Q1. The product of a company passes through three distinct processes to completion. They are known as A, B & C.

from past experience it is ascertained that loss is incurred in each process as under: Process A 2%, Process B 5%, and Process C 10%. In each case the percentage of loss is computed on the number of units entering the process concerned. The loss of each process possesses a scrap value. The loss of processes A & B is sold at ` 5 per 100 units and that of process C at ` 20 per 100 units. The output of each process passes immediately to the next process and the finished units are passed from Process C into stock. The following information is obtained: Particular Material Labor Overheads Process A 6,000 8,000 1,500 Process B 4,000 6,000 1,749 Process C 2,000 3,000 3,460

20,000 units have been issued to Process A at a cost of ` 10,000. The output of each process has been as under (units): Process A 19,500, Process B 18,800, and process C 16,000. There is no work in progress in any process. Prepare Process Accounts. Calculation should be made to the nearest Rupee.

Q2. Mr. Reddy, runs a tempo service in the town of Tirupathi and has two vehicles. From the following data, you are required to compute the cost per running km. Vehicle A Vehicle B ` ` Cost of vehicle 25,000 15,000 Road license fee per year 750 750 Supervision (yearly) 1,800 1,200 Drivers wages per hours 4.00 4.00 Cost of fuel per litre 1.50 1.50 Repairs and maintenance per km 1.50 2.00 Tires cost per km. 1.00 0.80 Garage rent per year 1,600 550 Insurance yearly 850 500 Kms run during the year 6 5 Estimated life of vehicles (km) 15,000 6,000 1,00,000 75,000 Charge interest at 10% on the cost of vehicle. The vehicles run 20 Kms per hour on an average.

Q3. From the following particulars extracted from the books of M/s. Kalpana metals Ltd. which is producing 5,000 units. You are required to prepare a flexible budget for production levels of 4,000 units and 6,000 units. Materials Cost Labour Cost Power Repairs and maintenance Stores Inspection Depreciation Admin Overheads Selling Overheads 25000(100% varying) 15000(100% varying) 1250(80% varying) 2000(75% varying) 1000(100% varying) 500(20% varying) 10000(100% varying) 5000(25% varying) 3000(50% varying)

Q4. From the following prepare the cash budget for 1.6.97 to 31.10.97. Opening cash balance with ` 40,000. Month April May June July August September October Sales 3,40,000 3,20,000 3,64,000 3,10,000 3,30,000 4,00,000 3,60,000 Selling Expenses 7,000 7,500 6,500 6,800 7,400 7,000 6,000 Purchases 80,000 84,000 83,000 83,000 76,000 68,000 70,000 Wages 15,000 16,000 16,800 12,000 18,000 16,000 17,000 Factory Expenses 10,000 11,000 8,000 10,500 12,000 9,600 8,000

a) One month credit is allowed by the supplier and to the customers. b) Lag in payment: 1. Wages 2. Factory Expenses 3. Selling Expenses 1 month 1/2 month 1 month

c) Machinery to be purchased is September of ` 1, 00,000/- is payable on delivery. d) Building to be purchased in June for ` 2, 50,000/- is payable in 2 equal installments in July and august.

Q5. What do you mean by classification of costs? Enumerate the different types of costs.

Q6. The turn-over and profits during two periods were as follows: Particular Period I ` 5,00,000 50,000 Period II ` 7,50,000 1,00,000

Sales .. . Profit .. . ... . Calculate: (a) PV Ratio, (b) Break-Even Sales, (c) Sales required to earn a profit of ` 1, 25,000, (d) Profit earned when sales are ` 3, 50,000.

Q7. A factory produces 24000 units. The cost sheet gives the following information: Direct Material Direct Wages Variable Overheads Semi-variable overheads Fixed Overheads Total Cost Rs. 120000 Rs. 84000 Rs. 48000 Rs. 28000 Rs 80000 360000

The product is sold for Rs. 20 per unit. The management proposes to increase the production by 3000 units for sales in the Foreign market. It is estimated that the semi-variable overheads will increase by Rs. 1000. But the product will be sold at Rs. 14 per unit in the foreign market. However no additional capital expenditure will be incurred. The management seeks your advice as a cost accountant. What will you advise them?

Q8. Q1. A company annually manufactures and sells 20,000 units of a product, the selling price of which is Rs. 50 and profit earned is Rs. 10 per unit. The analysis of cost of 20,000 units is: Material cost Rs. 3,00,000 Labour cost Rs. 1,00,000 Overheads Rs. 4,00,000 (50% variable) You are required to compute: (i) Break-even sales in units and in Rupees

(ii) (iii)

Sales to earn a profit of Rs. 3,00,000 Profit when 15,000 units are sold

Q9. Bharat Electronics Ltd. Furnishes the following information for 10,000 T.V. valves manufactured during the year, 1991: (Rs.) Material Direct Wages Power and Consumable Stores Factory Indirect Wages Lighting of factory Defective work (cost of rectification) Clerical salaries and Management Expenses Selling Expenses Sale proceeds of Scraps Plant repairs, Maintenance and Depreciation The net selling price was Rs. 32 per unit and all the units were sold. As from 1st January, 1992, the selling price was reduced to Rs. 31.00 per unit. It was estimated that production could be increased in 1992 by 50% utilizing spare capacity. Rates for materials and direct wages will increase by 10%. You are required to prepare: (a) Cost sheet for the year, 1991, showing various elements of cost per unit, and (b) Estimated Cost and Profit for 1992 assuming that 15,000 units will be produced and sold during the year and factory overheads will be recovered as a percentage of direct wage and office and selling expenses as percentage of work cost. Q10. Write explanatory note on Responsibility Accounting & Explain the essential ingredients of a system of Responsibility Accounting. ********************* 90,000 60,000 11,000 13,500 6,000 2,000 33,000 5,400 2,000 11,500