LOYOLA COLLEGE (AUTONOMOUS) CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – ACCOUNTING AND FINANCE

Date: 16-11-2024 Dept. No. Max. : 100 Marks

SECTION A - K1 (CO1)
Answer ALL the Questions (10 x 1 = 10)
1. Define the following terms
a) Costing.
b) Material control.
c) Labour Turnover.
d) Overhead.
e) Unit costing
2. MCQ
a) Tender is an
a). Estimation of cost only b). Estimation of profit only
c). Estimation of selling price d). None of these
b) Average price methods are more suitable when
a). Material prices are rising b). Material prices are falling
c). Material prices are fluctuating d). Material prices are constant
c) Labour Turnover is
a). Productivity of Labour b). Change in Labour force
c). Efficiency of Labour d). None of these
d) Appropriate basis for apportionment of material handling charges is
a). Material purchased b). Material in stock
c). Material consumed d). Material wasted
e) Process cost is ascertained and recorded in
a). Balance sheet b). Profit and loss account
c). Separate statement d). Separate account in Ledger
SECTION A - K2 (CO1)
Answer ALL the Questions (10 x 1 = 10)
3. True or False
a) Counting house salaries are a part of Factory overhead.
b) Stock levels are fixed as a part of demand and supply method of Inventory control.
c) Time and motion study is conducted by costing department.
d) All direct costs are together called overhead.
e) Process costing is an example for specific order costing.
4. Match the following
a) Material Requisition Note - Document used to issue materials for production
b) EOQ - Partially completed units converted into complete units
c) Equivalent Units - Apportioning fixed and variable costs to products
d) Overhead apportionment - Optimal order quantity to minimize cost
e) Absorption costing - Allocation of overheads across departments
SECTION B - K3 (CO2)
Answer any TWO of the following in 100 words each. ( 2 x 10 = 20)
5. Describe the methods of costing and giving their scope & characteristics with suitable examples.
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6. Calculate the amount of wages and bonus earned by the worker:
Commenced job – Saturday, 23rd Jund, 8 a.m.
Finished job – Wednesday, 4th July, 5 p.m.
Number of pieces of work given out – 808
Number of pieces of work passed – 718
Worker’s rate – Rs. 2 per hour
Time allowed – 10 per hour
Bonus – 50% of time saved
Pay week commences at 8 a.m. on Wednesday. Assume that the employee worked an 8 hour a day
and no overtime: Saturday, 4 hours.
7. The following particulars refer to a process used in the treatment of material subsequently
incorporated in a component forming part of an electrical appliance:
a). The original cost of the machine used (purchased in June, 2001) was Rs. 10,000. Its estimated
life is 10 years, the estimated scrap value at the end of its life is Rs. 1,000, and the estimated
working time per year (50 weeks of 44 hours) is 2,200 hours of which machine maintenance
etc., is estimated to take up 200 hours. No other loss of working time is expected; setting up
time estimated at 5% of total productive time is regarded as unproductive time. (Bank holidays
are to be ignored).
b). Electricity used by the machine during production is 16 units per hour at a cost of 9 P. per unit.
No current is taken during maintenance or setting up.
c). The machine requires chemical solution which is replaced at the end of each week at a cost of
Rs. 20 each time.
d). The estimated cost of maintenance per year is Rs. 1,200.
e). Two attendants control the operation of the machine together with five other identical
machines. Their combined weekly wages, insurance and the employer’s contributions to
holiday pay amount to Rs. 120.
f). Departmental and general works overheads allocated to this machine for the year 2001-02
amount
to Rs. 2000.
Your are required to calculate the machine hour rate necessary to provide for recoupment of the
cost of operating the machine.
8. Mayur Engineering Co. engaged in job work has completed all the jobs in hand on 30 th Dec., 2001
except Job No. 447. The cost sheet on 30 th Dec. showed direct material and direct labour cost of
Rs. 40,000 and Rs.30,000 respectively as having being incurred on Job No. 447. The costs incurred
by the business on 31st December, 2001, the last date of the accounting year, were as follows:
Direct Material Rs. 2,000
Direct Labour Rs. 8,000
Indirect Labour Rs. 2,000
Misc. Factory Overheads Rs. 3,000
The company follows the practice to make the job absorbed factory overheads on the basis of
120% of direct labour cost.
Prepare a composite job cost sheet for job 447 showing analytical computations, if any, of the
value of WIP on Job No. 447.
SECTION C – K4 (CO3)
Answer any TWO of the following in 100 words each. (2 x 10 = 20)
9. Sunshine Ltd., uses job costing. The following data is provided from its books for the year ending
31st Dec. 2021.
Particulars Rs.
Direct Materials 100,000
Direct wages 50,000
Factory overheads 55,000
Administration overheads 55,000
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 Selling and Distribution overheads 40,000
Profit 75,000
(a) Prepare a job cost sheet indicating prime cost, works cost, production cost, cost of sales
and sale value.

(b) In 2022 the company receives an order for a number of jobs. It is estimated that direct
materials required will be Rs. 140,000 and direct labour cost Rs. 60,000. What price the
company should charge for these jobs if the company intends to earn the same rate of profit
on sales as in 2021 assuming that selling and distribution overheads have gone up by 15%?
The company recovers factory overheads as a percentage of direct wages and
administrative and selling overheads as a percentage of works cost.
10. Show the stores ledger entries as they would appear when using:
a). The simple average method and
b). The weighted average method of pricing issues in connection with the following transactions
Data Particulars Units Prince Rs.
1 May, 2020 Balance in hand b/f 300 2.00
2 May, 2020 Purchased 200 2.20
4 May, 2020 Issued 150 -
6 May, 2020 Purchased 200 2.30
11 May, 2020 Issued 150 -
19 May, 2020 Issued 200 -
22 May, 2020 Purchased 200 2.40
27 May, 2020 Issued 150 -
11. Jaidka owns fleet of taxi and the following information’s are available from the records
maintained by him:
Numbers of taxis 10
Cost of each taxi Rs. 20,000
Salary of manager Rs. 600 p.m.
Salary of accountant Rs. 500 p.m.
Salary of cleaner Rs. 200 p.m.
Salary of mechanic Rs. 400 p.m.
Garage rent Rs. 600 p.m.
Insurance premium 5% per annum
Annual tax Rs. 600 per taxi
Driver’s salary Rs. 200 p.m. per taxi
Annual repair Rs. 1,000 per taxi
Total life of a taxi is about 2,00,000 kms. A taxi runs in all 3,000 kms. in a month of which 30% it
runs empty. Petrol consumption is 1 litre for 10 kms. @ Rs. 1.80 per litre. Oil and other sundries
are Rs. 5.00 per 100 kms. Analyse the cost of running a taxi per km.
12. Distinguish between allocation and apportionment of overheads. Mention also the bases of
apportionment of expense.
SECTION D – K5 (CO4)
Answer any ONE of the following in 250 words (1 x 20 = 20)
13. The following details are available from a company’s books.
Stock of materials 1-1-2020 Rs. 12,800
Stock of finished goods 1-1-2020 Rs. 28,000
Purchases during the year Rs. 2,92,000
Production wages Rs. 1,98,000
Sales of finished goods Rs. 5,92,000
Stock of raw materials 31-12-2020 Rs. 13,600
Stock of finished goods 31-12-2020 Rs. 30,000
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 Works overhead Rs. 43,736
Office and general expenses Rs. 35,547
The company is about to send a tender for a large plant. The costing department estimates that
materials required would cost Rs. 20,000 and wages for making the plant would cost Rs.12,000.
Tender is to be made keeping net profit of 20% on selling price. State what would be the amount
of the tender, if based on the usual percentages.
14. a). Analyse the earnings of workers A, B and C under Straight Piece Rate System and Merrick’s
Multiple Piece Rate System from the following particulars: (10 Marks)
Normal Rate per Hour - Rs. 5.40
Standard Time per Unit - 1 Minute
Output per day is as follows:
Worker A - 390 Units
Worker B - 450 Units
Worker C - 600 Units
Working hours per day are 8.
b). Calculate total earnings and effective earnings per hour from the following data by (i) Halsey
plan and (ii) Rowan Plan. (10 Marks)
Standard time to complete a job - 12 hours
Time taken by workers
Name of the worker A B C D E
Actual time taken (hrs.) 10 8 4 15 12
Standard rate per hour Rs. 10
SECTION E – K6 (CO5)
Answer any ONE of the following in 250 words (1 x 20 = 20)
15. Modern Manufacturers Ltd., have three production departments P1, P2 and P3 and two service
departments S1 and S2, the details pertaining to which are as under:
P1 P2 P3 S1 S2
Direct wages Rs. 30,000 20,000 30,000 15,000 5,000
Working hours 3,070 4,475 2,419 - -
Value of machine (Rs.) 6,00,000 8,00,000 10,00,000 50,000 50,000
H.P. of machine 60 30 50 10 -
Light points 100 150 200 100 50
Floor space (Sq. feet) 20,000 25,000 30,000 20,000 5,000
The following figures extracted from the accounting records are relevant. Rent Rs. 15,000;
General Lighting Rs. 6,600; Indirect wages Rs. 20,000; Power Rs. 15,000; Depreciation on
machines Rs. 100,000 and sundries Rs. 10,000.
The expenses of service departments are allocated as under
P1 P2 P3 S1 S2
S1 20% 30% 40% - 10%
S2 40% 20% 30% 10% -
Prepare the works cost of product ‘X’ which is processed for manufacture in departments P1 P2
and P3 for 4, 5 and 3 hours respectively, given that its direct material is Rs. 500 and direct labour
cost is Rs. 430.
16. The product of a company passes through two process A and B and then to finished stock. It is
ascertained that in each process normally 5% of the total weight is lost and 10% is scrap which
from process A & B realises Rs. 160 per ton and Rs. 200 per ton respectively. The following are
the figures relating to both the process.
Process A Process B
Materials in tons 2,000 140
Cost of materials per ton in rupees 250 400
Wages in rupees 56,000 20,000
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 Manufacturing expenses in rupees 20,000 10,200
Output in tons 1,660 1,560
Prepare process Cost Accounts.

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