|Total No. of Questions — 8]||[Total No. of Printed Pages — 5|
|Time Allowed : 3 Hours||Maximum Marks : 100|
|All questions are compulsory.|
|Working notes should form part of the answer.|
|1.||Answer any five of the following:||5x2=10|
|(i)||Two workmen, A and B, produce the same product using the same material. A is paid bonus according to Halsey plan, while B is paid bonus according to Rowan plan. The time allowed to manufacture the product is 100 hours. A has taken 60 hours and B has taken 80 hours to complete the product. The normal hourly rate of wages of workman A is Rs.24 per hour. The total earnings of both the workers are same. Calculate normal hourly rate of wages of workman B.||(0)|
|(ii)||Distinguish between product cost and period cost.||(0)|
|(iii)||A lorry starts with a load of 24 tonnes of goods from station A. It unloads 10 tonnes at station B and rest of goods at station C. It reaches back directly to station A after getting reloaded with 18 tonnes of goods at station C. The distance between A to B, B to C and then from C to A are 270 kms, 150 kms and 325 kms respectively. Compute ‘Absolute tonnes kms’ and ‘Commercial tones–kms’.||(0)|
|(iv)||Following details relating to product X during the month of April, 2009 are available: |
Standard cost per unit of X :
Materials : 50 kg @ Rs.40/kg
Actual production : 100 units
Actual material cost : Rs.42/kg
Material price variance : Rs.9,800 (Adverse)
Material usage variance : Rs.4,000 (Favourable)
Calculate the actual quantity of material used during the month April, 2009.
|(v)||Discuss the components of budgetary control system.||(0)|
|(vi)|| Following information is available for the first and second quarter of the year 2008–09 of ABC Limited: |
You are required to segregate the semi–variable cost and calculate :
|2.|| Following is the sales budget for the first six months of the year 2009 in respect of PQR Ltd.: |
Finished goods inventory at the end of each month is expected to be 20% of budgeted sales quantity for the following month. Finished goods inventory was 2,700 units on January 1, 2009. There would be no work–in–progress at the end of any month.
|3.||(a)|| A manufacturing company has disclosed a net loss of Rs.2,13,000 as per their cost accounting records for the year ended March 31, 2009. However, their financial accounting records disclosed a net loss of Rs.2,58,000 for the same period. A scrutiny of data of both the sets of books of accounts revealed the following information: |
Prepare a Memorandum Reconciliation Account.
|(b)|| Describe briefly, how joint costs upto the point of separation may be apportioned amongst the joint products under the following methods: |
|4.||Answer any three of the following:||3x3=9|
|(i)||Discuss accounting treatment of spoilage and defectives in cost accounting.||(0)|
|(ii)||Discuss accounting treatment of idle capacity costs in cost accounting.||(0)|
|(iii)|| A contract is estimated to be 80% complete in its first year of construction as certified. The contractee pays 75% of value of work certified, as and when certified and makes the final payment on the completion of contract. Following information is available for the first year: |
Calculate the value of work- in-progress certified and amount of contract price.
|(iv)||Product Z has a profit–volume ratio of 28%. Fixed operating costs directly attributable to product Z during the quarter II of the financial year2009–10 will be Rs.2,80,000. |
Calculate the sales revenue required to achieve a quarterly profit of Rs. 70,000.
|5.||Answer any five of the following:||5x2=10|
|(i)||Write a short note on functions of Treasury department.||(0)|
|(ii)||Discuss the concept of American Depository Receipts.||(0)|
|(iii)||How is Debt service coverage ratio calculated? What is its significance?||(0)|
|(iv)||Discuss conflict in profit versus wealth maximization objective.||(0)|
|(v)||Discuss the concept of Debt–Equity or EBIT–EPS indifference point, while determining the capital structure of a company.||(0)|
|(vi)||Discuss the benefits to the originator of Debt Securitization.||(0)|
|6.|| Balance Sheets of RST Limited as on March 31, 2008 and March 31, 2009 are as under: |
|7.||(a)|| The capital structure of MNP Ltd. is as under: |
|(b)||A company is required to choose between two machines A and B. The two machines are designed differently, but have identical capacity and do exactly the same job. Machine A costs Rs. 6,00,000 and will last for 3 years. It costs Rs. 1,20,000 per year to run. |
Machine B is an ‘economy’ model costing Rs. 4,00,000 but will last only for two years, and costs Rs. 1,80,000 per year to run. These are real cash flows. The costs are forecasted in rupees of constant purchasing power. Opportunity cost of capital is 10%. Which machine company should buy? Ignore tax.
PVIF0.10, 1 = 0.9091, PVIF0. 10, 2 = 0.8264, PVIF0. 10, 3 = 0.7513.
|8.||Answer any three of the following:||3x3=9|
|(i)||A firm maintains a separate account for cash disbursement. Total disbursements are Rs.2,62,500 per month. Administrative and transaction cost of transferring cash to disbursement account is Rs. 25 per transfer. Marketable securities yield is 7.5% per annum. |
Determine the optimum cash balance according to William J Baumol model.
|(ii)||A firm has a total sales of Rs. 12,00,000 and its average collection period is 90 days. The past experience indicates that bad debt losses are 1.5% on sales. The expenditure incurred by the firm in administering receivable collection efforts are Rs. 50,000. A factor is prepared to buy the firm’s receivables by charging 2% commission. The factor will pay advance on receivables to the firm at an interest rate of 16% p.a. after withholding 10% as reserve. Calculate effective cost of factoring to the firm. Assume 360 days in a year.||(0)|
|(iii)||Explain the concept of discounted payback period.||(0)|
|(iv)||Discuss the composition of Return on Equity (ROE) using the DuPont model.||(0)|