Dibrugarh University - Cost Accounting 2001

Answer any five questions:

1. ‘Cost Accounting is beneficial to varied sections of society.’ Elaborate.               20

2. The books and record of Anand Manufacturing Company present the following data for the month of August, 2000:

    Direct labour cost Rs 16,000 (160% of factory overhead)
    Cost of goods sold Rs 56,000
    Inventory accounts showed these opening and closing balances:

                                                                                                                August 1                                              August 31
                                                                                                                     Rs                                                            Rs
                Raw materials                                                                    8000                                                       8600
                Work-in-progress                                                            8000                                                       12000
                Finished goods                                                                  14000                                                    18000
      Other data:
                Selling expenses                                                                                                                              3400
                General and administration expenses                                                                                    2600
                Sales for the month                                                                                                                        75000

 You are required to prepare statement showing cost of goods manufactured and sold and profit earned.            10+10

3. What is perpetual inventory system? Why control of material is cost an essential of a good cost accounting system?                10+10

4. What is idle time? Why is it caused? How is it controlled? 6+7+7

5. What are the principles of allocation and apportionment of overheads? With the help of a chart, show the classification of overheads. 10+10

6. a) During one week, the workman X manufactured 200 articles. He receives wage for a guaranteed 44-hour week at the rate of Rs 15 per hour. The estimated time to produce one article is 15 minutes and under incentive scheme the time allowed is increased by 20%. Calculate his gross wages under each of the following methods of remuneration:  
(i)      Time rate
(ii)    Piece work with a guaranteed weekly wage
(iii)   Rowan premium bonus
(iv)  Halsey premium bonus, 50% to workman

   b) What factors should be considered in a particular incentive system?               2+3+5+5+5

7. Product B is obtained after it passes through three distinct processes. The following information is obtained from the accounts for the week ending February 12, 2001:

                                Items                                    Total                                      I                               II                             III
                                                                                Rs                                           Rs                           Rs                           Rs
                Direct material                                  7542                                       2600                       1980                       2962
                Direct wages                                      9000                                       2000                       3000                       4000
                Production overhead                     9000
1000 units at Rs 3 were introduced to Process I. There was no stock of materials or work-in-progress at the beginning or end of the period. The output of each process passes direct to the next process and finally to finished stores. Production overhead is recovered on 100% of direct wages. The following additional data are obtained:
                Process                                Output during the week           % of normal loss to input              Value of scrap per unit (Rs)

                Process I                              950                                                         5%                                                          2
                Process II                             840                                                         10%                                                        4
                Process III                           750                                                         15%                                                        5

Prepare process cost accounts and abnormal gain or loss accounts. 2+2+2+2+2+2+8        

8. XYZ company manufactures a product ABC by mixing three raw materials. For every 100 kg of ABC, 125 kg of raw materials are used. In April 2000, there was an output of 5600 kg of ABC. The standard and actual particulars of April 2000 are as follows:

                Raw material                                                      Standard                                                              Actual
                                                                                                Mix        Price/kg                                               Mix        Price/kg
                                                                                                %            Rs                                                           %            Rs
                Raw material I                                                   50           40                                                           60           42
                Raw material II                                                  30           20                                                           20           16
                Raw material III                                                 20           10                                                           20           12                                          
                Calculate all variances.                                                                                                                                                                   20