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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