Reg. No ..................... Name ...............................

23U609

B. COM DEGREE END SEMESTER EXAMINATION : MARCH 2023

SEMESTER 6 : COMMERCE
COURSE : 19U6CRCOM19: APPLIED COST ACCOUNTING
(For Regular - 2020 Admission and Supplementary - 2019 Admission)
Time : Three Hours Max. Marks: 75
PART A
Answer any 10 (2 marks each)
1. What is Job Cost Sheet?
2. Udaya Ltd assembles electronic units for a customer. Annual requirement 30,000 units. Set
up cost Rs. 80 per set up. Holding cost (i) variable cost per unit Rs.12 (ii) fixed interest on
capital ed up 15% per year. Calculate total cost per year when the batch sizes of 500, 1,000,
1,500, 2,000 and 2,500 units are considered.
3. Vinoba travels Ltd. runs the following fleet of buses within the limits of Rickshnagar:
10 buses of 50 passenger capacity each
15 buses of 40 passenger capacity each
On an average, each bus makes 10 trips a day covering a distance of 8 km in each trip.
Normally 75% of the seats are occupied. All the buses run for 30 days in a month. But the
annual records show that 5 buses are kept off the roads each day foe repairs. Calculate the
effec ve passenger km for the month of March 2022.
4. Explain the different methods of computa on of profit on incomplete contracts.
5. Calculate the profit which can be credited to profit and loss account.
No onal profit Rs.67,600
Percentage of work completed 24%
Percentage of cash received 80%
6. Name five industries in which process cos ng is used.
7. Define joint products.
8. What is angle of incidence?
9. What is margin of safety?
10. Sales Rs.1,00,000
Profit Rs.20,000
p/v ra o 50%
Find out BEP
11. Dis nguish between forecast and budget.
12. State the main objec ves of budgetary control.
(2 x 10 = 20)
PART B
Answer any 5 (5 marks each)
13. Following direct costs were incurred on Job No. 605 of a company.
Material ₹ 8,020.

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 Wages:
Department A 60 hours at ₹ 6 per hour
Department B 40 hours at ₹ 4 per hour
Department C 20 hours at ₹ 10 per hour
Overhead expenses for these three departments were es mated as follows:
Variable overhead:
Department A ₹ 10,000 for 5,000 labour hours.
Department B ₹ 6,000 for 1,500 labour hours.
Department C ₹ 4,000 for 500 labour hours.
You are required to calculate the cost of Job No. 605 and price to be quoted for the Job to
give a profit of 25% on selling price.
14. Compute cost per running kilometre from the following data of a truck.
Es mates life of vehicle : 1,00,000 kms
Annual running kilometres : 15,000 kms
Rs.
Cost of vehicle 25,00,000
Road License (Annual) 75,000
Insurance (Annual) 60,000
Garage rent (Annual) 30,000
Supervision and salaries (Annual) 1,60,000
Driver’s wages per hour 300
Cost of fuel per litre 90
Repairs and maintenance per km 3
Tyre alloca on per km 2
Charge interest at 5% per annum on cost of vehicle. The vehicle runs 30 kms per hour on an
average and one litre of fuel gives 20km mileage.
15. In manufacturing the main product A, a company processes the resul ng waste material into
two by-products, B1 and B2. Using reverse cost method of by-products, prepare a
Compara ve Profit and Loss Statement of the three products from the following data:
Total cost upto separa on point was Rs.68,000.
A B1 B2
Sales (all produc on) 1,64,000 16,000 24,000
Cost a er separa on 4,800 7,200
Es mated net profit 20% 30%
percentage to sale value

Es mated selling expenses as 20% 20% 20%

percentage of sales value

16. What is abnormal loss and abnormal gain? Explain the treatment of abnormal loss and
abnormal gain in process cost accounts.
17. What is P/V ra o? How is it calculated?

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18. A company has fixed expenses of Rs.90,000 with sales at Rs. 3,00,000 and a profit of
Rs. 60,000 during the first half year. If in the next half year the company suffered a loss of
Rs. 30,000, Calculate:
a) The P/V ra o, Break even point and margin of safety for the first half year.
b) Expected sales volume for next half year assuming that selling price and expenses remain
unchanged.
c) The break even point and margin of safety for the whole year.
19. Define budgetary control. What are its advantages and limita ons?
20. The following are the es mated transac on of Z Ltd. for the forthcoming period from March
2019 to September 2019:
Month Sales Purchases Wages Produc on Administra on Selling
₹ ₹ ₹ overhead Overheads overheads
₹ ₹ ₹

March 3,45,000 1,10,000 44,000 35,000 27,000 25,000

April 3,66,000 1,23,000 47,000 40,000 28,000 27,000

May 3,91,000 1,34,000 50,000 44,000 28,000 30,000

June 4,12,000 1,56,000 53,000 47,000 29,000 34,000

July 4,39,000 1,47,000 58,000 51,000 30,000 36,000

August 4,52,000 1,53,000 62,000 54,000 32,000 38,000

September4,11,000 1,45,000 66,000 59,000 32,000 40,000

Addi onal Informa on

i. Cash sales are 50% of total sales. Half of credit sales is expected to be received in the
month following sales and the other half of credit sales is expected to be collected in the
second month following sales.
ii. All purchases are on credit and expected to be paid in the second month following the
purchase.
iii. All wages are paid in the first week of the next month following the month in which
wages are incurred.
iv. Half of all overheads are paid in the same month and the rest is paid in the following
month.
v. A dividend of ₹ 60,000 is declared in the month of April and is expected to be paid in the
month of June.
vi. Machinery is purchased for ₹1, 00,000 in March; 2019.payment is expected to be made in
two equal instalments in the months of May and June.

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 vii. Advance tax payable is ₹ 75,000 per quarter in June and September.
viii. Cash balance expected on 1st may 2019 is ₹ 45,000.
Prepare a cash budget for 5 month from May 2019
(5 x 5 = 25)
PART C
Answer any 3 (10 marks each)
21. What is performance budge ng? Describe the various steps in performance budge ng.
Explain the advantages and disadvantages.
22. M/s Sriram building contractors began to trade on 1st January 2021. The following was the
expenditure on a contract for Rs 9,00,000
Rs
Materials issued from stores 2,25,500
Materials purchased 60,500
Plant installed at cost 1,05,000
Wages paid 3,60,000
Direct expenses paid 33,000
Establishment expenses 30,000
Wages accrued on 2021 December 31st 7,500

Of the plant and materials charged to contract, the plant which cost Rs 7,500 and materials
cos ng Rs 6,000 were lost. Materials cos ng Rs 3,750 were sold at a profit of Rs 750. On
December 31st, the plant cos ng Rs 5,250 was returned to store.
Work cer fied was Rs 7, 20,000 and 80 % of the same was received in cash. The cost of work
done but not cer fied was Rs 4,500. Charge deprecia on on plant at 10% per annum.
Prepare the contract account.
23. The finished product of a manufacturing company passes through three processes – I , II and
III. The normal wastage in each process is 5%, 7% and 10% for the processes I, II and III
respec vely – calculated with reference to the number of units fed into each process. The
scrap generated out of wastage has a sale value of 70 paise per unit, 80 paise per unit and
Rs.1 per unit in the process I, II and III respec vely. The output of each process is transferred
to the next process and the finished product emerges from the process III and transferred to
stock. There was no stock of work in progress in any process in a par cular month. The
details of cost data for the month are given below-

I II III
Materials used 1,20,000 40,000 40,000
Direct labour cost 80,000 60,000 60,000
Produc on expenses 40,000 40,000 28,000
Output (in units) 38,000 34,600 32,000
Process I was fed with 40,000 units of raw input at a cost of Rs.3,20,000. Prepare the
necessary accounts.

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24. Present the following informa on to show to the management

1. Marginal product cost and contribu on per unit

2. The total contribu on and profit resul ng from each of the following sales mixture
3. The proposed sales mix to earn a profit of Rs 250 and Rs.300 with total sales of A & B
being 300 units

Par culars Product A Product B

Direct material (per unit) 10 9
Direct wages (per unit) 3 2
Selling price (per unit) 20 15
Fixed expenses Rs.800
Variable expenses are allocated to product as 100% of direct wages Sales mixture
a) 100 units of product A and 200 units of product B
b) 150 units of product A and 150 units of product B
c) 200 units of product A and 100 units of product B
Recommend which of the above sales mixture should be adopted.
25. Following are the budget expenses for the produc on of 10,000 units of a product.
Par culars Per unit cost
Materials 75
Labour 15

Variable Overhead 20
Fixed Overhead (Rs. 1,00,000) 10

Direct expenses variable 10

Selling expenses (10% fixed) 12
Distribu on expenses 8

Administra on expenses (Rs. 60,000) 6

Prepare a budget for 6,000 units and 8,000 units. Administra on expenses are fixed for all
levels of produc on.
(10 x 3 = 30)

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