# M.Com Previous Year Question Papers: Cost and Management Accounting (August' 2010)

2010 (August)
Paper: 103
Full Marks: 80
Time: 3 hours

1.       (a) What is activity-based costing? Discuss how it can be implemented in any industry with which you are familiar.   6+10=16

Or
(b) What do you understand by cost reduction? Indicate the areas of cost reduction campaign.   7+9=16

2.       (a) Mr. Dutta has started a transport business with a fleet of 10 taxis. The various expenses incurred by him are given below:  16
(i)      Cost of each taxi Rs. 75000
(ii)    Salary of office staff Rs. 1500 p.m.
(iii)   Salary of garage staff Rs. 2000 p.m.
(iv)  Rent of garage Rs. 1000 p.m.
(v)    Driver’s salary (per taxi) Rs. 400 p.m.
(vi)  Road tax and repairs (per taxi) Rs. 2160 p.a.
(vii) Insurance premium                @ 4% p.a. on the cost of vehicle.
The life of a taxi is 300000 km and at the end of which it is estimated to be sold at Rs. 15000. A taxi runs on an average 4000 km per month of which 20% it runs empty. Petrol consumption is 9km per litre of petrol costing Rs. 6.30 per litre. Oil and other sundry expenses amount to Rs. 10 per 100 km.
Calculate the effective cost of running taxi per km. If the hire charge is Rs. 1.80 per km, find out the profit Mr. Dutta may expect to make in the first year of operation.
Or
(b) From the following information, find out the profit made by each product, apportioning joint costs on the sales – value basis      16
 Joint Cost Amount (Rs.) Direct Materials Power Petrol, Oil, Lubricants Labour Other charges 126000 25000 5000 7500 4100 Particulars Product X Product Y Selling Costs Sales 20000 152000 80000 168000

3.       (a) From the following Balance sheet of A. Ltd., Prepare a position statement as on that date and comment on the financial position of the company:    16
Balance Sheet of A Ltd. As on 31st December, 2010
 Liabilities Amount Assets Amount Share Capital Authorised: Issued and Subscribed: 15000 equity shares of Rs.10/- each called up Reserves and Surplus: Capital reserve General Reserve Secured and Unsecured Loans Current Liabilities 150000 40000 30000 80000 45000 Fixed Assets: Plant and Machinery Other Fixed Assets Investments (Long Term) Current assets 105000 85000 25000 130000 Total 345000 345000

Or
(b)Explain trend percentages as a tool of analysis highlighting on methods of calculation, advantages, limitations and precautions to be taken.  5+5+6=16

4.       (a) The profit of a company is Rs. 50,000 after charging interest of Rs. 6000 on debentures and providing Rs. 24000 for taxes, the assets of the company consists of fixed assets Rs. 200000, current assets Rs. 600000 and preliminary expenses Rs. 30000, Discount on issue of debenture is Rs. 10000. Compute the return on capital employed.  16
Or
(b) What is ratio analysis? State the objects of Balance sheet ratios.  5+11=16

5.       (a) In calculation of figures for working capital projection, what are the time lag for payments to creditors for goods and time lag in payment of expenses and how they are calculated?   8+8=16
Or
(b) Show the classification of working capital on different basis, depending on the purpose of analysis.  16