COST ACCOUNTING 2004 (Private)
Time : 3 Hours Max. Marks:100
Instructions: Attempt any FIVE questions.
Note: Attempt Five Questions.
1 .a) What are the objectives of Cost Accounting? (05)
b) Differentiate between Management, Cost Accounting & Financial Accounting. (15)
2. Accounting for manufacturing operation: (20)
The following data relate to a manufacturing company for the year 2003
Purchase of Direct Material Rs.4,40,000
Direct Material used Rs.4,50,000
Direct Labour paid during the year Rs.3,25,000
Direct Laboru assigned to Production Rs.3,50,000
Manufacturing Overhead Rs.4,00,000
During the year 1,22,000 Units were manufactured and 1,25,000 Units were sold. Selected information concerning Inventories during the year is as follows:
|Dec. 31st||Jan. 1st|
|Materials||Rs. ?||Rs. 50,000|
|Work in process||Rs.70,000||Rs. 90,000|
|Finished good||Rs. ?||Rs.135,000|
|(15000 Units beginning)|
(a) Cost of Goods Manufactured.
(b) Average Unit Cost.
(c) Cost of Goods Sold assuming FIFO method.
(d) Ending Inventories of (i) Material. (ii) Finished good.
3. Factory and General Ledger: (20)
NOT INCLUDED IN THE NEW COURSE
4. Job Order costing: (20)
The following information relates to a manufacturing company
1. Purchase of Direct Material on Account Rs.175,000
2. Direct Material used Rs.160,000
3. Direct Labour used. Rs.100,000
4. Direct Labour paid Rs. 95,000
5. Factory Overhead incurred on Account Rs. 77,000
6. Factory Overhead is applied at 80% of Direct Labour.
7. Jobs with total cost of Rs.300,000 were completed.
8. Units costing Rs.2,80,000 were sold on Account for Rs.3,40,000
Give Journal Entries for the above transaction
5. Variance analysis — standard costing: (20)
The standard and actual cost data of Mustafa Ltd are as follow
|Direct Materials||5000 Kg. @ Rs.10||6000 Kg. @ Rs.12|
|Direct Labour||2000 Hours @ Rs.5.50||l800Hours @ Rs.6|
|Factory Overhead||Rs. 50,000||50,000|
REQUIRED: (a) Calculate:
(i) Material Price variance and material Quantity Variance.
(ii) Labour rate variance and Labour time variance.
(iii) Overhead variance.
(b) General Journal entries to record the above information and to close the variance account.
6.(a) & (b) Material Losses:
NOT INCLUDED IN THE NEW COURSE
7. Factory overhead costing: (20)
NJM Company estimated its Factory Overhead for the next period at Rs.800,000. It is Estimated that 2,00,000 Units will be produced at a material cost of Rs.10,00,000. Production will require 2,00,000 man hours at an estimated wages cost of Rs.4,00,000. The machine Will run about 1,25,000 hours.
The factory Overhead rate that may be used in applying factory overhead to production an each of the following basis.
(i) Material Cost.
(ii) Direct Labour Cost.
(iii) Direct Labour Hours
(iv) Machine Hours.
8. Process costing: (20)
The information below relate to a production operated by RAZA Corporation during the month of October 2003.
Beginning inventory in process Rs. 90,800
Raw material used 148,800
Direct Labour used. 180,000
Applied Factory Overhead (90% of Direct Labour Cost) 162,000
Production report for October 2003 Units in Process October 1M (100% complete as to
Material 50% complete to conversion cost) 12,000
Units put into process during October 64,000
Units Completed and transferred to next department. 56,000
Units in Process October 30 (90% complete as to material 50% complete as to conversion cost) 20,000
(i) Equivalent Production in Units.
(ii) Cost of One Unit.
(iii) Cost of Units transferred to next department (Use FIFO Method).
(iv) The value of Units in Process on Oct. 30, 2003
(b) Give Journal Entries to record the cost allocated to Production &the cost of Units completed during Oct. 03
9. a) How do standard Costing assist managers to control Cost of Production: (05)
b) Why is it important for management to understand Cost Volume Profit relationship? (05)
c) What are various methods of Labour Remunerations? Explain in brief. (05)
d) Write short notes on: (05)
(i) ABC Analysis
(ii) Stock Levels.
(iv) Perpetual Inventory System.