Master of Commerce (M.Com.) MCom Accountancy SEM III COST ACCOUNTING Question Paper - Mumbai University | munotes

Questions asked in this paper

• (2) Figures to the right indicate full marks

1. Q1 From the following information prepare Process account as per F.I.F.O. assumption: Opening stock Degree of Completion Transfer from previous Process: 12,000 units costing Rs. 16,350. Transfer to next Process: 9,700 units; Units Degree of Completion For units scrapped For Closing Stock: 15 marks
2. Q1 AB Ltd. has three production departments A, B, and C and two service departments D and E. The following details are extracted from the books of accounts in respect of indirect expenses incurred during April 2018: Rent and Rates 12,000 Following further details are collected for distribution of the above costs: Value of Machinery (in Rs, 60 50 80 10 Horse power of machines 40 45 60 5 Direct Wages (in Rs. 30 20 40 4 6 Limited has following data for its two activities. It calculates activity cost rates based on Quality Inspections Number of inspections 10,000 Inspections Rs. 3,00,000 ct Code: 72211 /Group A: Advanced Accounting, Corporate Accounting and Financial Management : Advanced Co The company makes three products M, S and T. For the year ended March 31, 2018, the following consumption of cost drivers was reported :
   • (i) Compute the costs allocated to each product from each activity
   • (ii) Calculate the cost of unused capacity of each activity (ili) Discuss the factors the management considers in choosing a capacity level to compute the
3. Q2 The following information relates to budgeted operations of Division X of a manufacturing Sales (50000 units at Rs. 8) The amount of divisional investment is Rs. 1,50,000 and the minimum desired rate of return on the investment is the cost of capital of 20%
   • (iii) Comment on the result of (1) and
   • (iv) The divisional manager has the opportunity to sell 10,000 Rs. 7.50 per unit. Variable cost per unit would be the budgeted, but fixed costs would increase by Rs. 5,000. Additional investment of Rs. 20,000 would also be required. If the manager accepts the special order, by how much and in what direction would his residual income change?
4. Q3 PQR Industries Ltd. has two divisions M and N. Division M manufactures product A — 15 which it sells in outside market as well as to Division N which processes it to manufacture Z — 25. The Manager of Division N has expressed the opinion that transfer price is too high. The two Divisional Managers are about to enter into discussions to resolve the conflict, and Manager of division — M to supply him with some information prior to discussions Division M has been selling 50,000 units to outsiders and 10,000 units to Division N, all at Rs. 25 per unit it is not anticipated that these demand will change. The variable cost is Rs. 15 per unit and the fixed costs are Rs. 3 Lakhs. Divisional investment is asset is Rs. 12 lakhs The Manager of Division M anticipates that Division N will want a transfer price of Rs. 22. If he does no sell to Division N, of fixed costs 2,00,000 of assets can be avoided. The Manager of Division M would have no control over time proceeds from the sale of the assets and is judged primarily on his rate of Should the Manager of Division M transfer its products at Rs. 22 to Division N ? What is the lowest price that the Division M accepts? ct Code: 72211 /Group A: Advanced Accounting, Corporate Accounting and Financial Management : Advanced Co 15 marks
5. Q3 of the balance sheet of ABC co. given below Current Debts 6,00,000 | Cash and Accounts Receivable Long term Debts 10,00,000 | Plant and Equipment (net of 14,00,000 The current price index is 280. The plant and equipment and the long- term debts were acquired when the price index was at 180 Revised the summary balance sheet to restate all assets and equities in the terms of current rupees. How will you treat the monetary gain or loss, if any? 4.(A) State whether following statements are True or False: (08) 15 marks
6. Q1 Visible waste means residue such as slag also having no sale value
7. Q2 The sale value of the units of abnormal loss is credited to the process A/c
8. Q3 Cash discounts are generally excluded completely from the costs
9. Q4 Variable overhead vary with time
10. Q5 Activity cost pools are cost accumulations associated with a given activity
11. Q6 Machine setup is normally considered a unit-level cost
12. Q7 costs are direct costs
13. Q8 In computing a transfer price, the maximum price should be no higher than the lowest market price at which the buying segment can obtained the good or service externally Match the following: (07)
14. Q1 Normal Output a) No.of employees
15. Q4 Canteen d) Number of customers
16. Q6 Target cost f) Number of machine hours
17. Q7 Distribution g) A percentage of cash collection
    • (4) Write Short notes on: (Any 3) 15
18. Q1 Feedback Report Need for inflation accounting
19. Q4 Equivalent Units
20. Q5 Trial and Error Method

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