JO VTS DEGA WAHI AYEGA

B.COM (2ND SEMESTER)

COST &
MANAGEMENT
ACCOUNTING – I

HONS & GEN

GROUP – A
FULL 20(MARKS)

SANDIP
KUMAR

FOLLOW ON: /
VTS CLASSES

BY SANDIP KUMAR CONTACT NO. - 8617716211

 GROUP – A
1. A transport company operates 10 buses between two towns, which are
20-kms apart. Seating capacity of each bus is 50 passengers. Of the buses
20% remain idle for maintenance and each bus makes 3 trips a day.
On outward journey 80% of the seating capacity is utilised, while on return
journey only 60% of the seating capacity is utilised.
You are required to calculate the passenger-km per month assuming 25 effective
days in a month.

2. Following particulars are available relating to a production department:

Factory overhead incurred ₹ 60,000;
Direct wages paid ₹ 80,000 and Labour Hours worked ₹ 4,000; You are
required to calculate overhead recovery rates using two methods.
Using the rates as above, calculate the Works Cost of a product for which
Direct Materials used ₹ 120, Direct wages incurred ₹ 80 and Labour hours
worked 5.

3. Following information is available from the books of a company:

Annual requirement of material A-12000 units @ 6 per unit.
Every order costs 200 and inventory carrying charges for one unit of material
is ₹ 1.20 p.a. on an average. Safety stock is 20 days consumption and time
required to get a new supply is 15 days. You are required to -
(a) Find EOQ and Ordering level.
(b) State whether the item should be purchased in lots of 6000 units at a time,
if a lot discount @ 3% is allowed for that quantity.
(Assume 1 year = 300 effective days.)

4. The following transactions took place in respect of a raw material during

the month of January , 2022:
Date Particulars kg. rate per kg (₹)
(January , 2022)
1 Balance 1,000 9
6 Purchased 1,500 8
10 Issued 1,800 -
13 Shortage 100 -
19 Purchased 900 10
26 Issued 1,000 -
Prepare the Stores Ledger Account for the material using LIFO method.

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 5. Pass necessary journal entries in cost records for the following.
(a) Direct materials amounting to ₹ 38,000 issued to production
(b) Goods completed and transferred to finished stock ₹ 85,000
(c) Materials purchased ₹ 42,000 in cash and ₹ 27,000 on credit
(d) Depreciation on factory building ₹ 7,000
(e) Factory overhead recovered ₹ 15,000

6. Following information is available from the books of a company :

Annual requirement of material A: 12000 units to produce 3,000 units of
product Z.
Every order costs ₹ 200 and inventory carrying charges are ₹ 1.20 per unit
per annum. Safety stock is 20 days consumption and time required to get a
new supply is 15 days.
Find (i) EOQ (ii) Ordering level (iii) Minimum level (iv) Maximum level.
(Assume 1 year = 300 effective days.)

7. Mr. Gupta, the owner of a taxi, provides you with the following
information:
Cost ₹7,60,000 (useful life 2,00,000 km and residual value 40,000)
Driver’s salary ₹ 6,000 per month
Repair charge ₹ 7,200 per annum
Garage rent ₹ 1,200 per month
Road tax and insurance ₹ 36,000 per annum
Diesel consumption ₹10 km per litre @ ₹90 per litre
Maximum sitting capacity 4

The taxi runs on an average 120 km per day for an average of 25 days a month
20% of the distance has been run without any passenger.
Calculate cost per kilometer.

8. From the following particulars calculate the machine hour rate for Machine
No. 707:
Total standing charges for the year 5,400
Cost of power per unit 1.20
The machine consumes 4 units of power per hour.
Machine No. 707 is expected to work 2,000 hours p.a. out of which normal
idle time is estimated at 8% of total working hours and time for routine
maintenance is estimated at 40 hours p.a.

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 9. The following particulars are available in respect of a contract as on
31.03.2019
₹
Contract price 10,00,000
Total cost of contract till 31.03.2019 5,50,000

Cost of uncertified work 25,000

Cash received (retention money being 15%) 5,31,250

Compute the amount of profit that may be transferred to Profit & Loss Account
and the value of Work- in-Progress.

10.State with reasons the behaviour of following costs and calculate cost for
2,800 units.

Production 1,500 units 2,000 units

Cost-A( ₹) 12,000 16,000
Cost-B( ₹) 9,000 9,000
Cost-C( ₹) 7,000 8,000

11. A company estimated its cost as below.

Material -₹14,000, Wages- ₹10,000, Factory overhead-60% of Wages.
Administrative & Selling overhead (excluding commission) - 20% of Works
Cost.
If Sales Commission is 5% on sales and rate of profit is 25% on cost, find the
selling price.

12.A Transport company maintains a fleet of 10 trucks for transporting goods

from Kolkata to Asansol via Durgapur. The distance from Kolkata to
Durgapur is 250 kms. and that from Durgapur to Asansol is 30 kms. Each
truck which operates 26 days in a month on an average, starts everyday
from Kolkata with a load of 10 tons. It unloads 6 tons at Durgapur and rest
of the goods at Asansol. It comes back to Kolkata after getting reloaded
with goods weighing 8 tons at Asansol.
You are required to calculate cost per ton-km. When the total monthly operating
expenses for a truck ₹ are 1,89,540.

13.A manufacturing company provides you with a summary of its production

costs at three production levels as follows:

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Cost Items 1000 Units 2000 Units 3000 Units
A 5,000 10,000 15,000
B 10,000 10,000 10,000
C 3,000 ₹4,000 ₹5,000
18,000 24,000 30,000
a) Indicate the cost behaviour of each item of cost.
(b) What would be total costs if the company wants to produce 2400 units?

14.The following data are available in respect of the material used in

Progressive Engineering Co. for the year 2016:
Material purchase price per unit - ₹12
Interest per unit per month - ₹ 0.10
Clerical and Administration cost per order - ₹ 200
Insurance charges per annum - 12%
Wastage of material per unit per quarter - 2%
Cost of buying office, inspection and accounting per order - ₹ 400
Quarterly consumption of materials - 3000 Units.
You are required to compute:
(a) Best Ordering Quantity of the material buying;
(b) Time gap between two consecutive orders and
(c) Total inventory cost at optional policy of buying

15. In a factory a job can be executed either by workman X or Y, X takes 32

hours to complete the job while Y finishes it in 30 hours. The standard time
to finish the job is 40 hours. The raw material input cost and normal rate of
wages are same for both the workers. X is entitled to receive bonus
according to Halsey Plan, Y is paid bonus under Rowan Plan. Works
overhead is recovered in the job @ ₹15 per labour hour worked. The factory
cost of the job comes to ₹10,400 irrespective of the workman engaged.
Find out the normal rate of wages per hour.

16. Calculate total monthly remuneration of workers A, B and C on the basis

of the following information for the month of March, 2017:
(a) Standard production for each worker-2000 units.
(b) Rate of wages-₹ 5 per unit.
(c) Bonus-₹ 100 for each 2% increase over 90% of the standard.
(d) Dearness allowance - 50% of piece wage.
The units completed by the three workers were as under:
A-1900 units; B-1760 units and C-2120 units.

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 17. In a factory, standard time for a job is 84 hours. The hourly rate of wage
is ₹ 50.00. Halsey- premium plan is in operation at the factory. Jayanta, a
worker, completed the job at less than stan- dard time and his effective
hourly rate of wage ₹ 60.00.
What will be his total earning if he worked under Rowan-premium plan?

18.The Purchase Manager of X Ltd. buys its annual requirement of materials

of 36,000 units in six instalments.
Each unit cost is ₹ 1.00 and the ordering cost is ₹ 25.00 per order. The stock
holding cost is 20% p.a. of unit value.
You are required to ascertain-
(a) What is the annual inventory cost under the existing inventory policy of the
purchase manager? (b) How much money would be saved by employing the
economic order quantity?

19. In an assembly shop of a Motorcycle factory, 4 workmen P, Q, R and S work

together as team. They are paid on group piece rate and they work
individually on day-rate jobs. In a 46 hour week, the following hours have
been spent by P, Q, R and S on group piece work, viz. P-40 hours, Q-4 hours,
R-30 hours and S-20 hous. The balance of the time has been booked by
each worker on da rate jobs. their hourly rates are: P- ₹ 5.00; Q- ₹ 7.50; R- ₹
10.00; S- ₹ 10.00.
The group piece rate is ₹ 10.00 per unit and the team has produced 180 units.
Calculate the gross weekl earning of each workman taking into
consideration that each worker is entitled to dearness allowance o 25% of
time wages.

20. From the following data, calculate the labour-turnover rate by applying:
(a) Separation method
(b) Replacement method
(c) Flux method.
Number of workers on the payroll:
-at the beginning of the year - 1,800
--at the end of the year - 2,000.
During the year, 20 workers left, 80 workers were discharged and 300 workers
were recruited. Of these, 50 workers are recruited in the vacancies of those
left, while the rest were engaged for an expansion scheme.

21. XYZ Ltd. furnished the following information of its factory:

Normal working hours - 40 hours per week

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Normal weekly loss of hours (due to maintenance) - 4 hours per machine
Number of machines worked -15
Estimated annual overhead - ₹1,55,520
Estimated direct wage rate - ₹ 3.00 per hour
Number of weeks worked per year - 48 weeks
Actual results in respect of a 4 week period are:
Overhead incurred -₹ 15,000

Wages incurred - ₹ 7,000

You are required to-
(a) Calculate the overhead rate per machine hour.
(b) Calculate the amount of under/over absorption.

BY SANDIP KUMAR CONTACT NO. - 8617716211