Wednesday, August 21, 2019

M.Com Previous Year Question Papers: Cost and Management Accounting (August' 2015)


2015
(August)
COMMERCE
Paper: 103
(Cost and Management Accounting)
Full Marks – 80
Time – Three Hours
The figures in the margin indicate full marks for the questions.

1. (a) Define ‘Costing’ and ‘Cost accounting’. Describe the importance of cost accounting as a managerial tool. 2+4+10=16

Or
(b) Describe the benefits and limitations of Activity-based costing.                     8+8=16
2. (a) (i) Distinguish between Job costing and Process costing                      8
(ii) The following data relate to a manufacturing concern:
Production
Cost of production
Normal loss
Actual loss
Scrap value
= 1,000 units
= Rs. 1,850
= 10% of production
= 150 units
= Re. 0.50 per unit

Prepare Process Account and Abnormal Loss Account                          8
(b) Why it is necessary for reconciliation of cost and financial accounts? State the reasons for differences between profits shown by both the sets of accounts.                                       6+10=16
3. (a) Prepare a comparative Balance Sheet of X Co. Ltd. from the following data and show the trend percentages:       16
(Amount in lakhs of Rupees)

2010
2011
2012
2013
2014
Liabilities and owners’ Equity:
Reserves
Long term liabilities
Current liabilities
100
73
304
213
100
78
316
183
135
125
332
235
135
125
425
264
170
96
478
307
Total Liabilities
690
677
827
949
1,051

Assets
2010
2011
2012
2013
2014
Fixed Assets
Current Assets
Investments
154
524
12
182
482
13
221
591
15
270
631
48
309
689
53
Total Assets
690
677
827
949
1,051

Or
(b) What is Common-size Statement? What are its objectives? Describe the utility of such a statement.          4+6+6=16
4. (a) “Ratios are mechanical and incomplete.” Comment on this statement giving justifications in support of your answer.                                                 16
Or
(b) From the following Balance Sheet of a company, you are required to calculate the ratios as given below –
1)      Debt-Equity Ratio.
2)      Equity Ratio.
3)      External Equities to Total Assets Ratio.
4)      Fixed Assets or Net Worth Ratio.
5)      Current Assets to Net Worth Ratio.                                                         4+(3x4)=16
Balance Sheet
As at ………………
Liabilities
Rs.
Assets
Rs.
3,000 Equity shares @ Rs. 100 each
7% Debentures
Reserve & Surplus
Sundry Creditors
Bills Payable
3,00,000
1,50,000
80,000
30,000
50,000
Buildings
Furniture
Machinery
Stock
Debtors
Cash balances
2,50,000
40,000
2,10,000
60,000
30,000
20,000

6,10,000

6,10,000

5. (a) Explain the meaning of working capital. Describe the factors that affect the amount of working capital requirement.                                                 6+10=16
Or
(b) Prepare a statement showing the working capital needed to finance a level of activity of 3,00,000 units of output for the year. The cost structure for the company’s product for the above mentioned activity level is detailed below –
Elements of Cost
Cost per unit

Raw materials
Direct labour
Overheads
Rs.
20
5
15
Total cost
Profit 
40
10
Selling price
50

Raw materials are held in stock, on an average for two months. Work-in-progress will approximate to half-a-month’s production. Finished goods remain in warehouse, on an average, for a month. Suppliers of materials extend one month’s credit. Two months credit is normally allowed to debtors. A minimum cash balance of Rs. 25,000 is expected to be maintained. The production pattern is assumed to be uniform during the year.                                  16
***

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