5/H–76 (xii) (Syllabus–2015)

( 2 )
Odd Semester, 2020
( Held in March, 2021 ) 2. (a) Compute the machine hour rate from
the following data : 5
COMMERCE (i) Cost of machine—R 1,00,000
( Honours ) (ii) Installation charges—R 10,000
( BC–502 ) (iii) Estimated scrap-value after expiry
of its life (15 years)—R 5,000
( Cost Accounting )
(iv) Rent and rates for the shop per
Marks : 75 month—R 200
Time : 3 hours (v) General lighting per month—R 300
The figures in the margin indicate full marks (vi) Insurance premium per machine
for the questions per annum—R 960
1. Why is Cost Accounting necessary? Mention (vii) Repairs and maintenance expenses
steps which should be taken to instal Cost per annum—R 1,000
Accounting System. 6+9=15 (viii) Power consumption—
Or
Zebra Company is able to obtain quantity 10 units per hour
discounts on its orders of materials as (ix) Rate per 100 units—R 20
follows :
Price per Tonnes Tonnes (x) Shop supervisor’s salary per
(in R) month—R 6,000
6·00 Less than 250
(xi) Estimated working hour per
5·90 250 and less than 800
5·80 800 and less than 2,000 annum 2200. This include setting
5·70 2,000 and less than 4,000 up time of 200 hours
5·60 4,000 and above (xi) The machine occupies 1/4th of the
The annual demand for the material is total area of the shop. The
4,000 tonnes. Stock holding costs are 20% supervisor is expected to devote
of material cost per annum. The delivery 1/5th of his time for supervising
cost per order is R 6. You are required to the machine.
calculate best quantity to order. 15

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(b) Define fixed, variable and semi-variable 1000 units @ R 3 each were introduced to
overheads. 10 process I. There is no work-in-progress at
Or the begining and end of the period. The
Define labour turnover. How is it output of each process passes direct to the
measured? What are its causes? State next process and finally to finished stores.
the effect of High Labour Turnover.
How can you control excess Labour Process–I Process–II Process–III
Turnover? 2+3+4+3+3=15 % of Normal Loss to input 5% 10% 15%
3. The books and records of B Ltd present the Output (in units) during
following data for the month of March’ 20 : the month 950 840 750

Direct labour cost R 16,000 (160% of factory Value of scrap per Unit (R) 2 4 5
overhead), Cost of goods sold R 56,000,
Inventory accounts showed the following : Prepare process cost accounts and other
relevant accounts. 15
March 1st March 31st
R R
Raw materials 8,000 8,600
4. (a) Distinguish Marginal Costing and
Work-in-progress 8,000 12,000
Differential Costing. 5
Finished goods 14,000 18,000
Selling expenses R 3,400, general and
(b) Two businesses X Ltd. and Y Ltd.
administration expenses R 2,600, sales for
manufacture and sell the same type of
the month R 75,000.
product in the same type of market.
Prepare cost sheet. 15 The budget Profit and Loss A/c for the
Or coming year are :
Product A is obtained after it passes through
three distinct processes. Following X Ltd. Y Ltd.
information is obtained from the accounts Sales 30,000 30,000
for the month ending 31st March, 2020 :
Less : Variable cost 24,000 20,000
Process
Fixed cost 3,000 7,000
Items I II III
Materials 2,600 1,980 2,962 27,000 27,000
Wages 2,000 3,000 4,000 Estimated Profit 3,000 3,000
Overhead (100%) of Direct wages.

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You are required to— (b) What is Marginal Costing? State its
(i) calculate the BEP and M/S of each advantages. 2+3=5
business;
(ii) state which of the business is likely 5. The standard cost of a chemical mixture is
to earn (1) heavy demand for the as under :
product and (2) low demand for the 8 tons of material A at R 40 per ton, 12 tons
product; of material B at R 60 per ton. Standard yield
(iii) calculate the percentage increase is 90% of input.
in sales in both the cases to absorb Actual cost for the period is an under :
a 50% increase in fixed overhead
10 tons of material A at R 30 per ton, 20
in both the cases. 10
tons of material B at R 68 per ton. Actual
Or yield is 26·5 tons.
(a) A product is sold at R 100 per unit.
Unit variable cost is R 70 and fixed cost
Calculate (a) material cost variance
amounts to R 24 lakhs per annum. You
(b) material usage variance (c) material price
variance and (d) material yield variance. 15
are required to calculate the following
treating each independent of the other : Or
2×5=10
(a) Briefly explain different types of
(i) P/V ratio budgets. 10
(ii) New Break-even-sales if variable (b) Explain briefly the significance of
cost increases by R 6 per unit, standard costing as a technique of cost
without increasing the selling control. 5
price.
(iii) Increase in sales if profits are to be   
increased by R 4·8 lakhs.
(iv) Percentage increase/decrease in
sales volume (units) to off-set :
1. An increase of R 6 in the
variable cost per unit
2. 10% increase in selling price
without affecting existing profit

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