.10,00,000
Variable cost Rs.4,00,000
Fixed cost Rs.4,00,000
2. A customer has been ordering 60,000 special design metal columns at the columns at the rate of
18,000 per order during the past years. The produc�on cost comprises `120 for material, ` 60 for
labour and `20 for fixed overheads. It costs ` 1500 to set up for one run of 18,000 column and
inventory carrying cost is 15% since this customer may buy at least 5000 columns this year, the
company would like to avoid making five different produc�on runs. Find the most economic
produc�on run.
3. Dis�nguish between forecast and budget.
4. Calculate work cer�fied if: (a) contract price Rs. 4,00,000 work cer�fied 80%. (b) Cash received Rs.
8,00,000 being 80% of work cer�fied.
5. Explain the main features of job cos�ng.
6. What is cost volume profit analysis?
7. A truck starts with a load of 10 tonnes of goods from sta�on P. It unloads 4 tonnes at sta�on Q and
rest of the goods at sta�on R. It reaches back directly to sta�on P a�er ge�ng reloaded with 8
tonnes of goods at sta�on R. The distances between P to Q, Q to R and then from R to P are 40, 60
and 80 km respec�vely. Compute absolute tonne-km and commercial tonne -km.
8. State the important func�ons of budget commi�ee.
9. When coal is converted into coke, what are the main products which arise? Which of these will be
main product or by- products?
10. What is break even point?
11. Explain the procedure of contract cos�ng.
12. Find out abnormal loss/gain units
Input : 5,000 units , Normal Loss : 20% , Output : 4,300 units
(2 x 10 = 20)
PART B
Answer any 5 (5 marks each)
13. Explain cost volume profit analysis.
14. The following costs were incurred on job number 1350
Direct materials 14,050
Direct wages Department A - 30 hours at ₹20 per hour
Department B -40 hours at ₹18 per hour
Department C -25 hours at ₹30 per hour
Overheads for the three departments were es�mated as follows
Department A ₹15,000 for 3000 hours
Department B ₹10,000 for 2500 hours
Department C ₹6000 for 2000 hours
Fixed overheads are es�mated at ₹12,000 for 10,000 working
hours.

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 You are required to calculate the cost of job number 1350 and the price of job to give profit of 25
percentage on selling price.
15. From the following par�culars calculate:
a) contribu�on b) P/V ra�o c) BEP in units and rupees
d) What will be the Selling Price per unit if the BEP is brought down to 25,000 units?
e)How many units are to be sold to earn a net income of 20% on sales?
Fixed Cost = 1,50,000 variable cost per unit = 10 Selling Price per unit = 15
16. A transport company is running 4 buses between two ci�es which are 50 kms apart. Sea�ng
capacity of each bus is 40 passengers. The following par�culars were obtained from their books for
the month of April 2019:
Rs.
Wages of Driver, conductor and cleaner 1,20,000
Salaries of office and supervisory staff 50,000
Cost of diesel and oil 2,00,000
Repairs and Maintenance 40,000
Insurance and tax 80,000
Deprecia�on 1,30,000
Interest and other expenses 1,00,000
---------------
7,20,000
Actual passengers carried were 75% of the sea�ng capacity. All the four buses run on all the days
for the month. Each bus made one round trip per day. Find out cost per passenger kilometre.
17. Write a note on performance budge�ng.
18. a) Dis�nguish between joint product and by-products?
b) What are the different methods of alloca�ng joint costs and accoun�ng for by-products.
19. ABC Company Ltd has given the following par�culars. You are required to prepare a cash budget
for the three months ending 31st December 2013:

a)
Months Sales Materials Wages Overheads
Aug 20,000 10,200 3,800 1,900
Sep 21,000 10,000 3,800 2,100
Oct 23,000 9,800 4,000 2,300
Nov 25,000 10,000 4,200 2,400
Dec 30,000 10,800 4,500 2,500

b) Credit terms are:

Sales/Debtors -10% sales are on cash basis,50% of the credit sales are collected next month and
the balance in the following month:
Creditors -Materials 2 months
-Wages 1/5 month
-Overheads ½ month
c) Cash balance on 1st October,2013 is expected to be Rs.8000.
d) A machinery will be installed in August,2013 at a cost of Rs.1,00,000.The monthly Instalment of
Rs.5000 is payable from October onwards.
e) Dividend at 10% on preference share capital of Rs.3,00,000 will be paid on 1st December2013.
f) Advance to be received for sale of vehicle Rs.20,000 in December.
g) Income Tax (advance) to be paid in December Rs. 5000.

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20. What is abnormal loss and abnormal gain? Explain the treatment of abnormal loss and abnormal gain
in process cost accounts.
(5 x 5 = 25)

PART C
Answer any 3 (10 marks each)
21. Mr. Varma undertook a contract for construc�ng a building at a contract price of Rs 1,00,000. His
account books show the following regarding this contract for the year ended 31/12/2021
Rs
Materials issued from store 20,000
Wages paid 8,000
Wages outstanding 1,000
Plant issued to contract on 1/7/2021 for a period of six 40,000
months only
Indirect expenses 2,000
Sub contract costs 5,000
Materials at site at the end 2,000
Cash received being 90% of the work cer�fied 54,000
Work done but not yet cer�fied 3,000
Plant cos�ng Rs 5,000 was sold on 31/10/2021 for a sum of Rs 4,000 .The plant is to be valued a�er
charging a deprecia�on of 12% p.a
Extra work was done and completed on this contract (not included in the terms of the contract). A
sum of Rs 6,000 was agreed to be paid for it separately, and the cost of this work to the contractor
was Rs 4,500 only.
Prepare contract account and show the amount of profit to be credited to profit and loss account
reasonably on cash received basis.
22. A company manufactures and markets three products A, B and C. All the three products are made
from the same set of machines. Produc�on is limited by machine capacity. From data given below
indicate the priority for products A, B and C with a view to maximizing profits.
Product A Product B Product C
Raw Material cost per unit 2.25 3.25 4.25
Direct labour cost per unit 0.50 0.50 0.50
Other Variable cost per unit 0.30 0.45 0.71
Selling price per unit 5.00 6.00 7.00
Standard machine �me required per unit 39 minutes 20 minutes 28 minutes
In the following year the company faces extreme shortage of raw materials. It noted that 3 kg, 4 kg
and 5 kg. of raw materials are require to produce one unit of A,B and C respec�vely. How would
products priori�es change?
23. What is performance budge�ng? Describe the various steps in performance budge�ng. Explain two
advantages and disadvantages.
24. The product of a company passes through three dis�nct processes to comple�on . They are known
as A, B and C. From past experiences it is ascertained that loss is incurred in each process as :
Process A—2 %; Process B—5 %; process c—10 %.
In each case the percentage of loss is computed on the number of units entering the process
concerned.
The loss of each process possesses a scrap value . The loss of processes A and B is sold at Rs. 5 per
100 units and that of process C at Rs. 20 per100 units.
The output of each process passes immediately to the next process and the finished units are
passed from process C into stock.

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 Processes
A (Rs) B (Rs.) C (Rs.)
Raw material consumed 6,000 4,000 2,000
Direct wages 8,000 6,000 3,000
Manufacturing Expenses 1,000 1,000 1,500

20,000 units have been issued to Process A at a cost of Rs. 10,000. The output of each process has
been as under:
Process A : 19,500
Process B : 18,800
Process C : 16,000
There is no work in progress in any process.
Prepare necessary accounts
25. The expenses budgeted for produc�on of 1,00,000 units in a factory is furnished below.
Rs (per unit)
Raw materials 10.08
Direct labour 3.00
Direct expenses 0.40
Factory overheads (60% fixed) 10.00
Administra�on expenses (80%fixed) 1.60
Sales overhead 0.80
Actual produc�on in the period was only 60,000 units. Prepare a budget for original and
revised level of output.
(10 x 3 = 30)

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