Cost accounting 2012
1 PGDE COM 3
2012 (AUGUST)
1.
(a) How is cost analysis done under Activity
Based Costing? /Or
(b) Explain the techniques to control and
reduce cost.
2.
(a) The net profit shown by financial accounts
of X Ltd. Amounted to Rs.37100. while the profit by cost accounts were Rs.
37320. On reconciliation of the figures, the following differences were noted:
(i)
Director’s fees note charged in cost accounts
Rs. 1140.
(ii)
Provision for bad and doubtful debts not charged
in cost accounts Rs.1140.
(iii)
Income Tax paid shown only in financial accounts
Rs. 16600.
(iv)
Overheads in cost accounts were estimated at Rs.
17000. The charge shown by financial books was Rs. 16640.
(v)
Work was started during the year on a new
factory and expenditure of Rs. 16000 was incurred. Depreciation of 10% was
provided in financial accounts.
(vi)
Bank interest received Rs. 60.
Prepare Reconciliation
Statement. /Or
(b) A product passes through three
processes:
A, b and C. 1000 units at a cost of
Rs. 1.10 were issued to process A. The other direct expenses were as follows:
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Process A (Rs.)
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Process B (Rs.)
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Process C (Rs.)
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Sundry materials
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Direct labour
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Direct expenses
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The wastage of process A was 5% and
in process B 4%. The wastage of process A was sold at Rs. 0.25 per unit and
that of B Rs. 0.50 per unit and that of C of Rs. 1.00 per unit. The overhead
charges were 160% of direct labour. The final product was sold at Rs. 10 per
unit fetching a profit of 20% on sales.
Prepare process accounts and also
find out percentage of wastage in process C.
3.
(a) Explain briefly the techniques of financial
statement analysis. /Or
(b) Explain briefly:
(i) Objectives of financial statement
analysis.
(ii) Interpretation of financial
statements.
4.
(a) From the following Balance Sheet of a
company calculate debt equity ratio, proprietory ratio and capital gearing
ratio.
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Liabilities
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Rs.
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Assets
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Rs.
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Equity capital (Rs. 100 each)
8% Pref. share capital (Rs. 100 each)
9% Debentures (Rs 100 each)
Reserves
Current liabilities
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250000
100000
200000
150000
100000
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Land and building
Plant and machinery
Stock
Debtors
Cash/Bank
Prepaid expenses
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300000
250000
120000
100000
27500
2500
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800000
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800000
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(b) Explain briefly:
(i)
Leverage ratios
(ii)
Profitability ratios
(iii)
Activity ratios.
5.
(a) A company produced 5000 units in a year and
sells thenat Rs. 100 per unit. The following ratio are available:
(i)
Raw materials 50% of selling price
(ii)
Labour 20% of selling price
(iii)
Overheads 20% of selling price
Additional information:
(i)
Production and sales cycle move regularly
(ii)
Wages are paid on the first of each month.
(iii)
Each unit is expected to be in process for 1.50
months.
(iv) Raw
materials are expected to remain in stores for 1.50 months.
(v)
Finished goods are expected to remain in
warehouse for 2 months.
(vi) Credit
allowed to debtors 2 months.
(vii) Provide
20% for safety margin.
(viii)
Credit allowed by suppliers 2 months.
You are required to prepare a
statement showing an estimate of working capital requirements. /Or
(b) Explain the importance of
working capital in business.
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