| Roll No………………… | |
| Total No. of Questions— 9] | [Total No. of Printed Pages—7 |
| Time Allowed : 3 Hours | Maximum Marks : 100 |
| BRF | |
| 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. | |
| Question Nos.1 and 6 are compulsory. | |
| Attempt three questions out of the remaining question numbers 2, 3, 4 and 5 and attempt two questions from the remaining question numbers 7, 8 and 9. | |
| Working notes should form part of the answer. | |
| Marks | |
| 1. | (a) | Enumerate the main objectives of introduction of a Cost Accounting System in a manufacturing organisation | 3 | ||
| (b) | Define Cost Audit and state its purposes | 3 | |||
| (c) | A company manufactures 5000 units of a product per month. The cost of placing an order is Rs. 100. The purchase price of the raw material is Rs. 10 per kg. The re-order period is 4 to 8 weeks. The consumption of raw materials varies from 100 kg to 450 kg per week, the average consumption being 275 kg. The carrying cost of inventory is 20% per annum. | 6 | |||
You are required to calculate:
| 3 | ||||
| BRF | P.T.O. |
( 2 )
| BRF | Marks |
| (d) | A construction company undertook a contract at an estimated price of Rs. 108 lacs, which includes a budgeted profit of Rs. 18 lacs. The relevant data for the year ended 31.3.2002 are as under: | 6 | ||||||||
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A special plant was purchased specifically for this contract at Rs. 8,00,000 and after use on this contract till the end of 31.2.2002, it was valued at Rs. 5,00,000. The cost of materials at site at the end of the year was estimated at Rs. 18,00,000. Direct wages accrued as on 31.3.2002 was Rs. 1,10,000 |
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| Required: | ||||||||||
Prepare the Contract Account for the year ended 31st March, 2002 and compute the profit to be taken to the Profit and Loss Account. |
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| 2. | (a) | Distinguish between Cost reduction and Cost Control. | 3 | |||||||
| (b) | Explain briefly the procedure for valuation of Work-in-process | 2 | ||||||||
| (c) | A product passes through two processes. The output of Process I becomes the input of Process II and the output of Process II is transferred to warehouse. The quantity of raw materials introduced into Process I is 20,000 kg at Rs. 10 per kg. The cost and output data for the month under review are as under:
| 9 | ||||||||
| BRF | Contind... |
( 3 )
| BRF | Marks |
| The company's policy is to fix the Selling price of the end product in such a way as to yield a profit of 20% on Selling price | 16 | ||||||||||||||||||||||||||||||||||||||||||||||
| Required: | |||||||||||||||||||||||||||||||||||||||||||||||
| (i) Prepare the Process Accounts | |||||||||||||||||||||||||||||||||||||||||||||||
| (ii) Determine the selling price per unit of the end product. | |||||||||||||||||||||||||||||||||||||||||||||||
| 3. | (a) | State the essential pre-requisites for installation of uniform costing system in an industry. | 5 | ||||||||||||||||||||||||||||||||||||||||||||
| (b) | A company is undecided as to what kind of wage scheme should be introduced. The following particulars have been compiled in respect of three system, which are under consideration of the management:
| 9 | |||||||||||||||||||||||||||||||||||||||||||||
| For the purpose of piece rate, each minute is valued at Rs. 0.10 | |||||||||||||||||||||||||||||||||||||||||||||||
| You are required to calculate the wages of each worker under : | |||||||||||||||||||||||||||||||||||||||||||||||
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| 4. | (a) | Explain, what do you mean by Chargeable Expenses and state its treatment in Cost Accounts | 3 | ||||||||||||||||||||||||||||||||||||||||||||
| (b) | What do you understand by the term Cost Centre? | 2 | |||||||||||||||||||||||||||||||||||||||||||||
| BRF | P.T.O. |
( 4 )
| BRF | Marks |
A company manufacturing two products furnishes the following data for a year:
The annual overheads are as under:
You are required to calculate the cost per unit of each Product A and B based on:
| 9 | ||||||||||||||||||||||||||||
| 5. | (a) | Why it is necessary to reconcile the Profits between Cost Accounts and Financial Accounts? | 5 | ||||||||||||||||||||||||||
| (b) | In the current quarter, a company has undertaken two jobs. The data relating to these jobs are as under:
| 9 | |||||||||||||||||||||||||||
It is the policy of the company charge Factory overheads as percentage on direct wages and Selling and Administration overheads as percentage on Factory Cost. | |||||||||||||||||||||||||||||
The company has received a new order for manufacturing of a similar job. The estimate of direct materials and direct wages relating to the new order are Rs.64,000 and Rs. 50,000 respectively. A profit of 20% on sales is required. | |||||||||||||||||||||||||||||
| BRF | Contind... |
( 5 )
| BRF | Marks |
You are required to compute:
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| 6. | (a) | Explain two basic functions of Financial Management | 4 | |||||||||
| (b) | The data relating to two Companies are given below:
You are required to calculate the Operating leverage, Financial leverage and Combined leverage of two Companies. | 4 | ||||||||||
| (c) | A Company has prepared the following projections for a year. | 4 | ||||||||||
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The Company proposes to increase the credit period allowed to its customers from one month to two months. It is envisaged that the change in the policy as above will increase the sales by 8%. The company desires a return of 25% on its investment. | ||||||||||||
You are required to examine and advise whether the proposed Credit Policy should be implemented or not. | ||||||||||||
| (d) | A company proposes to install a machine involving a Capital Cost of Rs. 3,60,000. The life of the machine is 5 years and its salvage value at the end of the life is nil. The machine will produce the net operating income after depreciation of Rs. 68,000 per annum. The Company's tax rate is 45% | 4 | ||||||||||
| BRF | P.T.O. |
( 6 )
| BRF | Marks |
The Net Present Value factors for 5 years as under:
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| You are required to calculate the internal rate of return of the proposal. | ||||||||||||||||
| 7. | (a) | Enumerate the activities which are covered by Treasury Management. | 3 | |||||||||||||
| (b) | Write a note on Venture Capital Financing. | 3 | ||||||||||||||
| (c) | From the following information, prepare a summarised Balance Sheet as at 31st March, 2002:
| 6 | ||||||||||||||
| 8. | (a) | State three assumptions of Modigliani and Miller approach to Cost of Capital. | 3 | |||||||||||||
| (b) | Distinguish between Cash Flow and Fund Flow statement. | 3 | ||||||||||||||
| (c) | A company has to make a choice between two projects namely A and B. The initial capital outlay of two Projects are Rs. 1,35,000 and Rs. 2,40,000 respectively for A and B. There will be no scrap value at the end of the life of both the projects. The opportunity Cost of Capital of the company is 16%. The annual incomes are as under:
| 3 | ||||||||||||||
| BRF | Contind... |
( 7 )
| BRF | Marks |
You are required to calculate for each project:
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| 9. | (a) | A company earns a profit of Rs. 3,00,000 per annum after meeting its Interest liability of Rs. 1,20,000 on 12% debentures. The tax rate is 50%. The number of Equity Shares of Rs. 10 each are 80,000 and the retained earnings amount to Rs. 12,00,000. The company proposes to take up an expansion scheme for which a sum of Rs. 4,00,000 is required. It is anticipated that after expansion, the company will be able to achieve the same return on investment as at present. The funds required for expansion can be raised either through debt at the rate of 12% or by issuing Equity Shares at par. | |||||||||||||||||||||||
Required:
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| (b) | The following information has been extracted from the records of a Company:
| 6 | |||||||||||||||||||||||
| BRF |