This Paper has

**28**answerable questions with**0**answered.1—5(CMA)Revised Syllabus | |

Time Allowed : 3 Hours | Full Marks : 100 |

The figures in the margin on the right side indicate full marks |

Answer Question No. 1 which is compulsory and any five from the rest. |

Marks |

1. | (a) | Match the following correctly.
| 1x5 | (0) | ||||||||||||||||||||||||||||||||||||||||||||||||||||

(b) | State whether the following are True (T) or False (F). | 1x5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||

(i) | Standard costing can be introduced in all types of manufacturing industries. | (0) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||

(ii) | Defective and spoilage mean the same for cost accounting purposes and require the same treatment. | (0) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||

(iii) | When a factory operates at full capacity, fixed cost also become relevant for ’Make or Buy’ decisions. | (0) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||

(iv) | Net profit will be the same under Marginal costing and Absorption costing if no inventory exists. | (0) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||

(v) | Principal Budget Factor is a factor controllable by the Manager of the Budget Center. | (0) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||

(c) | Choose the correct answer from the answers given for each of the following questions. Indicate workings briefly: | 2x5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||

(i) | A company has a margin of safety of Rs. 40 lakhs and earns an annual profit of Rs. 10 lakhs. If the fixed costs amount to Rs. 20 lakhs, annual sales will be ________
| (0) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||

(ii) | A chemical is manufactured by combining two standard items of input A (standard price Rs. 60/kg) and B (Rs. 45/kg) in the ratio 60%:40%. Ten per cent of input is lost during processing. If during a month 1200 kg of the chemical is produced incurring a total cost of Rs. 69,600, the total material cost variance will be ________
| (0) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||

(iii) | A factory makes use of a component purchased from the market for assembling its final product. Current usage varies between 300 and 450 units per week and replenishment time is normally two weeks but can go up to five weeks. The minimum stock level of the component is _______ units.
| (0) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||

(iv) | In a factory where piece work system is followed with guaranteed minimum wages of Rs. 120 (for eight hours), incentive payments are made according to Rowan Bonus Scheme. The standard time per unit is 10 minutes. If in a five-day week of 40 working hours the actual production is 300 units, the total earnings of the worker is ________
| (0) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||

(v) | A company has an annual sales of Rs. 120 lakhs entirely on credit. It keeps an average inventory sufficient to meet sales demand for half month and gives its customers one month credit. Its current liabilities average Rs. 9 lakhs. The company must maintain cash (including bank balance) to have a current ratio of 2. Its cash balance will be ________
| (0) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||

2. | Briefly distinguish between the following (any four only): | 4x4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||

(a) | Fixed budget and Flexible budget; | (0) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||

(b) | Marginal cost and Differential cost; | (0) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||

(c) | Joint products and By-products; | (0) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||

(d) | Funds Flow and Cash Flow; | (0) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||

(e) | Cost control and Cost reduction. | (0) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||

3. | A Company has three production departments P, Q, R and two service departments Mand C. The following details in respect of indirect expenses incurred are furnished for a typical month:
Following further data are available for distribution of overheads:
Calculate
| 12+4 | (0) | |||||||||||||||||||||||||||||||||||||||||||||||||||||

4. | (a) | Mention the different methods of by—product cost accounting. | 4 | (0) | ||||||||||||||||||||||||||||||||||||||||||||||||||||

(b) | In a chemical plant four different products viz., AB, BC, CD and DD emerge from the input of crude oil. Product AB can be sold immediately, but the remaining three products require further processing before they cn be marketed. In a month, 40,000 litres of crude oil were procured at a cost of Rs. 30 per litre and processed at a cost of Rs. 3 lakhs. The details of output obtained, further processing cost, selling price per unit etc. are given below:
Prepare:
| 8+4 | (0) | |||||||||||||||||||||||||||||||||||||||||||||||||||||

5. | (a) | Mention the basic assumptions made for ’Breakeven Analysis’ and examine how for they are valid. | 6+10 | (0) | ||||||||||||||||||||||||||||||||||||||||||||||||||||

(b) | Two cement plants decide to merge to earn higher profits. The working results of the two plants for last year were as follows:
After merger, the management wants information on the following:
| (0) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||

6. | A building can be constructed by engaging a gang of workers as per details given below, for 100 working days of eight hours each.
Actual completion of the work however took 104-days of eight hours each. This includes 16 hours of stoppages due to heavy rains. The actual number of workers engaged and the actual rates paid are given below:
Calculate the following variances:
| 16 | (0) | |||||||||||||||||||||||||||||||||||||||||||||||||||||

7. | Globe Traders Ltd. has furnished its Balance Sheets as at 30.6.2005 and 30.6.2006 and as per details given below:
The following additional particulars are also given;
| 16 | (0) | |||||||||||||||||||||||||||||||||||||||||||||||||||||

8. | Write short notes on any four of the following: | 4x4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||

(a) | Application of marginal costing to price fixing; | (0) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||

(b) | Budgetary control and its objectives; | (0) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||

(c) | Methods for disposal of under/over–absorbed overheads; | (0) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||

(d) | Installation of a cost system; | (0) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||

(e) | Cost–plus contracts. | (0) |