Roll No………………… | |
Total No. of Questions— 9] | [Total No. of Printed Pages—10 |
Time Allowed : 3 Hours | Maximum Marks : 100 |
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Answers to questions are to be given only in English except in the cases of candidates who have opted for Hindi medium. If a candidate who has not opted for Hindi medium, answers in Hindi, his answers in Hindi will not be valued. | |
Question Nos.1 and 6 are compulsory. | |
Attempt three questions out of the remaining question numbers 2, 3, 4 and 5 and attempt two questions from the remaining Questions Nos. 7, 8 and 9. | |
Working notes should form part of the answer. | |
Marks |
1. | (a) | Discuss the essential requisites for the installation of uniform costing system. | 3 | ||||
(b) | Discuss the treatment of spoilage and defectives in cost accounting. | 3 | |||||
(c) | A B C D Co. Ltd. produces and sells four products A, B, C and D. These products are similar and usually produced in production runs of 10 units and sold in a batch of 5 units. The production details of these products are as follows : | 4+4+4 =12 |
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( 2 )
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The production overheads during the period are as follows :
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The cost drivers for these overheads are detailed below :
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The number of requisitions raised on the stores was 25 for each product and number of orders executed was 96, each order was in a batch of 05 units. Total cost of each product assuming the absorption of overhead on machine hour basis; Total cost of each product assuming the absorption of overhead by using activity base costing; and Show the differences between (i) and (ii) and comments. | ||||||||
2. | (a) | Distinguish between :
(i) Explicit and Implicit cost (ii) Job costing and Contract costing | 3+2=5 |
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( 3 )
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(b) | An engine manufacturing company has two production departments : (i) Snow mobile engine and (ii) Boat engine and two service departments: (i) Maintenance and (ii) Factory office. Budgeted cost data and relevant cost drivers are as follows: | 2+3=5 | ||||||||||||||||
Required
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( 4 )
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(c) | SK Enterprise manufactures a special product "ZE". The following particulars were collected for the year 2004 :
Required:
| 2+1+1 =4 |
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3. | (a) | Discuss the area of activity in respect of which cost accounting records are to be maintained. | 4 | ||||||||
(b) | In order to develop tourism. ABCL airline has been given permit to operate three flights in a week between X and Y cities (both side). The airline operates a single aircraft of 160 seats capacity. The normal occupancy is estimated at 60% through out the year of 52 weeks. The one way fare is Rs. 7, 200.
Required:
Calculate the net operating income per flight. The airline expects that its occupancy will increase to 108 passengers per flight if the fare is reduced to Rs. 6,720. Advise whether this proposal should be implemented or not. | 3+2=5 | |||||||||
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( 5 )
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(c) | A manufacturing unit has purchased and installed a new machine of Rs. 12,70,000 to its fleet of 7 existing machines. The new machine has an estimated life of 12 years and is expected to realise Rs. 70,000 as scrap at the end of its working life. Other relevant data are as follows :
| 2+3=5 | |||||||||||||
Calculate machine hour rate, if (a) setting up time is unproductive; (b) setting up time is productive. | |||||||||||||||
4. | (a) | Discuss the treatment of research and development expenditures in cost accounting. | 3 | ||||||||||||
(b) | Explain the area of cost reduction at product design stage. | 3 | |||||||||||||
(c) | The following figures have been extracted from the cost records of a manufacturing unit :
| 2+2+ 1+1+2 =8 |
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( 6 )
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Finish Products : Entire output is sold at a profit of 10% on actual cost from work-in-progress. Wages incurred Rs. 70,000, overhead incurred Rs. 2,50,000. | |||||
Items not included in cost records : Income from investment Rs. 10,000, Loss on sale of capital assets Rs. 20,000. | |||||
Draw up Store Control account, Work-in-progress Control account, Costing Profit and Loss account, Profit and Loss account and Reconciliation statement. | |||||
5. | (a) | Explain:
(i) Single and multiple overhead rate (ii) Sunk cost. | 2+3=5 | ||
(b) | A company produces two joint product X and Y, from the same basic materials. The processing is completed in three departments. | 2+3+2 +2=9 |
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Materials are mixed in department I. At the end of this process X and Y get separated. After separation X is completed in the department II and Y is finished in department III. During a period 2,00,000 kgs of raw material were processed in department I, at a total cost of Rs. 8,75,000, and the resultant 60% becomes X and 30% becomes Y and 10% normally lost in processing. | |||||
In department II 1/6 of the quantity received from department I is lost in processing. X is further processed in department II at a cost of Rs. 1,80,000. | |||||
In department III further new material added to the material received from department I and weight mixture is doubled, there is no quantity loss in the department and further processing cost (with material cost) is Rs. 1,50,000.
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There were no opening stocks. If these products sold at split-off-point, the selling price of X and Y would be Rs. 8 and Rs. 4 per kg respectively. |
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( 7 )
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Required :
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6. | (a) | XYZ Co. Ltd. is a pipe manufacturing company. Its production cycle indicates that materials, are introduced in the beginning of the production cycle; wages and overhead accrue evenly through out the period of the cycle. Wages are paid in the next month following the month of accrual. Work in process includes full units of raw materials used in the beginning of the production process and 50% of wages and overheads are supposed to be conversion costs. Details of production process and the components of working capital are as follows :
| 5+5 =10 | |||||||
Required to calculate :
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( 8 )
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(b) | D Ltd. is foreseeing a growth rate of 12% per annum in the next two years. The growth rate is likely to be 10% for the third and fourth year. After that the growth rate is expected to stabilise at 8% per annum. If the last dividend was Rs. 1.50 per share and the investor's required rate of return is 16%, determine the current value of equity share of the company.
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7. | (a) | "Decision tree analysis is helpful in managerial decisions." Explain with an example. | 5 | ||||||||||
(b) | The R & G Company has following capital structure at 31st March, 2004, which is considered to be optimum :
| 2+1+2 +2=7 |
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The company's share has a current market price of Rs. 27.75 per share. The expected dividend per share in next year isa 50 percent of the 2004 EPS. The EPS of last 10 years is as follows. The past trends are expected to continue :
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The company can issue 14 percent new debenture. The company's debenture is currently selling at Rs. 98. The new preference issue can be sold at a net price of Rs. 9.80, paying a dividend of Rs. 1.20 per share. The company's marginal tax rate is 50%.
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( 9 )
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8. | (a) | Explain the relevance of time value of money in financial decisions. | 2 | ||||||||||
(b) | Discuss the eligibility criteria for issue of commercial paper. | 3 | |||||||||||
(c) | The following is the income statement of XYZ Company for the year 2004 : | 7 | |||||||||||
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Additional informations are :
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( 10 )
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9. | (a) | Write notes on :
| 2+3=5 | |||||||
(b) | With the help of the following information complete the Balance Sheet of MNOP Ltd. : | 7 | ||||||||
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