Mahatma Gandhi University M.Com Accounting and Finance December 2012 Question paper

University:  Mahatma Gandhi University
Course:  M.Com
Subject :  Accounting and Finance
Year of  Question Paper : 2012

M.com Degree Examination, December 2012
Third Semester
Paper XI - ADVANCED COST ACCOUNTING


Section A
Answer all questions.
Each questions carries 2 marks.
Each answer not to exceed three sentences.

1. What are the objectives of cost accounting.
2. What is meant by cost unit?
3. What is prime Cost?
4. What do you mean by P/V ratio?
5. Define standard costing?
6. Explain margin of safety.
7. What is zero base budgeting?
8. Compute break even point
Fixed cost Rs. 40,000
Variable cost Rs.2 p.u.
Selling Price Rs. 10 p.u.
9. Explain the concept of productivity.
10.What is sunk cost?

Section B
Answer any five questions in about a page.
Each question carries 5 marks.

11. Explain the assumptions underlying break even analysis.
12. Compare cost reduction and cost control.
13. Explain the methods disposition of variance.
14. List down any five objectives of budgeting control.
15. Draw a material procurement budget (quantitative)from the following information:
Estimated sales of a product 40,000 units
Each unit of the product requires 3 units of Material A and 5 units of material B.
Estimated opening balances at the commencement of the next year.
Finished Product 5,000 units
Material A 12,000 units
Material B 20,000 units
Materials on order:
Material A 7,000 units
Material B 11,000 units.
The desirable closing balances at the end of the next year.
Fished Product 7,000 units
Material A 15,000 units
Material B 25,000 units
Materials on order:
Material A 8,000 units
Material B 10,000 units.

16. During the month of May, the following data apply:
Raw material Standard
X 60 units at Rs.25 .... 1,500
Y 40 units at Rs.50 .... 2,000
...... .......
100 .... 3,500
Less: Loss 30 .... ...
....... .......
70 3,500
....... .......
Raw material Actual
X 56 units at Rs.25 .... 1,400
Y 44 units at Rs.50 .... 2,200
....... .......
100 3,600
Less: Loss 26 ...
....... .......
74 3,600
....... .......
The standard loss in 30 per cent. Calculate:
(a) Material Yield variance.
(b) Material Mix variance.

17.sales 4,000 units at Rs. 10 p.u.
Break Even Point= 1,500 units 
Fixed cost = Rs. 3,000
What is the amount of (a) Variable cost
(b) Profit?
18. Journalise the following transactions assuming cost and financial accounts are integrated:
Rs.
Wages paid (20% indirect .... 15,000
Materials Purchased .... 22,500
Materials issued to Production .... 18,250
Wages changed to Production .... 9,700.

Section C 
Answer any one question.
It carries 10 marks.

19. What is integrated accounting? State the advantages and disadvantages of integrated accounting.

20. The Manager of Repairs and Maintenance Department in response to a request, Submitted the following estimates for his department that are t be used to construct a flexible budget to be used during the caning budget year.
Details of cost Planned at 6,000 direct Planned at 9,000 direct
repair hours repair hours
Employee salaries 30,000 ... 30,000
Indirect repair materials 40,200 ... 60,300
Misc.cost etc. 13,200 ... 16,800
(a) Prepare a flexible budget for the department up to activity level of 10,000 repair hours.
(rise increment of 10,000)
(b) What would be the budget allowance at 8,500 direct repair hours?

Section D
Answer any one question. 
The question carries 20 marks.

21. What are the preliminaries is establishing a system of standard costing?

22. Two companies which have the following operating details decide to merge:
Company I Company II
Capacity utilization 90% 60%
Sales (Rs. lakhs) 540 300
Variable cost 396 225
Fixed cost 80 50 
Assuming proposal is implemented, calculated:
(i) Break even point of the merged plant and capacity utilization at that stage.
(ii) Profitability of the merged plant at 80% capacity utilization.
iii) Sales turnover of the merged plan to earn a profit of Rs. 75 lakhs..

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