Total Marks: 50 Master Test Series – 03 29/10/2024
Total Time: 90 Min.
Cost and Management Accounting
General Instructions
(1) The question paper is divided into two parts. Part A and Part B.
(2) Part A consists of MCQ and Case study MCQ of 15 marks.
(3) Part B consists of Subjective and numerical questions of 35 marks.
(4) All the questions are compulsory in nature.
(5) Attempt all the questions.
(6) Part A has 4 Questions (MCQ + Case Study MCQ) and Part B has 4 Questions. (Subjective)
Part - A
TOTAL MARKS 15 (CASE STUDY MCQ + MCQ) TOTAL 4 QUESTIONS
CASE STUDY MCQ (xi) AMC cost of CCTV installed at weighing
1. M Ltd. is producing a single product and may bridge (used for weighing of final goods at
expand into product diversification in next one to the time of dispatch) and factory premises is
two years. M Ltd. is amongst a labour-intensive ₹ 8,000 and ₹ 18,000 per month respectively.
company where majority of processes are done (xii) TA/ DA and hotel bill paid for sales manager-
manually. Employee cost is a major cost element ₹ 36,000
in the total cost of the company. The company (xiii)The company has 1,800 employees works for
conventionally uses performance parameters 26 days in a month.
Earnings per manshift (EMS) to measure cost paid (5 × 2 Marks = 10 Marks)
to an employee for a shift of 8 hours, and Output You are asked to calculate the followings:
per manshift (OMS) to measure an employee’s (A) What is the amount of prime cost incurred
output in a shift of 8 hours. The Chief Manager during the last month:
(Finance) of the company has emailed you few (1) ₹ 7,54,20,000
information related to the last month. The email (2) ₹ 7,57,10,000
contains the following data related to the last (3) ₹ 7,56,06,000
month: During the last month, the company has (4) ₹ 7,87,10,000
produced 2,34,000 tonnes of output. Expenditures
for the last months are: (B) What is the total and per shift cost of
(i) Raw materials consumed ₹ 50,00,000 production for last month:
(ii) Power consumed 13,000 Kwh @ ₹ 8 per Kwh (1) ₹ 7,87,10,000 and ₹ 336.37 respectively
to run the machines for production. (2) ₹ 7,87,10,000 and ₹ 1,681.84 respectively
(iii) Diesels consumed 2,000 litres @ ₹ 93 per (3) ₹ 7,87,28,000 and ₹ 1,682.22 respectively
litre to run power generator used as (4) ₹ 7,87,28,000 and ₹ 336.44 respectively
alternative or backup for power cuts.
(iv) Wages & salary paid – ₹ 6,40,00,000 (C) What is the value of administrative cost
(v) Gratuity & leave encashment paid – ₹ incurred during the last month:
64,20,000 (1) ₹ 92,400
(vi) Hiring charges paid for HEMM- ₹ 30,00,000. (2) ₹ 88,000
HEMM are directly used in production. (3) ₹ 1,48,400
(vii) Hiring charges paid for cars used for official (4) ₹ 1,44,000
purpose – ₹ 66,000
(viii)Reimbursement of diesel cost for the cars – ₹ (D) What is the value of selling and distribution
22,000 cost and total cost of sales:
(ix) The hiring of cars attracts GST under RCM (1) ₹ 36,000 & ₹ 7,88,76,400 respectively
@5% without credit. (2) ₹ 56,000 & ₹ 7,88,76,400 respectively
(x) Maintenance cost paid for weighing bridge (3) ₹ 36,000 & ₹ 7,88,72,000 respectively
(used for weighing of final goods at the time (4) ₹ 56,000 & ₹ 7,88,72,000 respectively
of dispatch) – ₹ 12,000
(E) What is the value EMS and OMS for the last 4. Find out the most appropriate unit cost from the
month: following information of ZMD Transport Services
(1) ₹ 1,504.70 & 5 tonnes respectively Ltd. dealing in goods carriage:
(2) ₹ 1,367.52 & 5 tonnes respectively Total cost = ₹ 5,25,000
(3) ₹ 1,504.70 & 4.37 tonnes respectively Kms. Travelled = 8,75,000
(4) ₹ 1,367.52 & 4.37 tonnes respectively Tonnes carries = 4,000
No. of Drivers = 25
General MCQs (5 Marks) No. of trucks = 20,
2. Determine Profit when sales = 2,00,000 Tonnes Km carried = 6,55,000 (2 Marks)
BEP = 1,60,000 and Fixed cost = 40,000 (1) 0.8
(1 Mark) (2) 0.10
(1) 10,000 (3) 0.18
(2) 20,000 (4) 0.60
(3) 30,000
(4) 40,000
3. Calculate the employee hour rate of a worker S
from the following data:
Basic pay ₹ 10,000 p.m.
D.A. ₹ 3,000 p.m.
Fringe benefits ₹ 1,000 p.m.
Number of working days in a year 300. 20 days
are availed off as holidays on full pay in a year.
Assume a day of 8 hours. (2 Marks)
(1) 80
(2) 75
(3) 90
(4) 105
Part - B
1. What is difference between allocation of overheads and apportionment of overheads? (5 Marks)
2. (A) A group of ‘Health Care Services’ has decided to establish a Critical Care Unit in a metro city with an
investment of ₹ 85 lakhs in hospital equipments. The unit’s capacity shall be of 50 beds and 10 more beds, if
required, can be added.
Other information for a year are as under:
₹
Building Rent 2,25,000 per month
Manager Salary (Number of Manager - 03) 50,000 per month to each one
Nurses Salary (Number of Nurses - 24) 18,000 per month to each Nurse
Ward Boy's Salary (Number of Ward Boys - 24) 9,000 per month per person
Doctor's payment (Paid on the basis of number of patients attended 5,50,000 per month
and time spent by them)
Food and laundry services (variable) 39,53,000
Medicines to patients (variable) 22,75,000 per year
Administrative Overheads 28,00,000 per year
Depreciation on equipments 15% per annum on original cost
It was reported that for 200 days in a year 50 beds were occupied, for 105 days 30 beds were occupied and
for 60 days 20 beds were occupied.
The hospital hired 250 beds at a charge of ₹ 950 per bed to accommodate the flow of patients. However, this
never exceeded the normal capacity of 50 beds on any day. Find out:
(i) Profit per patient day, if hospital charges on an average ₹ 2,500 per day from each patient
(ii) Break-even point per patient day (Make calculation on annual basis) (5 Marks)
(B) SK engineering factory fabricates machine parts to customers. The factory commenced fabrication of 12 Nos.
machine parts to customer’s specifications and the expenditure incurred on the job for the week ending 21 st
August, is given below:
(₹) (₹)
Direct materials (all items) 78.00
Direct labour (manual) 20 hours @ ₹ 1.50 per hour 30.00
Machine facilities:
Machine No. 1: 4 hours @ ₹ 4.50 18.00
Machine No. II: 6 hours @ ₹ 6.50 39.00 57.00
Total 165.00
Overheads @ ₹ 0.80 per hour on 20 manual hours 16.00
Total cost 181.00
The overhead rate of ₹ 0.80 per hour is based on 3,000 man hours per week; similarly, the machine hour rates
are based on the normal working of Machine Nos. I and II for 40 hours out of 45 hours per week. After the
close of each week, the factory levies a supplementary rate for the recovery of full overhead expenses on the
basis of actual hours worked during the week. During the week ending 21st August, the total labour hours
worked was 2,400 and machine Nos. I and II had worked for 30 hours and 32½ hours respectively. Prepare a
cost sheet for the job for the fabrication of 12 Nos. machine parts duly levying the supplementary rates.
(5 Marks)
3. PQR Ltd. is engaged in the production of three products P, Q and R. The company calculates Activity Cost Rates
on the basis of Cost Driver capacity which is provided as below:
Activity Cost Driver Cost Driver Capacity Cost (₹)
Direct Labour Hours Labour Hours 30,000 Labour Hours 3,00,000
Production runs No. of Production runs 600 Production runs 1,80,000
Quality Inspections No. of Inspections 8000 Inspections 2,40,000
The consumption of activities during the period is as under:
Activity/Products P Q R
Direct Labour Hours 10,000 8,000 6,000
Production runs 200 180 160
Quality Inspections 3,000 2,500 1,500
You are required to:
(i) Compute the cost allocated to each Product from each Activity.
(ii) Calculate the cost of unused capacity for each activity
(iii) A potential customer has approached the company for supply of 12,000 units of net product 'S' to be delivered
in lots of 1,500 units per quarter. This will involve an initial design cost of ₹ 30,000 and per quarter production
will involve the following:
Direct Material ₹ 18,000
Direct Labour hours 1,500 hours
No. of Production runs 15
No. of Quality Inspection 250
Prepare cost sheet segregating direct and indirect cost and compute the sales value per quarter of product 'S' using
ABC system considering a markup of 20% on cost. (10 Marks)
4. Following are the figures extracted form the Cost Ledger of a manufacturing unit.
Stores ₹
Opening balance 15,000
Purchases 80,000
Transfer from WIP 40,000
Issue to WIP 40,000
Issue to repairs and maintenance 10,000
Sold as a special case at cost 5,000
Shortage in the year 3,000
Work-in-Process:
Opening inventory 30,000
Direct labour cost charged 30,000
Overhead cost charged 1,20,000
Closing balance 20,000
Finished Products:
Entire output is sold at 10% profit on actual cost from work-in-process.
Others:
Wages for the period 35,000
Overhead expenses 1,25,000
Ascertain the profit or loss as per financial accounts and cost accounts and reconcile them.
(10 Marks)
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