5/H–76 (xii) (Syllabus–2015) ( 2 )

2022
(iv) Maximum usage—75 units per week
( February ) each

(v) Reorder quantity—A : 300 units

COMMERCE B : 500 units
( Honours )
(vi) Reorder period—A : 4 to 6 weeks
( Cost Accounting ) B : 2 to 4 weeks
Compute (a) Maximum Stock Level,
( BC–502 )
(b) Minimum Stock Level, (c) Reorder Level,
Marks : 75 (d) Reorder Quantity and (e) Average Stock
Level. 3×5=15
Time : 3 hours
2. M Ltd. has three production departments (X,
The figures in the margin indicate full marks
Y and Z ) and two service departments
for the questions
(S1 and S 2). The following is the budget for
December 2020 :
1. Define cost accounting and discuss briefly its
objectives. Explain how it helps the Items Total X Y Z S1 S2
Direct material (R ) 30,000 3,000 6,000 12,000 6,000 3,000
management in the period of trade
Direct wages (R ) 57,000 15,000 6,000 24,000 6,000 6,000
depression and trade competition. 1+4+5+5=15 Other
overheads (R ) 27,000
Or
Depreciation (R ) 3,000
Medical Company manufactures special Factory rent (R ) 12,000
items A and B. The following particulars are Power (R ) 7,500

collected for the year, 2020 : Additional

information :
(i) Average consumption—40 units Floor area (sq.ft.) 3000 750 375 750 375 750
Capital value of
(ii) Normal usage—50 units per week each assets (R in lakhs) 150 30 60 30 15 15
Machinery hours 9000 1000 2000 4000 1000 1000
(iii) Minimum usage—25 units per week Horsepower of 150 50 30 30 15 25
each machinery

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 ( 3 ) ( 4 )

The expenses of service departments S1 and (b) In 2021, the factory receives an order
S 2 are apportioned as follows : for a number of jobs. It is estimated that
direct materials required will be
Departments X Y Z S1 S2 R 1,20,000 and direct labour cost is
S1 45% 15% 30% — 10% R 75,000. What should be the price for
S2 60% 35% — 5% — these jobs if the factory intends to earn
the same rate of profit on sales
assuming that the selling and
You are required to prepare— distribution expenses have gone up by
15%? The factory recovers factory
(a) a statement showing distribution of
overhead as a percentage of direct
overhead to various departments;
wages and administration and selling
and distribution overhead as a
(b) a statement showing redistribution of
percentage of works cost, based on cost
service department expenses to produc-
rates prevailing in the previous year.
tion department using simultaneous
7½
equation method. 7½+7½=15
3. Marak Ltd. processes a patent material used
Or
in buildings. The material is used in three
consecutive grades—soft, medium and hard.
(a) The following data are obtained from the
The following information has been obtained
books for the year ended 31-12-2020 :
regarding production :
(R)
Direct materials 90,000 Process

Direct wages 75,000 I II III

Profit 60,900 Raw material used 1000 — —

Administration overhead 42,000 Cost per ton (R) 200 — —
Selling & distribution Weight lost
(% of input) 5% — —
overhead 52,500
Factory overhead 45,000 Scrap (sale price
R50 per ton) 50 ton 30 ton 51 ton
Prepare a Cost Sheet. 7½
Sale price per ton (R) 350 500 80

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 ( 5 ) ( 6 )

Management expenses were R17,500 and 4. (a) Calculate—(i) P/V ratio, (ii) fixed cost,
selling expenses R10,000 are not to be (iii) the volume (in units) of production to
allocated in the processes. Two-third of the break-even (iv) the volume of produc-
output of process I and half of the output of tion (in units) to earn a profit of R 40,000
process II are passed on to next process and from the following information : 8
the balances are sold. The entire output of Selling price per unit is R 100. The
process III is sold. You are required to company sold in successive periods
prepare the three process accounts and a 7000 units and 5000 units and has
statement of profit. 15 incurred a loss of R 10,000 and earned
Or a profit of R 10,000 respectively.
A contractor undertook a contract for
(b) Taking hypothetical figures, draw a
constructing a building. The contract price
break-even chart. 7
was R 15,00,000 and the contract
commenced on 1st January, 2020. During Or
the year, the following expenses were
A practicising Chartered Accountant now
incurred over the contract :
spends R 18 per kilometre on taxi fare for his
(R)
Material issued from stores 10,000
clients’ work. He is considering two
Material purchased 3,00,000 alternatives, purchase of a new small car or
Labour 2,50,000 an old bigger car. The estimated cost figures
Indirect expenses 90,000 are as follows :
Plant 8,50,000 Items New Old bigger
Material returned to stores 20,000 small car car
Material lost by fire 5,000
Purchases price (R) 7,00,000 4,00,000
Materials at site 15,000
Sale price after 5 years (R) 3,80,000 2,40,000
Plant at site (31-12-20) 8,00,000
Work uncertified 20,000 Repairs and servicing per 20,000 24,000
annum (R)
Cash received from contractee
(80% of work certified) 5,60,000 Taxes and insurance per
annum (R) 34,000 14,000
Prepare Contract A/c and WIP A/c, and show
Petrol consumption per litre (km) 10 7
how it will appear in the Balance Sheet of
31-12-2020. 9+3+3=15 Petrol price per litre (R) 70 70

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 ( 7 )

He estimates that he travels 10000 km

annually. Which of the three alternatives will
be cheaper? If his practice expands and he
has to travel 19000 km per annum, what
would be his decision? At how many km per
annum the cost of the two cars break-even
and why? Ignore interest and income tax. 15

5. The details regarding the composition and

the weekly wage rates of labour force
engaged on a job scheduled to be completed
in 30 weeks are as follows :
Category of Standard Actual
workers
No. of Weekly No. of Weekly
labourers wage rate labourers wage rate
per worker per worker
Skilled 75 60 70 70
Semi-skilled 45 40 30 50
Unskilled 60 30 80 20

The work is actually completed in 32 weeks.

Calculate all possible labour variances. 15
Or
Define flexible budget. State the objectives
and advantages of a flexible budget.
3+6+6=15

HHH

22D—PDF/90 5/H–76 (xii) (Syllabus–2015)