Roll No... Total No. of Questions 7 Total No. of Printed Pages - 5 Time Allowed 1.30 Hours Maximum Marks 50 MPS Answers to questions are to be given in English except in the case of candidates who have opted for Hindi Medium. If a candidate has not opted for Hindi medium, his answers in Hindi will not be valued. Question number 1 is compulsory. Answer any five questions from the remaining six questions. Working Notes should form part of the answer. 1. The following details are given in respect of a manufacturing unit for the month of April 2012: Opening work in progress 5,000 units Materials (100% complete) `18,750 Labour (60% complete) `7,500 Overheads (60% complete) `3,750 Units introduced into the process Transferred to the next process Process costs for the period are: Material Labour 17,500 units 17,500 units `2,50,000 `1,95,000 Overheads `97,500 The stage of completion of units in closing WIP is estimated to be: Material 100%, Labour 50% and Overheads 50%. You are required to prepare to a statement of equivalent units of production, statement of cost. Also find the value of output transferred; closing work in progress, using average cost method. Marks 10 2. A lodging home is being run in a small hill station with 50 single rooms. The home offers concession rates during six off-seasons months in a year. During this period, half of the full room rent is charged. The management s profit margin is targeted at 20% of the room rent. The following are the cost estimates and other details for the year ending 31 st March, 2004 (assume a month to be of 30 days).
(a) Occupancy during the season is 80%, while in the off season is 40% only; (b) Expenses (c) (i) Staff salary (excluding room attendants) 2,75,000 (ii) Repairs to buildings 1,30,500 (iii) Laundry & linen 40,000 (iv) Interior and tapestry 87,500 (v) Sundry expenses 95,400 Annual depreciation is to be provided for buildings at 5% and on furniture and equipments at15% on straight line basis; (d) Room attendants are paid `5 per room day on the basis of occupancy of the rooms in a month; (e) Monthly lighting charges are `120 per room, except in four months of winter when (f) it is `30 per room and this cost is on the basis of full occupancy for a month; and A total investment in the home is `100 lakhs of which `80 lakhs relate to buildings and balance for furniture and equipments. You are required to work out the room rent chargeable per day both during the season month, on the basis of the foregoing information. 3. The particulars relating to 4 machines are as follows: Machine Number I II III IV Cost 50,000 40,000 30,000 20,000 Area Occupied (sq. ft.) 500 450 300 250 Light points 10 8 6 4 No. of workers 20 15 8 7 Direct Wages (`) 1,500 1,200 1,000 500 H.P. of Machines 25 20 16 14 Consumable Stores 100 80 75 50 The expenses incurred were as follows: Rent 600 Consumable Stores 305 Power 375 Repairs 700 Lighting 140 Canteen Expenses 100 Indirect Wages 840 General Expenses 420 Depreciation 2800
(a) Compute the Comprehensive Machine Hour Rate for a month 25 working days with 8 working hours on an average. (b) Calculate the cost of production of one unit of Product A, if the material cost is `10, Labour Cost `20 and if processed for 1 hour in Machine 1, 2 hours in Machine II, 3 hours in Machine III and 4 hours in Machine IV. 4. A practicing Chartered Accountant now spend `0.90 per kilometer on taxi fares for his clients work. He is considering two other alternatives, the purchase of a new small car or an old bigger car. The estimated cost figures are: Items New Small Car Old Bigger Car Purchase price `35,000 `20,000 Sale price, after 5 years `19,000 `12,000 Repairs and servicing per annum `1,000 `1,200 Taxes and Insurance per annum `1,079 `700 Petrol consumption, per liter 10 kms. 7 kms. Petrol price, per liter `3.50 `3.50 He estimates that he does travelled 10,000 km annually. Which of the three alternatives will be cheaper? If his practice expands and he has to do 19,000 travelling km per annum what should be his decision? At how many km per annum will the cost of the two cars break-even? Ignore interest and income tax. 5. A.K. Enterprises undertake three different jobs A, B & C. All of them require the use of a special machine and also the use of a computer. The computer is hired and the hire charges work out to `4,20,000 p.a. The expenses regarding the machine are estimated as follows: Amt.( `) Rent for the quarter 17,500 Depreciation per annum 2,00,000 Indirect charges per annum 1,50,000 During the first month of operation the following details were taken from the job register. Job A B C Number of hours the machine was used: (a) Without the use of the Computer 600 900 - (b) With the use of the Computer 400 600 1,000
You are required to compute the machine hour rate for the firm as whole for the month. (a) When the computer was used, and (b) When the computer was not used. Also compute cost of each job. 6. A Chemical product passes through three processes before it is completed and transferred to finished stocks. The following data are available for the month of December 2001 Particulars Process I Process II Process III Fin. Goods Opening Stock 5,000 8,000 10,000 20,000 Direct materials 40,000 12,000 15,000 - Direct labour 35,000 40,000 35,000 - Production overhead 20,000 24,000 20,000 - Closing stock 10,000 4,000 15,000 30,000 Outputs of process are transferred to the next one at the following transfer price: Process I Process II Process III @ 25% on the transfer price to process II @ 20% on the transfer price to process III @ 10% on the transfer price to finished stock. While in process stock are valued at factory cost, finished stocks are valued at the price at which they are received from process III. Sales amounted to `4 lakhs in the month of December 2001. Provision for internal process profit as on 01.12.2001 were as follows. Included in work process of Process II `1,395 Included in work process of Process III `2,690 Included in finished stock `6,534 Show the Process Cost Account. 7. Answer the following (any four): (a) Discuss the concept of Responsibility Centre? Z `64,500 (b) What are the advantages and disadvantages of using Inter Process Profit, in case of process type industries? (c) During the year ended 31st March, 1998 the factory overhead costs of three production departments of an organization are as under: X `48,950 Y `89,200
The basis of absorption of overheads is given below: Department: X `5.00 per machine-hour for 10,000 hours. Y Z 75% of Direct Labour Cost of `1,20,000 `4.00 per piece for 15,000 pieces. Calculate department wise under or over-absorption of overheads and present the data in a tabular form. (d) What do you mean by single blanket rate and where it can be used? (e) A lorry starts with a load of 20 tonnes of goods from station A. It unloads 8 tones at station B and rest of goods at station C. It reaches back directly to station A after getting reloaded with 16 tonnes of goods at station C. The distance between A to B, B to C and then from C to A are 80 kms, 120 kms and 160 kms respectively. Compute Absolute tones-kms and Commercial tones-kms. (2 x4) 8 Marks