Dibrugarh University - Cost Accounting 2000

Answer any five questions:

1. Distinguish between Cost and Financial Accounting and enumerate the advantages of a good system of cost accounting. 10+10

2. Write in brief on each of the following: 5x4
a)      Bin cards
b)      Perpetual inventory system
c)       Purchase requisition
d)      Minimum reorder level

3. Explain the time wage system and the piece rate system of wage payments. 10+10

4. What is the meaning of the term ‘overhead’? Explain fixed, variable and semi-variable overhead.  5+5+5+5

5. In respect of a factory the following figures have been obtained for the year 1998:
                Cost of materials                                                              3, 00,000
                Direct wages                                                                      2, 50,000
                Factory overheads                                                          1, 50,000
                Administrative overheads                                            1, 68,000
                Selling overheads                                                            1, 12,000
                Distribution charges                                                           70,000
                Profit                                                                                     2, 10,000
     A work order has been executed in 1999 and the following expenses have been incurred: Materials Rs 4,000 and Wages Rs 2,500. Assuming that in 1999 the rate of factory charges has increased by 20%, distribution charges have gone down by 10% and selling and administrative charges have each gone up by 12 ½ %. At what price should the product be sold so as to earn the same rate of profit on the selling price as in 1998? Factory overheads are based on direct wages while all other overheads are based on factory cost.     8+4+8

6. The product of a manufacturing concern passes through two processes A and B and then to finished stock. It is ascertained that in each process 5% of the total weight is lost and 10% is scrap, which from processes A and B realise Rs 80 per tonne and Rs 200 Per tonne respectively. The following are the figure relating to both the processes:             8+8+4

                                                                                                                Process A                                            Process B
                Materials (tones)                                                             1000                                                       70
                Cost of materials (Rs per tonne)                                125                                                         200
                Wages (Rs)                                                                         28,000                                                   10,000
                Manufacturing (Rs)                                                         8,000                                                     5,250
                Output (tones)                                                                 830                                                         780

    Prepare the process cost account showing cost per tonne of each process. There was no stock or work-in-process in any process.

7. During the first week of April, 1999, a worker Mr. Kalyan manufactured 300 articles. He received wages for a guaranteed 48 hours week at the rate of Rs 4 per hour. The estimated time to produce one article is 10 minutes and under the incentive scheme the time allowed is increased by 20%.                4+7+9
Calculate his gross wage according to –
a)      piece work with a guaranteed weekly wage;
b)      rowan premium bonus;
c)       Halsey premium bonus 50% to workman.

8. The standard materials cost to produce one tonne of chemical X is –
                300 kg of material A @ Rs 10 per kg;
                400 kg of material B @ Rs 5 per kg;
                500 kg of material C @ Rs 6 per kg;

    During a period, 100 tonnes of mixture X was produced from the usage of –

                35 tonnes of material A at a cost of Rs 9,000 per tonne;
                42 tonnes of material B at a cost of Rs 6,000 per tonne;
                53 tonnes of material C at a cost of Rs 7,000 per tonne.

Calculate the cost, price, usage, mix and yield variances.               2+3+5+5+5