|Total No. of Questions— 8]||[Total No. of Printed Pages—5|
|Time Allowed : 3 Hours||Maximum Marks : 100|
|Answers to questions are to be given only in English except in the cases of candidates who have opted for Hindi medium.|
If a candidate who has not opted for Hindi medium, answers in Hindi, his answers in Hindi will not be valued.
|All questions are compulsory.|
|Working notes should form part of the answer wherever appropriate,suitable assumptions should be made.|
|1.||Answer any five of the following:||5x2=10|
|(i)|| Using Taylor’s differential piece rate system, find the earning of A from the following particulars: |
|(ii)||Briefly discuss, how the synergetic effect help in reduction in costs.||(0)|
|(iii)||Explain in brief the explicit cost with examples.||(0)|
|(iv)||Explain briefly the conditions when supplementary rates are used.||(0)|
|(v)||The average annual consumption of a material is 18,250 units at a price of Rs. 36.50 per unit. The storage cost is 20% on an average inventory and the cost of placing an order is Rs. 50. How much quantity is to be purchased at a time?||(0)|
|(vi)||Enumerate the various methods of Time booking.||(0)|
|2.|| A company has three production departments (M1, M2 and A1) and three service department, one of which Engineering service department, servicing the M1 and M2 only. The relevant informations are as follows: |
The annual budgeted overhead cost for the year are
The following data are also available:
|3.||(a)|| AKP Builders Ltd. Commenced a contract on April 1, 2005. The total contract was for Rs. 5,00,000. Actual expenditure for the period April 1, 2005 to March 31, 2006 and estimated expenditure for April 1, 2006 to December 31, 2006 are given below: |
A part of the material was unsuitable and was sold for Rs. 18,125 (Cost being Rs. 15,000) and a part of plant was scrapped and disposed of for Rs. 2,875. The value of plant at site on 31 March, 2006 was Rs. 7,750 and the value of material at site was Rs. 4,250. Cash received on account to date was Rs. 1,75,000, representing 80% of the work certified. The cost of work uncertified was valued at Rs. 27,375.
The contractor estimated further expenditure that would be incurred in completion of the contract:
Prepare Contract account and calculate estimated total profit on this contract. Profit transferrable to Profit and Loss account is to be calculated by reducing estimated Profit in proportion of work certified and contract price.
|(b)|| Company produces two joint products P and Q in 70 : 30 ratio from basic raw materials in department A. The input output ratio of department A is 100 : 85. Product P can be sold at the split of stage or can be processed further at department B and sold as product AR. The input output ratio is 100 : 90 of department B. The department B is created to process product A only and to make it product AR. |
The selling prices per kg. are as under:
Product P Rs. 85
Product Q Rs. 290
Product AR Rs. 115
The production will be taken up in the next month.
Raw materials 8,00,000 Kgs.
Purchase price Rs. 80 per Kg.
|4.||Answer any three of the following:||3x3x=9|
|(i)||Discuss the treatment of spoilage and defectives.||(0)|
|(ii)||What items are generally included in good uniform costing manual?||(0)|
|(iii)||“Operation costing is defined as refinement of Process costing.” Explain it.||(0)|
|(iv)||Enumerate the factors which cause difference in profits as shown in Financial Accounts and Cost Accounts.||(0)|
|5.||Answer any five of the following:||5x2=10|
|(i)||Define Modified Internal Rate of Return method.||(0)|
|(ii)||Explain the need of debt-service coverage ratio.||(0)|
|(iii)||Explain the term ‘Ploughing back of Profits’.||(0)|
|(iv)||ABC Limited has an average cost of debt at 10 per cent and tax rate is 40 per cent. The Financial leverage ratio for the company is 0.60. Calculate Return on Equity (ROE) if its Return on Investment (ROI) is 20 per cent.||(0)|
|(v)||Explain in brief the assumptions of Modigliani–Miller theory.||(0)|
|(vi)||A person is required to pay four equal annual payments of Rs. 4,000 each in his Deposit account that pays 10 per cent interest per year. Find out the future value of annuity at the end of 4 years.||(0)|
|6.|| The Balance Sheet of JK Limited as on 31st March, 2005 and 31st March, 2006 are given below: |
Prepare a Cash Flow Statement.
|7.||(b)|| The turnover of PQR Ltd. is Rs. 120 lakhs of which 75 per cent is on credit. The variable cost ratio is 80 per cent. The credit terms are 2/10, net 30. On the current level of sales, the bad debts are 1 per cent. The company spends Rs. 1,20,000 per annum on administering its credit sales. The cost includes salaries of staff who handle credit checking, collection etc. These are avoidable costs. The past experience indicates that 60 per cent of the customers avail of the cash discount, the remaining customers pay on an average 60 days after the date of sale. |
The Book debts (receivable) of the company are presently being financed in the ratio of 1 : 1 by a mix of bank borrowings and owned funds which cost per annum 15 per cent and 14 per cent respectively.
A factoring firm has offered to buy the firm’s receivables. The main elements of such deal structured by the factor are:
What advise would you give to PQR Ltd. – whether to continue with the in house management of receivables or accept the factoring firm’s offer?
|8.||Answer any three of the following:||3x3=9|
|(i)||Differentiate between Business risk and Financial risk.||(0)|
|(ii)||Diagrammatically present the DU PONT CHART to calculate return on equity.||(0)|
|(iii)||What are the main responsibilities of a Chief Financial Officer of an organisation?||(0)|
|(iv)||Explain in brief the features of Commercial Paper.||(0)|