Paper / Subject Code: 83007 / Financial Accounting and Auditing X -Cost Accounting 3 Hours ‘Total Marks 100 Note: All Questions are compulsory 1 2. Figures to the right indicate full marks allotted to the questions. 3. Working Notes wherever necessary should form a part of your answer. 4. Calculate figures up to the two decimal points wherever required QU. A) Multiple Choice Questions. (answer any ten) : 10 1. Standard Quantity of Materials is 1,000 kg, Actual Quantityis 900 kg, Standard Price is Rs. 12 per kg, Actual Price is Rs.16 per kg. Find material price variance a. Rs.2,400(A) _< b.Rs3,600(A) c. Rs. 1,200(F) SA RS2,100(F)¢> 2. Insstanidard costing, Labour Rate Variance affects a. Material Cost Variance <¢. Labour Cost Variance a Maes VEEN, 3° Material-Cost Variance = Plus Material Usage-Variance..” a. Labour Efficiency Variance _b. Material Prige Variance c. Material Mix Variance dd: Material Yield Variance 4, Cost drivers are > > group ofiidividual costs s whose Total is allocated, b. used to assign costs c. selected to minimize allocated costs ~~ _—_d equivalent to cost pools” “5. The ptocess of Benchmarking'begins with the __~ “phase _~> : “a, Data collection : Sb Analysis © coReview > : Plan > 6.-The full form of ABCis__ & a. Activity Based Costing 2 b. Action’Based Costing c. Activity Business Costing d. Accounting Based Costing 7. Marginal costing is mainly concerned with ¢ a, Fixed cost b. variable cost se, semi fixed cost. Estimated cost 8) Contribation is equal to as a. Sales + Variable cost © b. Fixed:Cost - Profit . Sales x P/V ratio 4. Sales - profit 9. Acompany has sales of Rs, 4,00,000, P/V ratio is 20% and fixed cost is Rs. 30,000, the profit will be Rs. 7 “a. Rs $0,000 . Rs.40,000 © Rs.70,000 4, Rs.80,000 10. Opening balance of WIP is recorded on a Debit side of Stores ledger control account b. Credit side of Stores ledger control account c. Debit side of WIP ledger control account d, Credit side of WIP ledger control account 49993 Page 1 of 13 O31 YA2CAGEXG31Y42CAMENGD| YA2CAIEXGSI YA2CASEPaper / Subject Code: 83007 / Financial Accounting and Auditing X -Cost Accounting L1. Subcontract Cost paid for the Contract is debited to a, Contiaetee Account b, Contract Account c. Sub- Contaet Account d. Costing Profit and Loss Account 12. Process Output is 50,000 units, Normal Loss is 6,000 units, Abnormal Loss 1s 4,000 units ‘The Input is a, 40,000 units 30,000 units €, 60,000 units 75,000 units B) State whether the following statements-are True oF False (any ten): 10 1. Material usage variance is calculated on the basis of difference between the standard price and.the actual price. : 2. The standard cost and the estimated cost,are the synonyms of each other. Standard cost denotes cost which is pre-determined on the basis of specifications laid down by:the management. s Machine seflip is normally considered a batch-Jével activity. 4 5, ABC does not lead to’control over overhead:costs. 6. Overheads are allocated on the-basis of direct labour-cost only. 7. Conttibution is-the sum total. of fixed e88t and profit. - 8. The selling prige reduction results in‘réduction of P/V ratio. > 9. Atno profit no loss Costribution is equal to fixed cost . 10, When raw inaterial is purchasedsthe storeslédger account is debited. 11 InContract Costing, the amount of work done after the certification by the architect is known as work certified: = - 12. Normal loss is treated as niormal cost of production. © Q2.A) Ws, Akshay & Company has undertaken two.contracts one at Mumbai and another at Nasik The details of the contracts are given below for the yearended 31° March, 2023: _20 a Contract at Contract at e Mumbai_|_ Nasik Date of commencement J July, 2022 | 1" October, 2022 | Contract Price” f 10,00,000 20,00,000 Direct Labour - 2,60,000 1,90,000 2,20,000 Material issued from stores | [Material returned to stores ‘ g Plantinstalledatsite | o = Direct Expenses .¢ Overheads = ial Sold (Cost Rs.10,000) _ ~5,00,000 | (representing 80% certified — —___15,000 | 10,000 49993 Page 2 of 13 SAMEXOBIYA2CAMEXOS V42CAKE XO31Y42CA4EX631Y4°Paper / Subject Code: 83007 / Financial Accounting and Auditing X -Cost Accounting 250% (i) Provide depreciation on plant at 25% p.a. Gi) During the year materials costing Rs.16,000 were transferred from Nasik Contract to Mumbai Contract, Prepare Mumbai Contract A/c & Nasik Contract A/c. OR Q2.B) Ahuja Construction Pvt. Lid provides you the following information: 20 Particulars 7 ‘Actual Expenditure | . Estimated Additional | (1/9/2021 upto Expenditure 3/2022) (1/4/2022 to > 31/3/2023) Direct Matecial SEH 1195.600)| BEC 1,40,000 Indirect Material 1,14,500 1,27,000 Direct Wages -4,22,000 4,15,000 Supervision Charges _ 140,000 55,000 Architect Fees S ~_1,81,000 1,15,000 Construction overheads = 135,800 = 21,750 “Administrative Overheads 153160 24,000 it = 75,000 |= - “S| Work Uncertified atthe end ofthe year T4800) ~ [Work Certified during the year 312, 50,000 = 14,50,000 Contract Price-was Rs.27,00,000 The value of-Plant & Machinery sent to site was Rs.6,00, 000, whereas the scrap value of the plant &:Machinery‘at the engiot the project was estimated to be * Rs.30,000 x It was decided thatthe profitto be taken’ Sredit fr should be that proportion of the estimated profit to be realized on completion of the project which the certified value of work as on.31/3/2022 bears to the total contract price. You are required to prepare Contract A/c for the period ended 31st March, 2022 along with the working of profit o be taken credit for and estimated contract A/c for the year ending (31/5/2023. Q.3 A) Abhiject ltd, Follows non-integrated system of accounting. Following is the trial 2 balance as onl-1-2023 : 20 Particulars Dr. Cr. zu z Cost Ledger Control ale > 12,00,000 Stores Ledger Control a/e 3,75,000 Ss W-FP Controle 3,00,000| __| Finished Goods Control a/e | 49993 Page 3 of 13 XOSIYA2CAGEX631YA2CAMEXOSIYA2CAGEXGIY42CAAEPaper / Subject Code: 83007 / Financial Acco X -Cost Accounting ing and Auditin; Following are the transactions during the month of January 2023 Material purchased 11,25,000 Material issued to production 4,50,000 Material issued to factory 60,000 Material issued to office 15,000 ‘Total Wages paid 4,50,000 Direct Wages charged to Production 3,75,000 Indirect Wages 75,000 Office Overheads Paid 45,000 Office Overheads applied to Finished Goods 57,000 Selling and Distribution overheads incurred 45,000 Selling and Distribution overheads applied to Cost of Sales 46,500 Factory Overheads charged to Production @35%6 of Direct Wages Finished Goods Produced - 12,00,000 Cost of goods sold iF rs 15,00,000 Sales 18,00,000 Prepare the following ledger accounts for thé month of January 2023 Stores Ledger control a/c Y Work-In-Progress control afc Finished Goods Ledger control-a/¢ Cost Ledger Control a/c Factory Overhead Control ale Office Overhead ControLa/e ~ Selling and Distributionoverhead Control a/c. a Costing Profit and Lossa/e SA AWAY PH OR ~°Q3.B) Product M is manufactured i after it paises through three processes. The following information is obtained {rom the records of a company forthe year ented 31st 20 March, 2023, X Bs Particulars Process A Process B |<’ Process C | Direct Material 71250 1000 | 1500 Direct Labour ~ 1000 1500 2000 | 500:anits at 85 each were introduced to Process A- There was no stock of materials or work in progress at the-beginning and at the 2nd of the year. The otput of each process direct to the next process and finally to the Finished Stock A/c, The following additional data is available: | Particulars Output during [Percentage ofthe | Value of scrap | Production > the week jiormal losgto input | per unit (2) _| overhead (2) Process A 475 Sh 3 | h000 | Process B |-420 10% {5 1500 | Process C 375, 10% — SS 2,000 Prepare Process Cost Accounts and Abnormal Gain or Loss Accounts for the year ended 31st March ,2023 49993 Page 4 of 13 XGBIYA2CA4EXG31 Y42CAAEXG3I YA2CAAEXGS1V42CAAEal Accounting and Auditing X -Cost Accounting Paper / Subject Code: 83007 / Fi Q4Al 10 Ina company’ © Direct Material Rs 4 Per Unit © Direct Labour Rs 3 Per Unit * Direct Expenses 100% of Direct Labour. © Selling Price Rs 20 Per Unit. * Fixed Overheads Rs 50000. Calculate the following: 1. Break Even Point in units. , 2. What should be the Selling Price Per Unit, ifthe Break Even Point isto ‘be brought down to 4000 units? 3. How many'units must be sold to earn a Prot ‘oF Rs 10000? Q4.A.2. 10 The following datais availabe for the company dealing in 2 products A amg ind the relevant Variances. > [Particulars Product ~ Product B “| Standard Material ~~ | 10000 Kg. 15000 Kg. Standard Prive Rs.2.00 per Ke ‘Actual Material required | $000 Ke S= = | 12000Kg ‘Aetual Price » ~ [Rs 1.60perKe 8 ‘ Rs2.20 per Ke. ORS Q42B.1. Pass nevessary journal entries in the books cast records of the & Companies from the following information uhder non-integrated system ” ~ 10 Particulars - - 2 Raw Material Purchased on Credit aa 205000 Wages Incurred c 50800 Manufiicturing overheads Incurred” 64000) | Materials issued to Production | Materials returned (o suppliers Manufacturing overheads charged to Production hed goods produced ‘Selling and Distribution overheads Incurred ‘Selling and Distribution overheads charged to | Production: Sales 700000 49993 Page 5 of 13 X631YA2CAALX631YA2CAMEX6S YA2CASEXGS VARCASEPaper / Subject Code: 83007 / Financial Accounting and Auditing X -Cost Accounting Q4.B2, 10 Product *D’ is obtained after it is processed through process P & Q. The following cost information is available for the month ended 31st March, 2023. Particulars Processes a Q Rate per Unit of units introduced (8) [= Cost of Material (3) ~ 1000 Direct Wages (2) — 1840 Production Overheads (2) 1340 Normal Loss (% on units introduced in each process ic. | \, 20% Input) 2 _ 7 2| Value of Scrap per unit (2) 5 2 4 Outporinunits 7 225 180 Ke “ Q5.Answer the following questions. — 9 es 2 A. Explain the concept of Target Cost rif detail? 7 10 s B Explain the concept of Normal-Loss, Abnotnal Loss and Abnormal Gain in Process costing? ON . . 10 oR 20 Q5 Write short notes (Any four outof six). a) Benchmarking” b) Stages of Life Cycle Costing, ©) Cost Ledger Control Account, d) PN ratio. ©) Variance ) Notional Profit. 49993 Page 6 of 13