Wednesday, August 21, 2019

M.Com Previous Year Question Papers: Cost and Management Accounting (August' 2011)

2011 (August)
Paper: 103
Full Marks: 80
Time: 3 hours

1.       (a) Explain briefly the evolution of cost accounting system and cost concepts.  8+8=16

Or
(b) Briefly explain the distinction between cost control and cost reduction.  16

2.       (a) The following figures are extracted from the financial accounts of a manufacturing firm for the first year of its operation:
Particulars
Amount
Direct material consumption
Direct wages
Factory overheads
Administrative overheads
Selling and distribution overheads
Bad debts
Preliminary expenses written off
Legal charges
Dividend received
Interest on deposit received
Sales (120000 units)
Closing stock:
Finished stock (4000 units)
Work -  in – progress
5000000
3000000
1600000
700000
960000
80000
40000
10000
100000
20000
1200000

320000
240000
The cost accounts for the same period reveal that the direct material consumption was Rs. 56,00,000.  Factory overhead is recovered at 20% on prime cost. Administrative overhead is recovered @ Rs. 6 per unit of production. Selling and distribution overhead are recovered @ Rs.8 per unit sold.
You are required to prepare costing and Financial profit and loss accounts and reconcile the difference in the profits as arrived at in the two sets of accounts.  16
Or
(b) A product passes through three processes to completion. These processes are known as X, Y and Z. The output of each process is charged to the next process at a price calculated to give a profit of 20% on the transfer price. The output of process Z is charged to finished stock in a similar basis.
There was no partly finished work in any process on December 31, on which date the following information was obtained:
Particulars
Process X (Rs.)
Process Y (Rs.)
Process Z (Rs.)
Materials
Labour
Stock: Dec 31
4000
6000
2000
6000
4000
4000
2000
8000
6000
Stock in each process were valued at price cost to the process. There was no stock in hand on January 1st and question of overhead was ignored. Of the goods passed into finished stock, Rs. 4000 remained in hand on December 31, and the balance has been sold for R.s 36000. Show process accounts and calculate reserve for unrealised profits.

3.       (a) what are the different methods and devices used in analysis of financial statements? Explain one of them. 8+8=16
Or
(b)What do you understand by comparative statements? Explain its merits and demerits.  8+8=16

4.       (a) Compare the following capital structures (is Rs. ‘000)
Particulars
A Ltd.
B. Ltd.
C Ltd.
Equity share capital
10% preference share capital
Reserves and surplus
15% secured debentures
100
50
50
400
150
100
50
300
250
-----
50
300
Total
600
600
600
Assume tax rate @50%. Expected profit before interest and taxes but after all expenses and depreciation in each case Rs. 72000.   16
Or
(b) Explain the Balance Sheet ratios.

5.       (a) What is “operating cycle concept”? What steps should be taken into account while deciding the working capital requirements of an organisation?  6+10=16
Or
(b) From the following information pertaining to X Ltd, you are required to prepare a Forecast Profit and Loss account for the year ended 30th june, 2011 and Balance sheet as on that date:
Paid – up share capital
8% Debentures (Secured on assets)
Fixed assets as on 1st july, 2010
Bank overdraft as on 1st july, 2010
1000000
250000
625000
181250
Production during the previous year was 60000 units. It is expected that this level of activity would be maintained during the current year.
The expected ratios of cost of selling prices are-
Raw materials 60%, Direct wages 10%, Overheads (Including debentures interest) 20%.
Raw materials remain in store on an average for 2 months.
Materials remain in process (Valued at cost of raw materials plus 50% of direct wages and overheads) on an average for one month.
Finished goods remain in stock on an average for three months.
Credit allowed by creditors is two months and credit allowed to debtors is three months.
Selling price is Rs. 25 per unit.
You are required that there is a regular production cycle and sales cycle.  16

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