TU old Cost Management Accounting – Exam Paper 2070

Tribhuvan  University   2070

 

B.B.S/ I Year/ MGMT                                                     Full Marks: 100

Cost & Management Accounting (MGT 212)                        Time: 3 hrs.

Candidates are required to give their answers in their own words as far as practicable.

The figures in the margin indicate full marks.

Attempt ALL the questions.

  1. Write in short what you know about Cost Accounting. Give any two advantages of Cost Accounting. [3+2]

OR,

Enumerate any five advantages of Management Accounting. [5]

  1. “ABC system of stock control is also known as control by importance and exception.” Comment briefly in about 5 to 7 effective sentences. [5]
  2. Define Fixed and Variable Cost giving two examples of each. [2.5+2.5]
  3. Write short notes on Use. Value Esteem Value and Cost Value in Value Analysis. [5]
  4. What do you mean by Non-Integrated Accounting? Mention its any two advantages. [3+2]

OR,

The annual consumption of raw material of a factory is 50,000 kg. The cost price per kg is Rs.5. The estimated expenses for each purchase is Rs. 125. The overall storage cost estimated is 10 percent of unit inventory cost.

The supplier of the raw material has made a special offer of 0.2 percent price off on 10,000 kg lot purchased.

Required: Suggestion for the purchase of raw material by showing comparative total cost including cost of raw material for optimal purchase and a special offer. [2+2+1=5]

  1. Assume the following data concerning the earning of a worker under Halsey Premium Plan.
Total earning

Guaranteed wage rate per hour

Standard pre-fixed for the job

Rs. 440

Rs. 40

12 hrs.

Required; (i) Time taken by the worker for the job (2) Bonus earned by the worker [3+2=5]

  1. The annual expenses of a public health centre are as under:
 

Dispensary expenses

Expenses for food provisions & others

Medical supplied

Repair and maintenance

General administration charges

Cost of oxygen

Expenses for x-rays and others

Rent and rates

Salaries to staffs – paid on the basis on the basis of number of patient attended and time spent by them.

Rs.
250,000

900,000

300,000

50,000

240,000

80,000

70,000

390,000

 

2 Doctors

4 Nurses

3 Helpers

@ Rs.20,000 per month

@ Rs.4,000 per month

@ Rs.2,000 per month

The expected margin is fixed at 20% on bill amount. The health centre has 50 beds and bed occupancy position is as follows:

30 beds for 300 days

20 beds for 250 days

Required: (i) Operating cost statement by showing cost per bed per day (2) The rate to be charged per bed per day

  1. The relevant information of three products made by a company for a period is given below:
 

Output in units

Direct labour hour per unit

Number of orders executed

Number of set-ups

Product X Product Y Product Z
2,000

1.5

5

2

3,000

1

2

2

5,000

0.8

3

3

The overhead costs and cost drivers are:

Cost items Cost drivers Amount (Rs.)
Production control

Indirect labour

Material handling and dispatch

Set-ups

Direct labour hours

Orders executed

14,000

10,000

6,000

Required: Calculate total overhead costs for each product by using (1) Direct labour hours (2) Activity – based costing [3+5=8]

The table given below contains the position of processing divisions:

 

Space used (sq.mt)

Machines’ cost (Rs.)

Number of employees

H.P. of machines

DLH produced

I II III
5,000

5000,000

30

50

4,000

4,000

300,000

20

30

2,500

2,000

200,000

20

20

2,500

The overheads incurred during last month are as follows:

Fuel consumed

Lighting & heating expenses

Miscellaneous expenses

Rent & rates

Supervision costs

Rs.20,000

Rs.16,500

Rs.18,000

Rs.22,00

Rs.14,000

The rate of depreciation applied on all the machine in 12% p.a.

Required:

Overhead per DLH of each processing division [2+2+2+2=8]

  1. The income statement of a book printing and distributing house selling 4,000 sets of book in the last year printed at a capacity output is as follows:
Sales revenue

(4,000 sets of book at Rs.250 per set)

Less: Variable cost:

Material cost

Labour cost

Manufacturing overheads

Selling & distribution overheads

Contribution margin

Less: Budgeted fixed costs manufacturing overheads

Not-manufacturing overheads

Net income

1,600,000

 

 

(200,00)

(180,000)

(200,000)

(80,000)

340,000

(200,000)

(80,000)

60,000

The book printing and distributing house has made projection of selling 4,300 sets of book for the current year. There is no beginning stock of book but expected ending stock of book but expected ending stock of 200 sets of book for the current year by the printing and distributing house.

The unit cost and selling price will remain unaltered for the current year.

Required: Income statement by using Absorption Costing [5]

  1. The relevant information regarding manufacturing overhead cost needed for preparing a flexible budget have been provided as under:
Activities in units

Indirect materials and labour costs

Supervision and repairs costs

Rent, depreciation and other

Total cost

10,000 20,000
10,000

10,000

5,000

20,000

15,000

5,000

25,000 40,000

Required: Flexible budget for 16,000 units volume and 24,000 units volume by using flexible budgeting formula [2.5×2=5]

  1. The normal use in standard output and the actual consumption of a confectionary industry have been given below:
Standard Actual
Materials Output Rate Cost Materials Output Rate Cost
Sugar 10 kgs Rs.40 Rs.400 Sugar 12 kgs Rs.40 Rs.480
Flour 60 kgs Rs.20 Rs.1,200 Flour 70 kgs Rs.20.5 Rs.1,435
Milk 30 lts Rs.20 Rs.600 Milk 18 lts Rs.19 Rs.342
100 2,200 100 2,257
Less: Standard loss 20 Production 88 kgs of Biscuits
Outpur 80 kgs of Biscuits

Required:

Direct materials, yield, mix, use price and cost variances [1×5=5]

  1. A manufacturing company is considering to produce New Toy for Play Group. It has estimated that the each Toy would cost Rs.7 for material and Rs.5.50 for labour and mark-up would be 100% on these cost. The total fixed cost for the product would be Rs.125,000.

Required: (1) BEP value of the product (2) Sales units to earn 20% profit on sales value (3) If the company desires an after net income, from the product of Rs.42,000 with tax rate of 40%, how many units must be sold? (4) BEP units assuming variable costs increases by 20 percent. [2+2+2+2=8]

  1. Financial account of a manufacturing company reported a loss of Rs.43,700 for year ending Ashad of current year. The other information relating to income and expenses are as follows:
Office expenses including depreciation recorded in excess in cost account

Income from interest, rent, sales of scrap etc not shown in cost

Provision for income tax and doubtful debts provided in financial account only

Production overhead shown in excess in financial account

Rs.
3,300

 

7,900

 

19,775

 

3,125

Required: Reconciliation statement showing the profit or loss by cost account [5]

  1. A manufacturing company provides you the following information:
 

Revenue from sales goods

Materials purchases & used

Paid for the other services used for production of goods

Opening stock of finished goods, work-in-progress and raw materials

Closing finished goods, WIP and raw materials

Productive & non-productive wages to the workers

Salaries to the staff of the functional departments

Depreciation of productive assets

Depreciation on office equipments

Dividend proposed

Taxes paid

Rs.

850,000

210,000

72,105

45,000

65,000

343,600

142,620

20,500

1,120

24,000

18,500

Required: Value added statement showing value added generated and applied for [5]

  1. Following are the particulars to process second for the month of Ashad
Unit Value
Transfer from process First a/c

Transfer to Finish Stock a/c

Consumer materials

Labour cost

Production overhead

Normal loss: 10% of inputs

Opening work-in-progress

Closing work-in-progress

Sales of scrap @ Rs.12 per unit

9,000

 

 

 

 

 

1200

900

Rs.67,500

8,100

9,000

32,500

17,090

Opening WIP and closing WIP were to be valued at cost transferred from previous process.

Required: (1) Process second a/c (2) Abnormal loss a/c [5+2=7]

  1. Kathmandu Construction Company Ltd. under took a contract of Rs.5,000,000 to construct a bridge. Company started its work on Shrawan 1, 2061.
Material purchased and issued

Plant and tools issued

Wage paid

General expenses

Establishment expenses

Rs.2,000,000

50,000

1,500,000

10,000

20,000

Company disposed off certain materials costing Rs.15,000 for Rs.20,000. A portion of plant issued was disposed off for Rs.10,000 at Book Value. The following items were in stock on year end Ashad 2062

Materials

Plant

Rs.10,000

Rs.15,000

Cash received Rs.3,600,000 being 90% of work certified. Cost of work done but not certified yet was Rs.20,000.

It is established that the contract work would complete at end of Bhadra 2062. The company estimated the following additional expenditures till the end of Bhadra.

a.       Wages

b.       Materials in addition to stock in hadn

c.       General expenses

d.       Plant and tools in addition to that in stock

e.       Estimated residual value of plant

f.        Contingencies reserve

Rs.250,000

Rs.400,000

Rs.5,000

Rs.5,000

Rs.20,000

Rs.10,000

Required: (1) Contract account showing the amount of profit to be credited to Profit and Loss Account [9+6=16]

OR,

The sales budget, production budget and other related information of M/S Yantrasala have been provided below:

Schedule I Sales Budget

Particulars/ months

Sales unit

Sales revenue (Rs.)

 

Nov.

20,000

400,000

 

Dec.

20,000

400,000

 

Jan.

30,000

600,000

 

Feb.

35,000

700,000

 

March

40,000

800,000

 

Production Budget Schedule II

Particulars/ months

Production unit

 

Jan.

35,000

 

Feb.

40,000

 

March

40,000

 

April

35,000

20% of sales will be in cash and 80% will be on credit. 50% of credit sales will be realized in the month of credit sales and 25% will be realized in the next month and remaining 25% in the next following month of sales. Each unit of output will need 2 units of materials and material and indirect labour per unit will be Rs.2 and Re.1 repectively. Besides, indirect materials and indirect labour the other manufacturing cost will be as under

Supervision cost

Repairs and maintenance

Depreciations

Rent and others

Rs.12,000 per month

Rs.10,000 per month

Rs.3,000 per month

Rs.12,000 per month

Administrative, selling and distribution overhead will be 10% of goods sales. All they expenses other than purchases will be paid in the month when they become due. The purchase will be paid in the following month of purchase. The company will be having inventory of raw materials and finished goods sufficient to meet the next months production need and sales need repectively. The inventory of deifferent items and other balances on January 1st this year have been presented as under.

Raw materials

Finished goods

Cash balance

Accounts payable

70,000 units

30,000 units

Rs.20,000 (minimum balance)

Rs.140,000

The company will buy a new grinding machine at a cost of Rs.150,000 on January this year and will receive a rent income of Rs.50,000 on February.

M/S Yantrasala has reached into an agreement with Nepal Commercial Bank for a short term loan to overcome cash deficiency. According to the agreement the borrowing will be in a multiple of Rs.5,000 and repayment will be in Rs.1,000. The bank will charge 12% p.a., interest on the balance of loan due.

Required: (1) Material Purchase Budget for 1st quarter  (2) Manufacturing Overhead Budget for 1st quarter (3) Cash collection and disbursement Budget for 1st quarter [4+3+8=15]

Comments

comments

Hemant

Hemant Chaudhary is an student 19 years old. He is interested in Hacking, Blogging,coding. He like to Visit new Places and make new Friends. He used to Learn His web works From Friends and Currently is is CEO and Founder of Meropaper and meroreview.com