COST ACCOUNTING 2004 (Regular)

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COST ACCOUNTING 2004 (Regular)

 

Time : 3 Hours                Max. Marks:100

 

Instructions: Attempt any FIVE questions.

1. a) What are the objectives and scope of Cost Accounting?

b) Explain briefly the two distinct types of Cost Accounting System OR Differentiate between Financial and Cost A/c.(10)

 

2. MANUFACTURING COST:

From the following Partial information completes the Income Statement: (20)

Sales ?
Less: Cost of Goods Sold
Opening inventory Finished goods 60,000
Add: Cost of Goods Manufactured ?
Loss: Finished goods Inventory ending ?
Cost of Goods Sold ?
Gross Profit (41.25% of Sales) ?
Less: Operating Expenses ?
Net Income 26 ²/3 % of Sales 640,000

 

The other information is as under:

 

Raw Material used Rs.5,30,000, Direct Labour Rs.4,50,000 Factory over head 50% of Prime Cost. The work-in-process were opening Rs.1,20,000, Closing Rs.1,10,000.

 

REQUIRED:

Determine the missing figures and complete the income statement show computation.

 

3. XYZ corporation manufactures a product to sell at Rs.560 last Year Company sold 4000 of these units realizing a Gross Profit of 25% the cost of sales comprises Material

40% Labor 45% and remaining for factory Overhead. During the incoming year it is expected that material and labor cost increase by 25% while the Factory Overhead by 12.5%

To meet the rising cost a new selling price is set at Rs.600 and Rs.700 per unit. (20)

 

REQUIRED:

(i) The units that must be sold to realize the same Gross Profit as last year.

(ii) The units that must be sold to realize 20% more Gross Profit than last year.

4. JOB ORDER COSTING:

Raza Corporation produces special products to customer’s specifications and uses job Order Cost System. The following transactions relates to its operations for the month of December 2003. (20)

(i) Purchase of Raw material on Account Rs.50)000.

(ii) Material issued to production Rs.66,000 out of which Rs.6,000 was used indirectly.

(iii) Labor used Direct Rs.1,00,000 indirect Rs.10,000.

(iv) Factory Overhead cost increased Rs.80,000.

(v) Factory Overhead applied 100% of Direct Labor Cost

(vi) Jobs were completed to the extent of 95%

(vii) Goods sold on Account Rs.172,500, including G.S. @ 15%

(ix) Finished goods inventory valued at Rs.15,000.

 

REQUIRED:

Pass necessary Journal Entries and close the Factory Overhead Account.

  1. 1.      DEPARTMENTALIZATION OF OVERHEAD:

NOT INCLUDED IN THE NEW COURSE

 

6. a) What are the basis of applying factory overhead rate?

6.(b) FACTORY OVERHEAD VARIANCE:

The annual Factory Overhead of a Company for an expected output of 360000 units were as: (05+1 5)

Fixed Overhead Rs. 72,000

Variable Overhead Rs. 216,000

 

Output for the month of January was 20,000 units and actual F.O.H. were Rs.15,400.

 

REQUIRED:

(i) The Overhead rate per unit

(ii) Spending Variance.

(iii) Idle Capacity Variance.

 

7.(a) MATERIAL LOSSES:

NOT INCLUDED IN THE NEW COURSE

 

7.(b) Differentiate between spoiled, defective and scrap goods.

NOT INCLUDED IN THE NEW COURSE

 

8.(a) MATERIAL INVENTORY SYSTEM:

NOT INCLUDED IN THE NEW COURSE

 

9. PROCESS COSTING:

The following information relates to the Goods in Process No.3 of Mustafa Manufacturing for the month of November 2004. (20)

 

Goods in process Inventory No. 1, (40000 units 100% complete as to material and 75% Complete as to conversion cost) Rs.7,74,000
Cost of 140000 units transferred in
From Process No. 2 during November Manufacturing cost added in process No.3, during November Rs.14,00,000
Direct Material Rs. 5,60,000
Direct Labour Rs. 2,50,000
F.O.H. Rs. 7,50,000
Rs. 37,34,000

On Nov. 30, 50,000 units are still in process No.3 which are 100% complete as to material and 50% complete as to conversion cost.

 

REQUIRED:

a. (i) Equivalent Units of Production.

(ii) Cost per unit

(iii) Cost of Units transferred out of Finished Goods using FIFO.

(iv) Cost of Units in Process on Nov.30, 2004.

 

(b) General Journal Entries to record:

(i) Transfer of 140000 units from Process No.2 to Process No.3

(ii) Manufacturing Cost added in Process No.3 during Nov.

(iii) Transfer of I 30000 units from Process No.3 to finished good warehouse.

Is proceed to investigate not one level of feminine incompetence as strict as the ability to.
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