2017
(September)
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 ‘Cost’, ‘Costing’
and ‘Cost accounting’. Explain briefly the nature and objectives of Cost
accounting. 2+2+2+5+5=16
Or
(b) Narrate
the concepts of Cost Reduction and Cost Control. State in brief, the advantages
as well as dangers of Cost Reduction efforts. 3+3+5+5=16
2. (a) (i) Explain the essential
features of process costing. 6
(ii) The
Kalyan Transport Company is running four buses between two towns which are
fifty kilometers apart. Seating capacity of each bus is 40 passengers.
The following
particulars were obtained from their books for a particular month of a year.
|
|
Rs.
|
|
Salaries of office and supervisory staff
Wages of drivers, conductors and cleaners
Diesel oil and Other oils
Repairs and Maintenance
Taxation, Insurance etc
Depreciation (on Kms. Basis)
Interest and other charges
|
20,000
30,000
10,000
3,000
2,500
4,000
3,500
|
Actual passengers carried were
75% of the seating capacity. All the four buses run 30 days in the month, each
bus made one round trip per day.
Prepare an Operating Cost Sheet
for the month showing the cost per passenger-km. 10
(b) Discuss the
objectives of reconciliation of cost and financial accounts. Explain the need
for reconciliation. 6+10=16
3. (a) What is Common-size
Statement? Discuss the features and utility of such a statement. 4+12=16
Or
(b) From the
following Balance Sheet of the Popular Co. Ltd. prepare Common-size Balance
Sheets and give your comments on the affairs of the company. 10+6=16
Popular
Company Limited
Balance
Sheet
(Rs. in lakhs)
|
Liabilities
|
2015
|
2015
|
Assets
|
2015
|
2016
|
|
Share Capital
Reserves
Secured Loans
Unsecured Loans
Current Liabilities
|
70
70
25
15
20
|
70
120
20
10
30
|
Fixed Assets
Current Assets:
Stock
Debtors
Cash
|
100
60
30
10
|
120
80
40
10
|
|
|
200
|
250
|
|
200
|
250
|
4. (a) “A device for making
financial data more meaningful is to reduce them to ratios.” Elucidate the
statement with justifications. 16
Or
(b) From the
following Balance Sheet you are required to calculate the ratios mentioned
below and comment in relation to each of these ratios:
1)
Ratio of External Equities to Total Assets,
2)
Ratio of Fixed Assets to Net Worth,
3)
Ratio of current Assets to Net Worth. 6+5+5=16
Balance Sheet
As at ………………
|
Liabilities
|
Rs.
|
Assets
|
Rs.
|
|
6,000 Equity Shares @ Rs. 100 each
7% Debentures
Reserves and Surplus
Sundry Creditors
Bills Payable
|
6,00,000
3,00,000
1,60,000
60,000
1,00,000
|
Buildings
Furniture
Machinery
Stock
Debtors
Cash balances
|
5,00,000
4,20,000
80,000
1,20,000
60,000
40,000
|
|
|
12,20,000
|
|
12,20,000
|
5. (a) Differentiate between: 8+8=16
1)
Fixed working capital and variable working
capital.
2)
Gross working capital and net working capital.
(b) M/s A.B.
& Co. requests you to prepare a statement showing the working capital
requirements. They estimate to produce 4,800 units in a year. The following
information have been furnished for you.
|
Elements of Cost
|
Cost Per unit (Rs.)
|
|
Raw materials
Direct labour
Overheads
|
8
2
6
|
|
Total cost
Profit
|
16
4
|
|
Selling price
|
20
|
Raw materials are in stock on an
average period of one month. Materials remain in process on an average period
of half a month. Finished goods are in stock on an average period of one and a
hald months. Customers enjoy one month’s credit while suppliers allow one
month’s credit.
Cash in hand expected in Rs.
2,500.
Production is carried out uniformly during the
year and wages and overheads accrue evenly. 16
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