COST AND MANAGEMENT ACCOUNTING

Time: 3hrs SECTION A Answer any ten questions. Each carries 1 mark 1. What is opportunity cost? 2. Explain Economic Order Quantity (EOQ)? 3. What is Rowan Premium plan? 4. Define management accounting? 5. What is cost allocation? 6. What is imputed cost? 7. What is cost unit? 8. What is Bincard? 9. What is V.E.D analysis? 10. What is ABC analysis? 11. What do you understand by labour turnover? 12. Define overheads? SECTION B Answer any ten questions. Each carries 4 marks. 1. State the advantages of FIFO method? 2. Find out EOQ from the following Annual consumption Cost of material per unit Cost of placing and receiving one order Annual carrying cost 10% of inventory value

- 8000units - Rs 30 - Rs 60

3. Define costing. Enumerate the advantages of costing? 4. ABC Ltd. produces 1000 units of an article during the month of January. The cost details are Rs. Direct material 20,000 Direct wages 10,000 Direct expenses 2,000 Factory overhead 13,000 Office overhead 6,960 If profit of 25% on sales is to be maintained, what would be the selling price of each units of article?

COST AND MANAGEMENT ACCOUNTING

5. Calculate Machine hour rate for Machine No.777 from the following Per hour Per annum Electric power 45paise Steam 40paise Water 10paise Repairs Rs 1,060 Rent Rs 540 Running hours 2000 Original cost of machine Rs 20,000 Book value Rs 4,000 Depreciation at 10% per annum, on original cost. 6. From the following information, calculate : a) re-order level, b) maximum level, c) minimum level Normal usage -- 50 units/week Minimum usage - 25 units/week Maximum usage 75 units/week Re order period - 4 to 6 weeks Re order quantity 300unis 7. From the following particulars calculate the earnings of a worker under Halsey premium bonus system. Hourly rate of wages(guaranteed) Re 0.75 Standard time for producing 1 dozen article in 3 hours Actual time taken by the worker to produce 20 dozen articles in 48 hours. 8. Calculate EOQ from the following: Annual consumption 1,600units Cost of material per unit Rs.40 Cost of placing and receiving one order Rs 50 Annual carrying cost of inventory: 10% of inventory value 9. Compute minimum and maximum stock levels from: Minimum consumption: 200units/day Maximum consumption 300units/day Normal consumption 240units/day Re-order period 10-15days Re-order quantity 1,500units Normal re-order period 12days

COST AND MANAGEMENT ACCOUNTING

10. Explain the advantages of piece rate system? 11. State the difference between cost allocation and cost apportionment? 12. State the difference between Halsey and Rowan bonus plan?

Section C Answer any two questions. Each carry 15 marks 1. Explain the importance of cost accounting 2. From the following transactions, prepare separate stores ledger accounts using the following pricing methods. FIFO method: LIFO method. Jan 1 Opening Balance 100units@ Rs 5 each Jan 2 Received 500 units @ Rs 6 each Jan 3 Issued 300 units Feb 5 issued 200 units Feb 6 Received 500 units @ Rs 5 each Mar 10 Issued 300units Mar 12 issued 250 units 3. Prepare a statement of cost from the following data to show material consumed, prime cost, factory cost, cost of goods sold and profit. 1-1-2012 31-12-2012 Rs Rs Raw material 60,000 50,000 Work-in-progress 24,000 30,000 Finished goods 1,20,0000 1,10,0000 Purchase of material during the year 9,00,000 Wages paid 5,00,000 Factory overheads 2,00,000 Administration overheads 50,000 Selling and distribution overheads 30,000 sales 20,00,000

COST AND MANAGEMENT ACCOUNTING