AJIT KUMAR SINGH: Foundation, Inter Group 1&2 And Final Group 1&2 Question Paper

Organisation and Management Fundamentals

December 2008

Syllabus 2008

Time Allowed : 3 Hours Full Marks : 100

SECTION I

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

Marks

1.Do you agree with the following statements? Write "Yes" or "No", giving proper reasoning in support of your answer. No marks will be awarded if only "Yes" or "No" is mentioned. (2x9)

(a) Organisations invade us and shape our destinies.

(b) Organisations are made of people, systems, procedures and objectives.

(d) Organisation is a structure.

(e) ‘Delegation of authority’ can also be termed as ‘delegation of responsibility’.

(f) Conflict has only dysfunctional aspect.

(g) The need for joint decision–making is the only source of inter–group conflict.

(h) Behavioural approach is multi–dimensional and interdisciplinary in nature.

(i) Recruitment Sources are always external.

2. Explain the contributions of Henry Fayol in the filed of management thought. (12)

3. Discuss the important external sources of recruitment. (12)

SECTION II

Answer Question No. 4 which is compulsory and any three from the rest.

4. (a)Match the statement under column I with appropriate statement under column II: (2x13)

Column I		Column II
(i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) (xi) (xii) (xiii)	Line Organisation Staff personnel Decentralisation Delegation Planning Attitudes Bottom line Top line Change Motivation Capitalism Navratans Grapevine	(A) (B) (C) (D) (E) (F) (G) (H) (I) (J) (K) (L) (M)	Line managers often resist ideas Technique of management Military or scalar organisation Psychological Phenomenon Net profit or net loss Reduction of burden on top management Intellectual Process Ownership of factors of production Informal Communication Sales Stick and carrot approach Resist Public Sector Undertakings

(b) Fill in the blanks. (1x6)

(i) Authority should be __________ with responsibility.

(ii) Setting goals and objectives is the first step in the __________

(iii) Authoritarianism refers to __________ of authority.

(iv) The ownership of any company vests in __________ .

(v) During suspension the employee receives a __________ .

(vi) __________ is called the father of Scientific Management.

(i) MIS

(ii) MBO

(iii) PERT

(iv) CPM

(v) KSFs

(vi) OJT

(d) Define, in just a sentence, the following: (1x5)

(i) Misconduct

(ii) Layoff

(iii) Scalar Chain

(iv) Equity

(v) Contingency Approach

5. Discuss the challenges before future Managers. (9)

6. What do you mean by conflict? Are there some positive aspects of conflicts? (9)

7. What is meant by change? Why employees resist change? (9)

8. Write short notes on any three of the following: (3x3)

(a) Development of Leadership Ability of Managers.

(b) Communication Process

(d) Single–use plans

(e) Psychological Incentives.

Organisation and Management Fundamentals

June 2009

Syllabus 2008

Time Allowed : 3 Hours Full Marks : 100

SECTION I

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

Marks

1.Do you agree with the following statements? Write "Yes" or "No", giving proper reasoning in support of your answer. No marks will be awarded if only "Yes" or "No" is mentioned.

(a) An organisation is created automatically.

(b) An informal organisation is a part of formal organisation.

(d) Recruitment seeks to eliminate as many applicants for jobs as possible.

(e) Decentralisation is nothing but an advanced form of delegation of authority.

(f) Perception is a process.

(g) Programmed decisions are not repetitive.

(h) Filtering the message is a powerful barrier to communication.

(i) Break–even analysis is called Cost–Volume Profit analysis.

2.(a) Explain any four principles of formal organisation. (4+4+4)

(b) What are the steps involved in the implementation of strategy for handling conflict?

3.(a) How to make committees effective? (4+4+4)

(b) State the concept of Free Form Organisation.

SECTION II

Answer Question No. 4 which is compulsory and any three from the rest

4.(a) Give the proper sequence among the following; (1x4)

(i)Organisational Behaviour, Human Relations, Scientific Management.

(ii) Social Needs, Self–actualisation Needs, Safety Needs, Physilogical needs. Esteem Needs.

(iii) Assignment of duties, Grouping the work, Division of work, Identifying the work.

(iv) Staff organisation, Line organisation.

(b) Fill in the blanks. 1x9

(i) Need hierarchy theory is a general theory is general theory of __________ developed my Maslow.

(ii) Termination, demotion, transfers etc, are examples of __________.

(iii) Training is job–centred process while __________ is a career–centred process.

(iv) PERT is a __________ technique.

(v) CPM is a __________ technique.

(vi) __________ conflict occurs when expectations of a role are materially different or opposite from the behaviour anticipated by the person in that role.

(vii) __________ conflict arises between a superior and his subordinates.

(viii) __________ actions are curative methods to overcome the problems of conflict. (ix)A person can be director in __________ private limited companies, government companies, companies formed not for profit etc.

(i) CSF

(ii) OPEC

(iii) ICSI

(iv) AD in ‘Registered AD’

(v) VRS

(vi) MOU

(vii) WTO

(viii) BALCO

(d) Define, in just one sentence, the following: (2x7)

(i) Layoff

(ii) Delegation

(iii) Unfreezing

(iv) Methods of training

(v) Theory X

(vi) Stick and Carrot Approach

(vii) Privatisation.

(e)Match the statement under column I with appropriate statement under column II:

Column I		Column II
(i)	Globalisation	(A)	Golden Handshake
(ii)	PSUs	(B)	Top Management
(iii)	Contingency Theory	(C)	Where we want to go
(iv)	Strategic Management	(D)	What business are we in
(v)	Mission	(E)	State owned enterprises
(vi)	Vision	(F)	Henry Fayol
(vii)	Voluntary Retirement Scheme	(G)	Theory of organisation
(viii)	Functions of Management	(H)	Think Globally, Act Locally

5. Define attitude. Discuss the popular techniques used to measure attitudes. (3+6)

6. Discuss Likert’s system of management. (9)

7. Distinguish between (5+4)

(a) Training and Development;

(b) PERT and CPM.

8. Write short notes on any three of the following: (3+3+3)

(a) Organisational Culture.

(b) Operational Planning.

(d) Disinvestment of Shares.

(e) Economic Objectives of Public Enterprises.

Organisation and Management Fundamentals

December 2009

Syllabus 2008

Time Allowed : 3 Hours Full Marks : 100

SECTION I

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

Marks

1.Do you agree with the following statements? Write "Yes" or "No", giving proper reasoning in support of your answer. No marks will be awarded if only "Yes" or "No" is mentioned.

(a) Organisation is considered as an activity.

(b) There is scalar chain in line organisation.

(d) Without division of labour, a job would be so inclusive that its performance would be impossible.

(e) ‘Personality’ refers to external appearance and behaviour only.

(f) ‘Attitude’ refers to a mental status of readiness to do or not to do any activity.

(g) The mission statement of an organisation refers to the target to be achieved during a period.

(h) Formally goals are set by the entrepreneurs always.

(i) Conflict refers to uncertainty in an organisation.

2.(a) What are the steps involved in organisation function? 4+4+4

(b) State the four pillars of classical theory of organisation.

3.(a) State the characteristics of authority. 4+4+4

(b) Differentiate Organisation Theory and Organisation Behaviour.

SECTION II

Answer Question No. 4 which is compulsory and any three from the rest

4. (a) Match the statement in Column I with appropriate statement under Column II. (1x12)

Column I Column II

(i) Departmentation (A) Bonus/Incentive

(ii) Informal group (B) Communication Process

(iii) Elton Mayo (C)Compliment to Organisation Structure

(iv) Intra–individual and inter–individual (D) Product wise Division

(v) Halsey’s Plan (E) Hawthorne Experiments

(vi) Piece Rate System (F) Conflicts

(vii) Coding and Decoding (G) C.P.M.

(viii) Public Sector Undertaking (H) Method of Wage Payment

(ix) Control Technique (I) Directors

(x) Board Meetings (J) Service Motive

(xi) Maslow (K) Two–factor Theory

(xii) Herzberg (L) Hierarchy Theory

(b) Fill in the blanks. 1x9

(i) _________involves shifting of an employee from one job to another without changing the responsibility of the employee.

(ii) Temporary removal of an employee from the payroll of an organisation by an employer due to uncontrollable reasons is known as _________.

(iii) Golden handshake refers to _________ retirement.

(iv) _________ is a systematic attempt to probe the future by inference from known facts.

(v) _________ decisions are those that are repetitive and routine.

(vi) MIS is the system of organising the _________ flow network within the organisation.

(vii) Theory Y assumes that people are self motivated and was advocated by _________.

(viii) _________ Power is based on the personality attributes or personal virtues of a person.

(ix) Profit making public sector enterprises are referred to as _________.

(i) MBO,

(ii) SOBC Model,

(iii) MIS,

(iv) MOU,

(v) BIRF,

(vi) GST,

(vii) CPM,

(viii) GAIL.

(d) Give the proper sequence among the following: 1x4

(i) Scrutiny of Applications, Medical examination, Interview, Checking references.

(ii) Establishment of Objectives, Problem Identification, Evaluating Alternatives, Developing Premises.

(iii) Social needs, Safety needs, Physiological needs, Esteem needs, Self–actualisation needs.

(iv) Selection, Placement, Manpower Planning, Training and Development.

(e) Define, in just one sentence, the following: 2x5

(i) Delegaton of Authority;

(ii) Lock out;

(iii) Span of Control;

(iv) Privatisation;

(v) Statutory Meeting.

5. Explain the fundamental principles of Scientific Management, as propounded by P.W, Taylor.

6. (a) State the different types of leadership styles. 4+5

(b) Distinguish between formal and informal organisations

7. (a) Describe the process of delegation. 4+5

(b) What are the challenges before the future managers?

8. Write short notes on any three of the following: 3+3+3

(a) Unity of Command;

(b) Advantages of training;

(d) Disinvestment Policy;

(e) Kinds of Public Sector Undertakings.

Organisation and Management Fundamentals

June 2010

Syllabus 2008

Time Allowed : 3 Hours Full Marks : 100

SECTION I

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

Marks

1.Do you agree with the following statements? Write "Yes" or "No", giving proper reasoning in support of your answer. No marks will be awarded if only "Yes" or "No" is mentioned.

(a) Organisation is not a function, but a process.

(b) Under functional organization structure, the authority flows from top to bottom.

(d) Division of labour increases the efficiency of the labourer.

(e) Perception means an individual’s view of reality.

(f) The organization in general is a social system composed of several interacting parts.

(g) The ‘mission’ of an organization refers to the scope of the operation in terms of products or services or clients.

(h) The organizational performance is judged in terms of goals.

(i) Centralisation is nothing but an advanced form of delegation of authority.

2.(a) What do you mean by the term "delegation of authority"? What are the basic steps in delegation? 2+4

(b) Define line and staff organization. Explain the reasons for conflict between line and staff. 2+4

3.(a) What are the main factors influencing attitudes? 4+4+4

(b) State the functions of organizational goal.

SECTION II

Answer Question No. 4 which is compulsory and any three from the rest

4. (a) Match the statement in Column I with appropriate statement under Column II. 1x12

Column I Column II

(i) Industrial Relations (A) Subsidised canteen

(ii) Discipline (B) Estimates of future conditions

(iii) Training (C) Determines personnel needs

(iv) Non–financial Incentives (D) Sensitivity Training

(v) Development (E) Familiarisation with organization

(vi) Forecasts (F) Emotions

(vii) Information (G) V’ room’s Expectancy Theory

(viii) Manpower Planning (H) Creates obedience

(ix) Induction (I)Basic requirements for decision making

(x) Barriers to communication (J) Growth of the individual

(xi) Motivation (K) Continuous process

(xii) T–Group (L) Industrial peace and democracy

(b) Fill in the blanks. 1x9

(i) As per Theory Y, work is ________.

(ii) In the area of Inventory control ________ is an example of critical point control.

(iii) Break Even Analysis is adopted as a tool of ________.

(iv) Planning is looking ahead whereas control is ________.

(v) Authority can be delegated but not ________.

(vi) Centralization implies the ________ at the top level of the organization.

(vii) Leadership is the ________ which binds a group together. (viii) ________ leadership style permits quick decision making.

(ix) Informal communication system is known as ________.

(i) GD

(ii) MBE

(iii) OD

(iv) PESB

(v) NRF

(vi) DC

(vii) WTO

(d) Do you agree with the following statements? Write ‘Yes’ or ‘No’ giving proper reasoning in support of your answer. No marks will be awarded if only ‘Yes’ or ‘No’ is mentioned. 1x4

(i) There is no difference between ‘Top Management’ and ‘Operative Management’.

(ii) There is a problem of autonomy of management in Public sector units.

(iii) Planning is a wasteful exercise in times of uncertainty.

(iv) Only direct workers should be included in incentive plans.

(e) Define the following, in just one sentence. 2x5

(i) Human Resource Management

(ii) Job Analysis

(iii) Vestibule Training

(iv) MBO

(v) Group Dynamics

5. "Public sector enterprises should generate adequate surplus to assist economic development". Do you agree? 9

6. Explain the sequential set of steps in the process of Decision making. 9

7.(a) What do you understand by inter–group conflicts? How they can be avoided? 2+2

(b) What are the barriers to effective communication? How to remove these barriers?2+3

8. Write short notes on any three of the following: 3x3

(a) Fundamental Principles of Taylor’s scientific management.

(b) Steps in planning.

(d) Statutory duties of Board of Directors.

(e) Importance of Public Enterprises.

Organisation and Management Fundamentals

December 2010

Syllabus 2008

Time Allowed : 3 Hours Full Marks : 100

SECTION I

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

Marks

1.Do you agree with the following statements? Write "Yes" or "No", giving proper reasoning in support of your answer. No marks will be awarded if only "Yes" or "No" is mentioned.

(i) Responsibility cannot be delegated.

(ii) Delegation of authority increases the workload of the top management.

(iii) Organisation, being a closed system, continuously interacts with its environment,

(iv) Organisational behaviour focuses primarily on technology.

(v) Mission is defined as the ends which the organisation seeks to achieve by its existence and operations.

(vi) The goals of an organisation provide legitimacy to its existence.

(b) Match the following: 1x12=12

(i) Matrix Organisation (A) Offers expert advice

(ii) Critical Success Factors (B) Broadband

(iii) Classical Theory of Organisation (C) is the backbone of the management

(iv) Confict (D) interacts with its environment

(v) Ability (E) Focuses primarily on people

(vi) Delegation of Authority (F) ensures organisational success

(vii) Bargaining (G) leads to certain positive outcomes

(viii) An open system (H)Work on the basis of a minimum common programmes.

(ix) Line & Staff organisation (I) Process of arriving at an agreement

(x) A coalition (J)is not a homogeneous and compact group

(xi) Organisational Behaviour K)Means the skills & capabilities of a person

(xii) A formal organization (L)Takes a static & rigid view of organisations.

2.(a) What factors should be kept in view while selecting a suitable basis of departmentation. 4

(b) Distinguish between Organisation Theory and Organisational Behaviour. 4

3.(a) What do you understand by ‘Positive Reinforcement’ and ‘Negative Reinforcement’ in an organisation? 3+3=6

(b) Explain in brief the three levels of conficts in any organisation. 6

SECTION II

Answer Question No. 4 which is compulsory and any three from the rest

4.(a) Match the statement in column I with appropriate statement under column II. 1x12

Column I Column II

(i) Promotion (A) Theory ‘X’ and Theory ‘Y’

(ii) Non-Monetary Incentives (B) Job rotation

(iii) Payment by result (C) Conservative style

(iv) Douglas McGregor (D) Complete delegation of authority

(v) Self actualisation needs (E) Process of Planned Change

(vi) Elements of communication (F) Internal source of recruitment

(vii) On–the–job Training (G) BIFR

(viii) Conflict Resolution (H) Halsey and Rowan

(ix) Cautions Disposition (I) Abraham Maslow

(x) Laissez–fair Leadership (J) Compromise

(xi) Industrial Sickness (K) Welt are measures

(xii) Unfreezing (L) Message and Medium

(b) Write the full form of the following abbreviations: 1x7=7

(i) PERT

(ii) M.B.O

(iii) BIFR

(iv) BODs

(v) PSEs

(vi) OJT

(vii) GA1L

(i) As per section 262 of the Indian Companies Act, the BODs may appoint a director when there is a _____________ amongst the directors.

(ii) To resolve conflicts _____________ can be arrived at either by bargaining or by arbitration.

(iii) Managers who are highly pragmatic and result–oriented are said to exhibit _____________ style,

(iv) _________ conflict involves two or more individuals with different goals or roles.

(v) _____________ makes diverse elements and subsystems of an organisation to work harmoniously towards the realization of common objectives.

(vi) _____________ power is derived from the formal position of a person in the organisation.

(vii) _____________ is the end result of delegation.

(viii) __________________ retirement is also referred to as Golden Handshake.

(ix) Organisational plans for handling non-repetitive, novel and unique problems are known us _____________ plans.

(x) The term management may be understood as a noun and also as a ____________.

(d) Do you agree with the following statements? Write "Yes" or "No", giving proper reasoning in support of your answer. No marks will be awarded if only "Yes" or "No" is mentioned. 1x4=4

(i) Education and training serve the same purpose

(ii) Planning and Forecasting have the same objectives.

(iii) Automation increases monotony and reduces employment opportunities.

(iv) Disinvestment in public sector is nothing but privatisation.

(e) Define the following in one or two sentence. 2x5=10

(i) Layoff

(ii) Budgeting

(iii) Communication

(iv) Authority

(v) Loyalty

5. Explain in brief any nine Principles of Management as propounded by Henry Fayol. 9

6. Explain in brief any three techniques of planning function. 3x3=9 (0)

7. (a) State the importance of delegation. How is it different from decentralisation' 3+2=5

(b) Why people join groups? State the features of a group. 2+2=4

8. Write short notes on any three: 3x3=9

(a) Problems of Public Sector Enterprises.

(b) Statutory Duties of Directors.

(d) Any three reasons for resistance to change among employees.

Accounting

December 2008

Syllabus 2008

Time Allowed : 3 Hours Full Marks : 100

SECTION I

Answer Question No. 1 which is compulsory and any two questions from Section I.

Marks

(a)

In each of the following one of them is correct. Indicate the correct answer.

1x9

(i)

Net assets represent excess of

(a)	Total assets over total liabilities
(b)	Paid–up capital over liabilities
(c)	Expenditure over income
(d)	Assets over Issued Capital

(0)

(ii)

An entry of Rs. 5,400 has been debited to X’s account at Rs. 4,500. It is an error of

(a)	Principle
(b)	Omission
(c)	Commission
(d)	Wrong posting

(0)

(iii)

Prepaid expenses are shown as

(a)	Miscellaneous expenditure
(b)	Loans and advances
(c)	Investments
(d)	Capital Expenditure

(0)

(iv)

Noting charges are paid by

(a)	The acceptor
(b)	The payee
(c)	The drawer
(d)	The endorsee

(0)

(v)

Overdraft as per cash book means

(a)	Credit balance in the pass book
(b)	Credit balance in the bank column of the cash book
(c)	Debit balance in the pass book
(d)	Debit balance in the cash book

(0)

(vi)

Amount set apart to meet losses due to bad debt is a

(a)	Provision
(b)	Reserve
(c)	Appropriation
(d)	Depreciation.

(0)

(vii)

The recognition that every transaction has two sides to it, is the leading principle of

(a)	Accrual Concept
(b)	Realisation Concept
(c)	Dual Aspect Concept
(d)	Matching Concept.

(0)

(viii)

Statement of Affairs is a

(a)	Statement of Income and Expenditure
(b)	Statement of Assets and Liabilities
(c)	Not a Financial Statement
(d)	Statement of Loans and Advances.

(0)

(ix)

Retiring of bill under Rebate

(a)	Is settled before due date at a discount
(b)	Is settled after maturity
(c)	Is to get the period of bill extended
(d)	Is a fresh bill after deduction of rebate.

(0)

(b)

Fill in the blanks:

1x5

(i)

Credit balance of the Pass Books indicates_________balance.

(0)

(ii)

The withdrawal of money by the owner of business is called_________.

(0)

(iii)

Effects of an event must be recognized in the same accounting period as per_________concept.

(0)

(iv)

Contingent Liability is a _________ item to the Balance Sheet.

(0)

(v)

Expenses paid but not accrured means_________expenses.

(0)

(c)

State with reasons whether the following statements are true or false:

2x8

(i)

Debit balance of the Pass Books indicates an overdraft.

(0)

(ii)

Suspense Account always shows debit balance.

(0)

(iii)

An agent to whom goods are sent for sale on a commission basis in called a consignee.

(0)

(iv)

The trade discount is never entered in the books of accounts.

(0)

(v)

The business of partnership firm must be carried on by all the partners.

(0)

(vi)

Salary paid to Ram will be debited to Ram’s personal account.

(0)

(vii)

Sales day book is the summary of both cash and credit sales of the concern.

(0)

(viii)

A bill of exchange is a conditional order in writing given by a Debtor to a Creditor.

(0)

(a)

From the following particulars, prepare Bank Reconciliation Statement as on 30.11.08:

	Rs.
(i) Balance as per pass book (overdraft) (ii) Cheque of Ajay Ltd. deposited but not presented (iii) Cheque issued to Bijay Ltd. but not presented (iv) Bank charges and commission not entered in cash book (v) Amount directly credited by the bank against transfer of fund (vi) Dividend credited by bank but not entered in cash book	5,000 7,160 290 120 500 1,000

(0)

(b)

Define Contingent Liabilities

(0)

(a)

Mr. A draws on Mr. B a bill of exchange for Rs. 5,000 on 1st January, 2008. Mr. A endorses the bill in favour of Mr. C. Before maturity, Mr. B approaches Mr. A with the request that the bill be renewed for a further period of 3 months at fifteen per cent interest per annum. Mr. A pays the sum to Mr. C on due date and agrees to the proposal of Mr. B. Pass the journal entries in the books of Mr. A assuming that the second bill is duly met.

(0)

(b)

Define Accommodation Bill.

(0)

(a)

One Lathe machine whose original value was Rs. 1,20,000 on 1.4.2006, being the date of installation, was sold on 30.9.2008 for Rs. 1,00,000. Depreciation is charged @ 10% on reducing balance. Show Machinery account and Assets disposal account.

(0)

(b)

Explain Fundamental Accounting Assumption.

(0)

SECTION II

Answer Question No. 5 which is compulsory and
any two questions from Section II.

(a)

In each of the following one of them is correct. Indicate the correct answer.

1x12

(i)

Prime cost may be correctly termed as

(a)	The sum of direct material and labour cost with all other costs excluded.
(b)	The total of all cost items which can be directly charged to product units
(c)	The total costs incurred in producing a finished unit
(d)	The sum of the large cost terms in a product cost.

(0)

(ii)

Which of the following does not usually appear on a GRN?

(a)	Date received
(b)	Quantity received
(c)	Price of goods
(d)	Description of goods.

(0)

(iii)

From the following data production overhead absorption rate, as a percentage of prime cost:
Direct material cost: Rs. 3,000
Direct labour cost: Rs. 5,000
Direct expenses: Rs. 2,000
Production overhead: Rs. 20,000

(a)	200%
(b)	50%
(c)	250%
(d)	40%

(0)

(iv)

Which of the following methods of remuneration is most likely to give stability of earnings to employee and stability of labour cost to employer:

(a)	Straight piecework
(b)	Premium bonus schemes
(c)	Measured day work
(d)	Group bonus scheme.

(0)

(v)

Vacation pay for factory workers should be charged to

(a)	Work–in–process inventory
(b)	Direct labour
(c)	Administrative expense
(d)	Factory overhead

(0)

(vi)

Apportionment of overhead cost may be defined as:

(a)	Charge to a cost centre of an overhead cost item with no estimation.
(b)	Charge each cost centre with a share of an overhead cost using an appropriate basis to estimate the benefit extracted by each cost centre.
(c)	Charge to cost units for the use of an overhead cost.
(d)	Classification of overhead cost as fixed or variable.

(0)

(vii)

Which of the following indicates a breakeven point?

(a)	Sales revenue – variable cost.
(b)	Profit = fixed cost + variable cost
(c)	Contribution = fixed cost
(d)	Contribution + fixed cost = profit.

(0)

(viii)

A factory operates on 300 days. It runs on 3 shifts of 7 hours each. Normally one hour everyday is spent on normal repair work. The number of hours for computation of machine hour rate will be:

(a)	6000 hours
(b)	6300 hours
(c)	2100 hours
(d)	6600 hours.

(0)

(ix)

Existing sales are Rs. 1,00,000 (500 units), variable costs are Rs. 60,000 & fixed costs are Rs. 24,000. If selling price is reduce by 10%, the break–even sales of the company will be

(a)	400 units
(b)	334 units
(c)	500 units
(d)	450 units.

(0)

(x)

Margin of Safety is:

(a)	Fixed cost—Variable Cost
(b)	Contribution—Fixed Cost
(c)	BEP Sales—Variable Cost
(d)	Sales—BEP Sales.

(0)

(xi)

In situation of increasing price, the valuation of closing stock is less under:

(a)	FIFO
(b)	LIFO
(c)	Simple average
(d)	Weighted average.

(0)

(xii)

An increase in fixed cost will result in

(a)	A decrease in P/V Ratio
(b)	Decrease in contribution per unit
(c)	Increase in break even level
(d)	Increase in profit.

(0)

(b)

State with reasons whether the following statements are true or false:

2x9

(i)

Under LIFO method, price of issues is close to current market price.

(0)

(ii)

Price rate system is useful when the quality of the product is extremely important.

(0)

(iii)

Variable cost per unit will not change.

(0)

(iv)

Cost centre is sometimes known as cost unit.

(0)

(v)

Abnormal costs are controllable.

(0)

(vi)

All overheads change with change in volume and in the same proportion.

(0)

(vii)

All packing materials are indirect, hence treated as factory overheads.

(0)

(viii)

Target cost is a product cost arrived at after deducting desired profit from the selling price prevailing in the market.

(0)

(ix)

Just in time means to complete all work just in time, without keeping anything pending for the next day.

(0)

(a)

ABC Ltd. furnished information in relation to the production of 2,000 units of product "X" for the year 2007.

		Rs.
(i) (ii) (iii) (iv) (v) (vi)	Direct materials Direct labour Indirect wages (50% fixed) Consumable Stores (70% variable) Office rent (100% fixed) Selling expenses (40% variable)	2,00,000 1,50,000 40,000 30,000 60,000 80,000

In the year 2008, it is estimated that the production will increase by 50%. The price of material and labour will up by 10% and 20% respectively.
Compute selling price per unit of product "X" for the year 2008, if the company wishes to maintain the profit @ 10% on cost.

(0)

(b)

Write note on "Idle Time".

(0)

(a)

A Contractor uses labour groups of two skilled and three unskilled workers to do small contract jobs. The contractor wishes to charge the work done by this group on an hourly basis. The information for the group is as follows:

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(0)

(a)

Calculate Economic order quantity from the following:

Annual Requirement
Price per kg.
Ordering Cost
Inventory Holding Cost

16000 kg.
Rs. 200
Rs. 50 per order
5% on average inventory

2+2+2+4

(0)

(b)

Re–ordering level
Re–ordering quantity
Minimum usage
Minimum lead time

200 units
300 units
20 units
5 weeks

What is the Minimum Stock?

(0)

(c)

The number of employees at the beginning and end of 2007 were 2500 & 3500 respectively. During the year 2007, 250 employees left and 350 persons joined the company. Calculate the labour turnover ratio under Flux Method.

(0)

(d)

You are required to find out the break even sales (BES) and profit, it the sales of a company are Rs. 50 lakhs and P/V ratio and margin of safety are 50% and 40% respectively.

(0)

Accounting

June 2009

Syllabus 2008

Time Allowed : 3 Hours Full Marks : 100

SECTION I

Answer Question No. 1 which is compulsory and any two from Section I.

Marks

(a)

In each of the following one of them is correct. Indicate the correct answer.

1x9=9

(i)

Till the discounted bill is paid by the acceptor, it remains

A.	A contingent liability
B.	A liability
C.	An expense
D.	An asset.

(0)

(ii)

Del Credere Commission is allowed to cover the risk of

A.	Theft
B.	Bad Debts
C.	Fire
D.	Damage of goods in transit.

(0)

(iii)

The amount of yearly depreciation under diminishing balance method

A.	Remains constant over the years
B.	Decreases year after year
C.	Increases year after year
D.	Fluctuates.

(0)

(iv)

The credit purchases of fixed assets are recorded in

A.	Purchase Book
B.	Cash Book
C.	Journal Proper
D.	Sales Return Book.

(0)

(v)

Expenses paid but not accrued means

A.	Cash expenses
B.	Prepaid expenses
C.	Outstanding expenses
D.	Capital expenses.

(0)

(vi)

When goods are purchased for the joint venture, the account to be debited is

A.	Purchases account
B.	Joint Venture account
C.	Venture’s Capital account
D.	Consignee’s account.

(0)

(vii)

The total of discount column on the debit side of the Cash Book, is posted to the

A.	Credit of the discount allowed account
B.	Debit of the discount received account
C.	Credit of the discount received account
D.	Debit of the discount allowed account.

(0)

(viii)

Goods purchased from Mr. Ajay for Rs. 10,000 passed through the Sales Book. The rectification of error will result in

A.	Increase in gross profit
B.	Decrease in gross profit
C.	No effect on gross profit
D.	Either A or B.

(0)

(ix)

Which of the following is not a negotiable instrument?

A.	Bearer Cheque
B.	Promissory Note
C.	Bill of Exchange
D.	Crossed Cheque.

(0)

(b)

Fill in the blanks:

1x5

(i)

The _________ balance in the bank column of the Cash Book indicates bank overdraft.

(0)

(ii)

Expenditure is called _________ expenditure, if the benefits from it extend to more than one year.

(0)

(iii)

The _________ discount is never entered in the books of accounts.

(0)

(iv)

The burden of noting charges is ultimately borne by the _________ of the bill.

(0)

(v)

Prepaid expenses appear on the _________ side of the Balance Sheet.

(0)

(c)

State with reasons whether the following statements are true or false:

2x8=16

(i)

Goodwill is a current asset.

(0)

(ii)

The error of principle is caused due to incorrect allocation of expenses.

(0)

(iii)

Accommodation bill is used without a trade transaction and is for mutual benefit.

(0)

(iv)

Cash received from Kishor will be debited to his account.

(0)

(v)

Balances on personal accounts are carried forward to the next year.

(0)

(vi)

Single Entry System does not recognize two effects of a transaction.

(0)

(vii)

Joint Venture is a permanent partnership.

(0)

(viii)

Wages paid for installation should be debited to wages account.

(0)

(a)

From the following particulars, prepare Bank Reconciliation Statement and arrive at the balance as per Cash Book as on 31st March, 2009.

(i)	Credit balance as per Pass Book: Rs. 9,700.
(ii)	Cheques issued on 27th March, 2009, but presented for payment on 3rd April, 2009: Rs. 19,000.
(iii)	Cheques deposited in the Bank on 29th March, 2009, but credited on 2nd April, 2009: Rs. 10,000.
(iv)	Bank debited Bank Charges, but not yet recorded in Cash Book Rs. 250.
(v)	Dividend on shares collected and credited by Bank, but not yet recorded in Cash Book: Rs. 2,000.

7+3=10

(0)

(b)

Write a note on ‘Objectives of Providing Depreciation’.

(0)

(a)

Pass Journal entries to rectify the following errors:

(i)	Machinery purchased for Rs. 5,000 was passed through Purchase Day Book.
(ii)	Rs. 2,000 spent for repairs was debited to Buildings A/c and depreciation @ 10% was also charged.
(iii)	Goods purchased from Rohan for Rs. 50,000 wrongly entered in Sales Book.
(iv)	An item of Rs. 6,000 in respect of Purchase Return, wrongly debited to Purchase Account.
(v)	Cost of cement, sand, stone chips, steel rods and wages amounting to Rs. 10,000 for extension of building was debited to Repairs & Maintenance Account.

5+3+2=10

(0)

(b)

On 1.4.09, Mr. A draws a bill for Rs. 6,000 for 7 months on Mr. B who returned the bill to Mr. A after acceptance. On 10.4.09, Mr. A endorsed the bill in the favour of Mr. C who endorsed the bill on 15.4.09 in favour of Mr. D on 1.5.09. Mr. D discounted the bill at 10%. On maturity, the bill was dishonoured and banker paid Rs. 50 towards noting charges.
Pass necessary Journal entries in the books of Mr. D.

(0)

(c)

Indicate the due date for payment of bill drawn on 14.3.09 for 30 days after sight on Mr. P who accepted on 17.3.09.

(0)

(a)

Ram and Shyam agreed for purchasing and selling furniture in a joint venture; their profit sharing ratio being 3 : 2 respectively. Ram purchased 10 sofas @ Rs. 10,000 per sofa. He sent these sofas to Shyam for sale after spending Rs. 1,000 per safa on insurance and transaction. He drew a bill of Rs. 50,000 on Shyam and this bill was discounted at a discount of Rs. 5,000 after acceptance. Shyam incurred further expenses of Rs. 2,000 on these sofas before sale. He sold all the sofas @ Rs. 15,000 per sofa, giving 5% commission to the dealer.
Prepare Joint Venture with Shyam Account in the books of Ram. Also show Memorandum Joint Venture Account.

8+2=10

(0)

(b)

Write a note on ‘Single Entry System’.

(0)

SECTION II

Answer Question No. 5 which is compulsory and any two questions from Section II

Marks

(a)

In each of the following one of them is correct. Indicate the correct answer.

1x14=14

(i)

A company wants to sell 1,00,000 units at Rs. 12 each. Fixed costs are Rs. 2,80,000. In order to earn a profit of Rs. 2,00,000, the variable cost should be

A.	Rs. 4,80,000
B.	Rs. 7,20,000
C.	Rs. 9,00,000
D.	Rs. 9,20,000

(0)

(ii)

Bad Debts are included as

A.	Direct expenses
B.	Cost of production
C.	Selling overhead
D.	Distribution overhead

(0)

(iii)

In behavioural analysis, costs are divided into

A.	Production and Non–production costs
B.	Controllable and Non–controllable costs
C.	Direct and Indirect costs
D.	Fixed and Variable costs

(0)

(iv)

Sharing of a percentage of value added is done under

A.	Emerson’s Differential Pay Plan
B.	Rucker Plan
C.	Taylor’s Plan
D.	Rowan Plan

(0)

(v)

Difference between time keeping and time booking is called

A.	Idle time
B.	Absent hours
C.	Time worked on jobs
D.	Time for which a worker is present at the place of work

(0)

(vi)

A costing method in which fixed overheads are included in the cost of inventory is

A.	Variable costing
B.	Direct costing
C.	Absorption costing
D.	Process costing

(0)

(vii)

In marginal costing, the following are considered in contribution computation.

A.	Selling price and variable cost
B.	PV ratio and fixed cost
C.	Profit and fixed cost
D.	BEP and margin of safety.

(0)

(viii)

Which cost system description applies to the manufacture of 20 engraved doors for the new clubhouse at a golf course?

A.	Contract
B.	Process
C.	Batch
D.	Service

(0)

(ix)

Lead time is the

A.	Maximum time to get the materials
B.	Time between ordering and replenishment
C.	Time taken for preparation of order
D.	None of the above.

(0)

(x)

The scope of inventory control is

A.	Related to maintaining the correct level of inventory at all times
B.	Related to fixation of stock levels for various items
C.	To check the stock figures readily
D.	To locate the slow and non–moving items

(0)

(xi)

When sales is Rs. 10,000 and PV ratio is 40%, variable cost is

A.	Rs. 4,000
B.	Rs. 5,000
C.	Rs. 6,000
D.	Rs. 3,000

(0)

(xii)

Objective of Cost Accounting is to

A.	Link the cost to the cost centre
B.	Link the cost to the organisation to ascertain total profit
C.	Link the cost to production department
D.	Link the cost to individual stakeholder

(0)

(xiii)

Overstacking of materials may result into

A.	Locking of working capital and storage space
B.	Unfavourable price and credit terms
C.	Payment for idle time to workers
D.	Production hold ups

(0)

(xiv)

A company produces and sells a single product and has followed details:
Selling price per unit : Rs. 40
Variable cost per unit : Rs. 20
Fixed expenses : Rs. 2,00,000
Hence, BEP sales of the company is

A.	Rs. 4,00,000
B.	Rs. 30,000
C.	Rs. 50,000
D.	Rs. 2,00,000

(0)

(b)

State with reasons whether the following statements are true or false:

2x6=12

(i)

Fixed overheads jump up, if production exceeds capacity.

(0)

(ii)

Primary packaging is an item of price cost.

(0)

(iii)

The Halsey Plan gurarantees minimum hourly rate.

(0)

(iv)

At break even point, there is no profit and no loss.

(0)

(v)

With change in production, variable cost per unit will remain fixed.

(0)

(vi)

Abnormal costs are not controllable.

(0)

(c)

Specify the methods of determination of cost and the units suitable for the following industries:

1x4=4

(i)

Crude Oil/Refinery;

(0)

(ii)

Hospital;

(0)

(iii)

Printing;

(0)

(iv)

House Building.

(0)

An advertising agency has received an enquiry for submission of quotation. Bill of materials prepaired by the production department for the job states the following requirement of materials:
Paper 10 reams @ Rs. 1,800 per ream
Ink and other printing material Rs. 5,000
Binding material and other consumables Rs. 3,000

Some photography is required for the job. The agency doesnot have a photographer as an employee. It decides to hire one by paying Rs. 10,000 to him. Estimated job card prepared by production department specifies that service of following employees will be required for this job:

(1) Artist (Rs. 12,000 per month) 80 hours; (2) Copywriter (Rs. 10,000 per month) 75 hours; (3) Clint servicing (Rs. 9,000 for month) 30 hours.

The primary packing material will be required to the time of Rs. 4,000. Production overheads 40% of direct cost while the selling and distribution overheads are likely to be 25% on production cost. The agency expects a profit of 20% on the quoted price. The agency works 25 days in a month and 6 hours a day.
You are required to determine the price to be quoted for the job.

(0)

(a)

A factory has a price rate system. Production fixed for a day is 50 units. Remuneration payable to workers is as follows

(i)	Wages Rs. 5 per piece, subject to a minimum of Rs. 200 per day
(ii)	Dearness Allowance — Rs. 60 per day
(iii)	Incentive Bonus — up to 80% efficiency – Nil Above 80% efficiency – Rs. 40 for every 1% increase in efficiency above 80%.
Calculate the earnings of Mr. Amal and Mr. Kamal whose performance for the month of April, 2009 is as under: Amal worked for 20 days — output 60 units Kamal worked for 24 days — output 1,080 units.

7+3=10

(0)

(b)

Mention 3 ways in which profit–volume ratio can be improved.

(0)

(a)

If the margin of safety is Rs. 2,40,000 which is 40% of sales and PV ratio is 30%, calculate the break even sales and profit at the sales value of Rs. 9,00,000.

5+3+2=10

(0)

(b)

From the following data, calculate stock holding period for sugar and milk. Which is fast moving item?

	Sugar Rs.	Milk Rs.
Opening Stock Purchases Closing Stock	20,000 1,60,000 10,000	10,000 2,00,000 10,000

Assume 1 year = 365 days.

(0)

(c)

Explain how will you treat the following items in Cost Accounts?
(i) Tools set up cost;
(ii) Carriage and freight.

Accounting

December 2009

Syllabus 2008

Time Allowed : 3 Hours Full Marks : 100

SECTION I

Answer Question No. 1 which is compulsory and any two questions from the rest of Section I.

Marks

(a)

In each of the following one of them is correct. Indicate the correct answer.

1x9

(i)

Till the discounted bill is paid by the acceptor it remains:

A.	A contingent liability for the Acceptor.
B.	A contingent liability for the Drawer.
C.	A contingent liability for the Bank.
D.	A liability for the Drawer.

(0)

(ii)

Net worth is:

A.	Total Assets Less Outside Liabilities.
B.	Total liabilities plus Owners’ equity.
C.	Current Assets less Current liabilities.
D.	Total Accumulated profit less Liabilities.

(0)

(iii)

When Cash is received for services rendered in the past:

A.	Owners’ equity increases.
B.	Current assets increase.
C.	Profit increases.
D.	None of the above.

(0)

(iv)

When an endorsed bill is dishonored, for the endorsee, it becomes the liability:

A.	Of the drawee.
B.	Of the drawer.
C.	Of the payee.
D.	Of the endorser.

(0)

(v)

Life membership fees received by a non–profit organization is treated as:

A.	Revenue receipt.
B.	Capital receipt.
C.	Deferred revenue receipt.
D.	Both revenue & Capital receipt.

(0)

(vi)

Increase in the value of opening stock results in which of the following:

A.	Increase in gross profit and net profit.
B.	Reduction in gross profit and increase in net profit.
C.	No effect on net profit.
D.	None of the above.

(0)

(vii)

_____ method of stock valuation considers the purchase price of stock which entered the godown last.

A.	FIFO
B.	LIFO.
C.	Weighted average.
D.	All the above method.

(0)

(viii)

The Trial Balance checks:

A.	Arithmetical Mistake.
B.	Honesty of the book keeper.
C.	Valuation of Closing Stock.
D.	Nature of the business.

(0)

(ix)

Expenses incurred in the formation of a company are shown in:

A.	Debit side of P & L A/c.
B.	As an asset in Balance Sheet.
C.	As a liability in Balance Sheet.
D.	Credit side of P & L A/c.

(0)

(b)

Fill in the blanks:

1x5

(i)

The withdrawal of money from the business by the owner for his personal use is called __________.

(0)

(ii)

Effects of an event must be recognized in the same accounting period in which they are entered as per __________ concept.

(0)

(iii)

If the current year’s depreciation has to be shown in the trial balance, is would be shown in the __________ side of the trial balance.

(0)

(iv)

The Depreciation mentioned under 1 (b) (iii) above is not __________ from the corresponding asset in the balance sheet.

(0)

(v)

On return of goods to the seller by the buyer, the seller issues __________ note to the buyer.

(0)

(c)

State with reasons whether the following statements are true or false:

2x8

(i)

If the profit sharing ratio among the co–ventures is not given, the profit of the joint venture is distributed among the co–ventures in capital ratio.

(0)

(ii)

Balances of personal accounts are carried forward to the next year.

(0)

(iii)

Salary paid to Harish will be debited to his personal account.

(0)

(iv)

A drawer himself may be the payee of a bills of exchange/cheque.

(0)

(v)

Accumulated depreciation can be located in the debit side of the trial balance.

(0)

(vi)

The accumulated in 1(c) (v) above is not deducted from the corresponding asset in the Balance Sheet.

(0)

(vii)

Income received in advance is an asset.

(0)

(viii)

Petty Cash is an expense.

(0)

Based on the following information prepare a Bank Reconciliation Statement as on 31st December, 2008 find the balance as per pass book:

(i)
(ii)
(iii)
(iv)
(v)
(vi)

Bank Overdraft as per cash book on 31.12.2008 Rs.6,340;
Interest on overdraft for 6 months ending 31.12.2008 Rs.160 is entered in pass book;
Bank charges amounted to Rs.30 for the above period were entered in the pass book;
Cheques issued but not presented upto 31.12.2008 amounted to Rs.1168;
Cheques sent for collection to the bank but not collected upto 31.12.2008 amounted to Rs.2,170;
Interest on investments collected by the bank and entered in the pass book Rs.1200.

6+1

(0)

(b)

Explain the following three statements in not more than 10 words each:

1x3

(i)

P & L A/c is a Period Statement.

(0)

(ii)

Balance Sheet is a Point of Time Statement.

(0)

(iii)

Statement of Affairs is a Point of Time Statement.

(0)

(a)

Shyam consigned 2,00,000 units @ Rs.5/- each to Mr. Ram, and paid Freight and Insurance amounting to Rs.1,00,000. Ram spent further the following amounts:

		Rs.
(i)	Insurance	5,000
(ii)	Godown Rent	4,000
(iii)	Clearing	6,000

2,000 units were damageed during transit due to heavy rains.
Ram sold 1,00,000 units @ Rs.10/- per unit.
Ram realized salvage value of damageed units Rs.2,000/-
Ram is to get a commission @ 5% on sales.
Determine the abnormal loss.

(0)

(b)

From the following information determine the cash and bank balance, as on 31.11.2009:

	Rs.
Written Down value of Land & Building Accumulated depreciation on Land & Building Insurance Premium paid in advance Creditors Debtors Furniture Capital Cash & Bank Balance	32,000 2,000 900 13,000 5,000 12,000 55,000 ?

(0)

(c)

From the following information determine amounts to be transferred to the Profit & Loss Account:

		Rs.
(i)	Sundry Debtors as on 31.03.2009	50,000
(ii)	Provision for debt as on 01.04.2008	4,000
(iii)	Bad debts written off during the year 2008–09	1,000
(iv)	Recovery of bad debts earlier written off	1,000
(v)	Provision for bad and doubtful debt is maintained @ 5%.

(0)

(d)

Discuss the effects of not providing depreciation. Only two points need be given.

(0)

(a)

Mohan sold goods on 1st September, 2009 for 2,00,000/- to Sohan. Sohan immediately accepted a 3 months bill. On the due date Sohan requested for the renewal of the bill for a further period of two months. Mohan agrees to pay interest @ 9% per annum to be included in the new bill. Determine the amount of the new bill.

(0)

(b)

Pass Journal entries in the current year for the rectification of following errors which were located after the final accounts of previous had been prepared. These errors relate to earlier year. Rate of depreciation on fixed assets is 10%.

(i)	Purchase of a second hand scooter was debited to the conveyance account amounting to Rs.5,000/-
(ii)	Cash received from Mr. Z was wrongly entered in the account of Y, amount being Rs.4,000/-.
(iii)	Goods purchased from A was recorded in the sales book amounting to Rs.15,000/-
(iv)	A cheque for Rs.500/- issued to the Supplier (Creditor) wrongly debited to purchases.

(0)

(c)

The Cost of the machinery in use with a firm as on 1st April, 2008 was Rs.2,50,000 against which depreciation provision stood at Rs.1,05,000 on that date, the firm provides depreciation at 10% p.a. on SLM basis. On 01.10.2008 two machines costing Rs.15,000 and 12,000 ach, both purchased on 1st Oct., 2005 had to be discarded and had to be replaced by two machines costing Rs.20,000 & 15,000 each on the same date. On of the discarded machine realized Rs.8,000/- and the other is expected to realized Rs.3,000/-. Prepare the following Accounts.

(i)	Machine A/c

(ii)	Machine Disposal A/c and

(iii)

Provision for Depreciation A/c

for the year ended 31st March, 2009.

1+2+2

(0)

SECTION II

Answer Question No. 5 which is compulsory and any two questions from Section II

Marks

(a)

In each of the following, one of the alternatives is Correct. Indicate the correct one.

1x10

(i)

Cost of Normal waste of material under contract costing is debited to:

A.	Contract A/c
B.	Trading A/c
C.	Material A/c
D.	P & L A/c

(0)

(ii)

Variable Costs are fixed:

A.	For a period
B.	Per unit
C.	Depends upon the entity
D.	For a particular process of production

(0)

(iii)

When re-ordering quantity is 300 units, minimum usages is 20 units, minimum lead time is 5 days, maximum stock 400 units, re-ordering level will be:

A.	300 units
B.	200 units
C.	400 units
D.	100 units

(0)

(iv)

When over-absorption of overheads is Rs.20,000 and the actual machine hour were 50,000. The overhead rate per machine hour is Rs.5/-. Actual overheads would be:

A.	Rs.5,00,000
B.	Rs.2,30,000
C.	Rs.2,50,000
D.	Rs.2,70,000

(0)

(v)

When Break–even sales is 12,000 units, selling price per unit Rs.10/-, Maximum sales is 20,000 units. The margin of safety is

A.	Rs.70,000
B.	Rs.80,000
C.	Rs.60,000
D.	Rs.50,000

(0)

(vi)

A company with fixed costs amounting to Rs.50,000 seeks to earn a profit @ 20% of selling price. The selling price is Rs.20/- per unit and the variable costs are Rs.15/- per unit. The units sold will be:

A.	50,000
B.	60,000
C.	25,000
D.	None of the above

(0)

(vii)

The concept of EOQ has been losing its shade since the introduction of:

A.	Perpetual Inventory System
B.	JIT Inventory System
C.	FIFO
D.	LIFO

(0)

(viii)

In an increasing price trend, value of closing stock of inventory would be higher under:

A.	FIFO
B.	LIFO
C.	Actual Cost
D.	Average Cost

(0)

(ix)

Costing method in which fixed overheads are included in the cost of inventory is

A.	Variable costing
B.	Direct Costing
C.	Absorption Costing
D.	Process Costing

(0)

(x)

If sales is Rs.2,70,000, variable costs are 60%, Fixed Costs are Rs.1,00,000. BEP would be:

A.	Rs.1,00,000
B.	Rs.2,00,000
C.	Rs.2,20,000
D.	Rs.2,50,000

(0)

(b)

(i)

Determine the machine hour rate from the following information:

Days available during the year 2008–09 Machine hours available Expenses	306 days 8 hours per day
	Rs.
Power Lighting Lubrication oil Repairs Depreciation Salary of Directors	2,79,600 20,000 40,000 1,00,000 50,000 1,00,000

(0)

(ii)

(A)	Standard hours for a Job	1000 hours
(B)	Incentive is allowed on percentage of time saved compared to standard hours
(C)	Rate of pay per hour	Rs.2/-
(D)	Incentive Scheme are as follows:
	% of time saved Saving upto 10% Saving between 11% and 20% Saving between 21% and 40%	Bonus 10% of time saved 15% of time saved 20% of time saved.

(0)

(iii)

Fixed costs are always fixed. Do you agree?

(0)

(iv)

Discuss in brief the accounting treatment of the material loss arising out of avoidable causes.

(0)

(v)

How the cost of unavoidable labour turnover is treated in cost accounts?

(0)

(c)

State with reason whether the following statements are true or false.

2x5

(i)

The cost of abnormal waste of materials in a contract is transferred to the costing P & . A/c.

(0)

(ii)

The break even point remains the same even if the fixed costs are reduced.

(0)

(iii)

In Contract Costing the work-in-progress does not include uncertified work.

(0)

(iv)

Fixed overheads per unit will reduce as production rises.

(0)

(v)

There is no difference between marginal cost and differential cost.

(0)

(a)

Ramnath Ltd. Manufactures and sells a typical brand of tiffin boxes under its on brand name. The installed capacity of the plants is 1,20,000 units per year distributable evenly over each month of calendar year. The cost accountant of the company has informed the following cost structure of the product, which is as follows:
Raw Material Rs.20 per unit.
Direct Labour Rs.12 per unit
Direct expenses Rs.2 per unit.
Variable overheads Rs.16 per unit.
Fixed overhead Rs.3,00,000 per year.
Semi–variable overheads are as follows:

(i)	Rs.7,500 per month upto 50% capacity &
(ii)	Additional Rs.2,500 per month for every additional 25% capacity utilization or part thereof, the plant was operating at 50% capacity during the first seven months of the calendar year 2009, at 100% capacity in the remaining months of the year.

The selling price for the period from 1st Jan, 2009 to 31st July 2009 was fixed at Rs.69 per unit. The firm has been monitoring the profitability and revising the selling price to meet its annual profit target of Rs.8,00,000.
You are required to suggest the selling price per unit for the period from 1st August 2009 to 31st December 2009.
Prepare cost sheet clearly showing the total and per unit cost and also profit for the period.

(A)	From 1st Jan. to 31st July 2009.

(B)	From 1st Aug. To 31st Dec.2009.

3+3

(0)

(b)

Discuss the uses of Break Even Analysis. How P/V Ratio can be improved?

2+2

(0)

(a)

Rama & Co. Undertook a contract for Rs.2,80,000 for constructing a building. The following is the information concerning the contract during the year 2009:

Particulars	Rs.
Materials Purchased Labour engaged on site Plant installed at site at cost Direct expenditure Other charges Materials sent to site Materials returned to stores Work certified Value of plant as on 31st Dec.,2009 Cost of work not yet certified Material at site 31st Dec.2009 Wages accrued 31st Dec.2009 Direct expenditure accrued 31st Dec.,2009 Cash received from contractee	95,000 75,000 25,000 3,000 5,000 90,000 600 2,00,000 15,000 5,000 1,900 2,500 250 1,90,000

Prepare contract account in the books of Rama & Co. for the year ending 31st Dec., 2009 and show

(i)	The total profit and
(ii)	Profit to be carried over to Profit and Loss A/c.

6+2

(0)

(b)

What is Bin Card? Give its specimen.

1+1

(0)

(a)

Closing stock lying on the last day of accounting year is valued at market price. Whether valuation is acceptable.

(0)

(b)

From the following information, Calculate

1x4

(i)

The overhead absorption rate based on direct labour hours

(0)

(ii)

The overhead absorption rate based on machine hours

(0)

(iii)

Under absorption of overheads and

(0)

(iv)

Over absorption of overheads.

		Budgeted	Actual
Direct Material Direct Labour Production overheads Direct Labour Hours Machine Hours	Rs. Rs. Rs.	1,10,000 2,20,000 2,20,000 50,000 55,000	1,20,000 2,40,000 2,10,000 60,000 60,000

(0)

(c)

For ABC Ltd., if the margin of safety is Rs.2,40,000(40% of sales) and P/V ratio is 30%. Calculate:

1x4

(i)

Break Even Sales

(0)

(ii)

Amount of Profit on Sales of Rs.9,00,000

(0)

(iii)

Sales for a profit of Rs.50,000

(0)

(iv)

Total Variable Costs

(0)

Accounting • June 2010

This Paper has 64 answerable questions with 0 answered.

P–2(ACT) *Syllabus 2008*
Time Allowed : 3 Hours	Full Marks : 100

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

SECTION I

Answer Question No. 1 which is compulsory and any two
questions from the rest of Section I.

Marks

(a)

In each of the following one of them is correct. Indicate the correct answer.

1x9=9

(i)

‘Brand Value’ for a business is:

A.	Capital
B.	Asset
C.	Profit
D.	Liability

(0)

(ii)

Sale of goods has:

A.	Only Revenue effect
B.	Only Expense effect
C.	Both Revenue effect and Expense effect
D.	None of the above.

(0)

(iii)

Error of omission means:

A.	That errors are compensating each other
B.	That any entry is totally missed
C.	That there is a wrong entry in the books of accounts
D.	That a transaction is recorded twice.

(0)

(iv)

Cash sales at exhibition hall are:

A.	Recorded in Journal Proper
B.	Recorded in Cash Book
C.	Recorded in Sales Book
D.	Not recorded.

(0)

(v)

In case of an ‘Unpresented Cheque’

A.	Bank Balance in Cash Book is more than Bank Passbook
B.	Bank Balance in Cash Book is less than Bank Passbook
C.	Either (A) or (B)
D.	No effect in both the books.

(0)

(vi)

A Bill of Exchange is:

A.	Drawn on a specific banker
B.	Drawn by seller and accepted by banker
C.	An unconditional undertaking signed by the maker
D.	An unconditional order signed by the maker

(0)

(vii)

Joint Venture Account is a

A.	Nominal Account
B.	Real Account
C.	Artificial Personal Account
D.	Representative Personal Account

(0)

(viii)

The abnormal Loss on Consignment is credited to:

A.	Profit and Loss Account
B.	Consignee’s Account
C.	Consignment Account
D.	Insurance Company Account

(0)

(ix)

A Capital Reserve is built out of

A.	Recurring profits
B.	Non–recurring profits
C.	Revenue
D.	Reserve Fund.

(0)

(b)

Fill in the blanks:

1x5=5

(i)

Debtor is a person who ________ money to the business.

(0)

(ii)

Every debit has a ________ credit.

(0)

(iii)

Cash account never has ________ balance.

(0)

(iv)

Goodwill can be better explained as ________ asset.

(0)

(v)

If the two sides of the trial balance tally, it is indication of the fact that the books of accounts are ________ accurate.

(0)

(c)

State with reasons whether the following statements are ‘true’ or ‘false’:

2x8=16

(i)

Loan taken for 5 years is a current liability.

(0)

(ii)

Error of Principle affects the Trial Balance.

(0)

(iii)

P & L A/c is for a period of time.

(0)

(iv)

Consignee is the owner of consignment stock.

(0)

(v)

Joint Venture is a Temporary partnership.

(0)

(vi)

Income received is an asset.

(0)

(vii)

Goodwill is fictitious asset.

(0)

(viii)

If the consignee gets del–credere commission, loss of bad debt is borne by him.

(0)

(a)

Pass necessary journal entries to rectify the following errors:

1x4

(i)

Purchase of goods for Rs. 300 from Nathan was wrongly entered in sales book.

(0)

(ii)

Rs. 375 paid as salary to cashier Dhawan was debited to his personal account.

(0)

(iii)

A bill for Rs. 2,750 for extension of building was debited to building repairs account.

(0)

(iv)

Goods of Rs. 500 returned by Raja were taken into stock, but returns were not posted.

(0)

(b)

X drew a bill on Y for Rs. 1,000 payable two months after date. Immediately after its acceptance, X sent the bill to his banker for collection. On the due date bank collects the bill and sends the advice if collection after deducting Rs. 2 as collection charges.
Pass Journal entries in the books of X and Y.

(0)

(c)

The provision for doubtful Debts A/c shows a balance of Rs. 5,000 on 1st January, 2009. The Bad Debts during the year 2009 amounted to Rs. 3,000. The Sundry Debtors on 31st December, 2009 are Rs. 50,000. On 31st December, 2009, there is an additional Bad Debts of Rs. 3,000. Create a new Provision for Bad Debts @ 10% on Debtors.

You are required to show how the different items will appear in the firm’s Profit and Loss A/c and Balance Sheet.

(0)

(a)

State which item of expenditure would be charged to capital and which to revenue:

1x3=3

(i)

Freight and cartage on the new machine Rs. 150, erection charges Rs. 200.

(0)

(ii)

Fixtures of the book value of Rs. 1,500 were sold off at Rs. 600.

(0)

(iii)

A sum of Rs. 1,100 was spent on painting the factory.

(0)

(b)

A plant is purchased for Rs. 20,000. It is depreciated @ 5% per annum on reducing balance for five years, when it becomes absolute due to new methods of production and is scrapped. The scrap produces Rs. 5,385.
Show the plant account in the ledger.

(0)

(c)

What is ABC Analysis?

(0)

(a)

Journalise the following transactions in the books of Ramesh:

1x3=3

(i)

Started business with Rs. 10,00,000/-, out of which Rs. 1,00,000 was borrowed from ICICI as loan.

(0)

(ii)

Machinery purchased for Rs. 4,00,000/- on credit and Furniture Purchased for Rs. 1,50,000 on cash.

(0)

(iii)

Deposited cash in Vijaya Bank Current A/c 2,50,000/-.

(0)

(b)

The following information is available from Suresh’s records:

Particulars	31st March, 2009 Rs.	31st March, 2008 Rs.
Creditors	16,000	10,000
Bank Overdraft	30,000	—
Bank Balance	—	20,000
Plant and Machinery	40,000	20,000
Furniture	8,000	8,000
Debtors	1,04,000	60,000
Stock of Goods	56,000	68,000

Suresh had withdrawn Rs. 10,000 for personal expenses and Rs. 9,000 for his son’s marriage. Out of business funds, he had also purchased a residential building costing Rs. 40,000 which is not shown in the above balances. Additions to machinery were made on 1st April, 2008. Depreciation at 10% p.a. should be provided on plant and machinery.
Find out Suresh’s net profit for the year ended 31st March, 2009.

(0)

SECTION II

Answer Question No. 5 which is compulsory and any two
questions from Section II

Marks

(a)

In each of the following, one of the alternatives is Correct. Indicate the correct answer:

1x10=10

(i)

Which of the following is a cost behaviour oriented approach to product costing?

A.	Absorption Costing
B.	Marginal Costing
C.	Process Costing
D.	Job Order Costing

(0)

(ii)

Over which of the following costs, management is likely to have least control:

A.	Wages Cost
B.	Building Insurance Cost
C.	Machinery Breakdown Cost
D.	Advertisement Cost

(0)

(iii)

Which of the following indicates BEP?

A.	Sales Revenue — Variable Cost
B.	Profit = Fixed Cost + Variable Cost
C.	Contribution = Fixed Cost
D.	Contribution + Fixed Cost = Profit

(0)

(iv)

Payment of Royalties is:

A.	Direct Expenses
B.	Factory Overheads
C.	Charged to P & L
D.	Administration Cost.

(0)

(v)

Bad debts are treated as:

A.	Direct Expenses
B.	Cost of Production
C.	Selling Overheads
D.	Distribution Overheads

(0)

(vi)

In the situation of increasing prices, the valuation of closing stock is more under:

A.	FIFO
B.	LIFO
C.	Simple average
D.	Weighted average

(0)

(vii)

Re–order level indicates

A.	Level when a replenishment order is placed
B.	Level beyond which stocks are not allowed to reach
C.	Quantity Ordered
D.	Economic Order Quantity.

(0)

(viii)

An increase in Fixed Cost will result into:

A.	Decrease in PV Ratio
B.	Decrease in Contribution per unit
C.	Increase in Break Even level
D.	Increase in PV Ratio.

(0)

(ix)

Which of the following is not usually included in Goods Received Note?

A.	Date of receipt
B.	Quantity received
C.	Price of goods
D.	Description of goods.

(0)

(x)

Which of the following is usually prepared daily by employees for each job worked on?

A.	Labour Job Ticket
B.	Time Card
C.	Punch Card
D.	Cost Control Card.

(0)

(b)

State with reasons whether the following are ‘True’ or ‘False’

2x8=16

(i)

Variable Cost per unit will not change.

(0)

(ii)

Under LIFO method, prices are close to current market prices.

(0)

(iii)

Primary Packing is an item of prime cost.

(0)

(iv)

Order should be automatically placed with supplier quoting lowest price.

(0)

(v)

The BEP remains same even in fixed cost are reduced.

(0)

(vi)

Abnormal cost are not controllable.

(0)

(vii)

Fixed Overheads per unit do not reduce as production rises.

(0)

(viii)

Finance Expenses are included in cost sheet.

(0)

(c)

Specify the method of determination of cost and the cost unit for the following industries:

1x4=4

(i)

Hospital

(0)

(ii)

Readymade garments

(0)

(iii)

Canteen

(0)

(iv)

House Building.

(0)

(a)

Calculate the EOQ from the following information:

Monthly requirement
Ordering Cost
Price per unit
Inventory carrying cost

=
=
=
=

1000 units
Rs. 60 per order
Rs. 100
15% on average inventory

(0)

(b)

The Sales and Profit for Trident Ltd. during 2008 and 2009 were as follows:

Year	Sales Rs.	Profit Rs.
2008 2009	2,00,000 3,00,000	20,000 40,000

Find out:
P/V ratio, Break even point and Margin of Safety

(a)	Sales required to earn profit of Rs. 80,000.
(b)	What will be the profit if sales are Rs. 2,40,000?

(0)

The following are the costing records for the year 2009 of a manufacturer:

Production 1,000 units, Cost of raw materials Rs. 20,000, Labour cost Rs. 12,000, Factory overheads Rs. 8,000, Office overheads Rs. 4,000, Selling expenses Rs. 1,000, Rate of Profit 25% on the selling price.
The manufacturer decided to produce 1,500 units in 2010. It is estimated that the cost of raw materials will increase by 20%, the labour cost will increase by 10%, 50% of the overhead charges and fixed and the other 50% are variable. The selling expenses per unit will be reduced by 20%. The rate of profit will remain the same.
Prepare a cost statement for the year 2010 showing the total profit and selling price per unit.

5+5=10

(0)

(a)

Classify packing of Products. How will you treat packing costs according to their nature?

3+3=6

(0)

(b)

What is labour turnover? How will you treat it in costs?

2+2=4

(0)

Accounting • December 2010

This Paper has 69 answerable questions with 0 answered.

P–2(ACT) *Syllabus 2008*
Time Allowed : 3 Hours	Full Marks : 100

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

SECTION I

Answer Question No. 1 which is compulsory and any two
questions from the rest of Section I.

Marks

(a)

In each of the following one is correct, indicate the correct answer.

1x9=9

(i)

Opening Capital Rs.30,000, Closing Capital Rs.15,000, Loss during the year Rs.8,000. Drawings Rs.7,000, Additional Capital introduced will be:

(A)	Nil	(B)	8,000
(C)	16,000	(D)	23,000

(0)

(ii)

On purchase of goods of the list price of Rs.10,000 from Ram who allowed 10% trade discount and charged 10% Value Added Tax (VAT), Purchases Account to be debited with:

(A)	Rs.10,000	(B)	Rs.9,000
(C)	9,900	(D)	None of these

(0)

(iii)

Goods costing Rs.1,000 (Sale Price Rs.1,200) used in making furniture should be credited to:

(A)	Sales Account with Rs.1,200	(B)	Sales Account with Rs.1,000
(C)	Purchases Account with Rs.1,000	(D)	Furniture A/c with Rs.1,000

(0)

(iv)

In Cash Book Debit balance of Rs.112 was brought forward as credit balance of Rs.121. While preparing a Bank Reconciliation Statement taking the balance as per Cash Book as the starting point:

(A)	Rs.112 to be added	(B)	Rs.233 to be added
(C)	Rs.121 to be added	(D)	Rs.112 to be subtracted

(0)

(v)

Sales Rs.3,00,000, Profit =l/3rd on cost, Cost of goods available for sale Rs.5,00,000, Purchases Rs.1,00,000, Closing Inventory is:

(A)	Rs.2,00,000	(B)	Rs.3,00,000
(C)	Rs.2,75,000	(D)	None of these

(0)

(vi)

Date of purchase 1.7.2009, Purchase Price of an old Machine Rs.80.000, Repairs Rs.15,000, Installation Charges Rs.5,000, Residual Value Rs.20,000, Useful life 4 years, Accounting year–financial year. Date when Machine was put to use – 1.10.2009. Depreciation for the year 2009–2010 will be:

(A)	Rs.20,000	(B)	Rs.15,000
(C)	Rs.10,000	(D)	None of these

(0)

(vii)

H’s Trial Balance contains the following information:

	Rs.
Bad debts Discount allowed Provision for discount on debtors Provision for Doubtful debts Sundry Debtors	3,000 3,000 3,200 3,500 50,000

At the end of the year, it is desired to maintain a provision for Doubtful debts at 10% and provision for discount on debtors at 4%. Sundry Debtors will appear in the Balance Sheet at a figure of:

(A)	Rs.43,200	(B)	Rs.39,744
(C)	Rs.44,700	(D)	None of these

(0)

(viii)

2000 kg of apples are consigned to a wholesaler, the cost being Rs.3 per kg plus Rs.400 of freight, it is known that a loss of 15% is unavoidable. The effective cost per kg will be:

(A)	Rs.2.50	(B)	3.76
(c)	1.70	(D)	1.50

(0)

(ix)

On 1.4.09 X drew a bill of Rs.1,00,000 after sight for 3 months on Y who accepted the bill on 1.5.09. On 4.6.09, the bill was discounted at 12% p.a. At maturity, the bill returned dishonoured, due to Y’s insolvency, noting charges Rs.500 and 40 paisa in a rupee is recovered from Y’s estate. The amount of , deficiency in Y’s books will be:

(A)	60,000	(B)	40,000
(c)	60,300	(D)	40,200

(0)

(b)

Fill in the blanks :

1x5=5

(i)

Reserve for discount on creditors has a ____________ balance.

(0)

(ii)

WDV Rate of Depreciation =_____________________

(0)

(iii)

Discount charges on discounting a bill receivable accepted by consignee are debited to _________ account.

(0)

(iv)

Only ___________ property may be the subject matter of consignment and joint venture.

(0)

(v)

The term of bill after sight commences from the date of ______________ .

(0)

(c)

State the reasons whether the following statements are True or False:
(No marks shall be awarded if reason is not given)

2x8=16

(i)

Prudence is a concept to recognize realized losses and not profits.

(0)

(ii)

Straight Line Method of Depreciation is followed to have a uniform charge for depreciation and repairs together.

(0)

(iii)

Net Profit is reflected in higher cash balances.

(0)

(iv)

The relationship between a Consignee and a Consignor is that of a principal and an agent.

(0)

(v)

Deferred Revenue Expenditure is current year’s revenue expenditure to be paid in later years.

(0)

(vi)

Fixed assets are valued at cost or net realizable value, whichever is lower.

(0)

(vii)

Contingent liability is an unascertained liability but its amount and due date are determinate.

(0)

(viii)

Discount columns of the cash book may show either debit balance or credit balance.

(0)

(a)

Give one word or phrase that describe the following:

½x10=5

(i)

Making provision for doubtful debts is an application of which Accounting Principle?

(0)

(ii)

Accounting of a small calculator as an expense and not as an asset is an application of which Accounting Principle?

(0)

(iii)

Appending notes to the financial statements is an application of which Accounting Principle?

(0)

(iv)

An entry of which credit and debit aspects are simultaneously recorded in the cash book?

(0)

(v)

The source document used for recording entries in the Returns Outward Book.

(0)

(vi)

The error which arises when the transaction is recorded ignoring the distinction between the Capital item and Revenue item.

(0)

(vii)

The order in which the least liquid asset is shown first and the most urgent payment to be made is shown last.

(0)

(viii)

Nature of Provision for Depreciation Account.

(0)

(ix)

Nature of Provision for Doubtful Debts Account.

(0)

(x)

The type of accounts which are never balanced but are closed.

(0)

(b)

State the basic object of:

1x5=5

(i)

Preparing Bank Reconciliation Statement.

(0)

(ii)

Preparing the Trial Balance.

(0)

(iii)

Opening a Suspense Account.

(0)

(iv)

Using Profit and Loss Adjustment Account in the rectification of errors.

(0)

(v)

Preparing Income Statement.

(0)

(a)

Show the Accounting equation for the following transactions of Rakesh Bihari Mittal:

(i)	Sold goods costing Rs.30,000 for Rs.50,000 to Shyam.

(ii)	Purchased household goods for Rs.15,000 giving Rs.5,000 in cash and the balance through a loan.

(iii)

Received Rs.49,500 from Shyam in full settlement of an account of Rs.50,000.

(iv)	Paid Salary Rs.500 and Salary still outstanding Rs.100.

(v)	Paid Rent–in–advance Rs.200.

(vi)	Withdrew goods for personal use (Cost Rs.500, Sale Price Rs.600).

½x6=3

(0)

(b)

Journalize the following transactions in the books of Anju Mittal:

(i)	Received Rs.975 from Shyam on his account of Rs.1,000.

(ii)	Sold goods costing Rs.40,000 to Anil at a profit of 20% on sales less 20% trade discount and charged 10% Value Added Tax.

(iii)

Vishal Pandey paid Rs.975 towards a debt of Rs.1,000 which was written off as bad in the previous year.

1x3=3

(0)

(c)

Pass the necessary rectifying entry for the following errors in the subsidiary books of Prarthana Mittal, a dealer in cloth:

(i)	A cash sale of Goods to X Rs.17 posted as Rs.71.

(ii)	A credit sale of Goods to Y Rs.17 posted as Rs.71.

(iii)

A credit sale of Furniture to Z Rs.17 posted as Rs.71.

(iv)	A credit sale of Goods of Rs.423 to Krishan passed through the Purchase Book as Rs.432 and posted therefrom to the credit of Kishan as Rs.423.

1x4=4

(0)

Answer any four of the following:

2.5x4=10

(a)

X draws on Y a bill for Rs.2,00,000 on 1.4.09 for 3 months. Y accepts the bill and sends it to X who gets it discounted for Rs.1,95,000. X immediately remits Rs.97,500 to Y. On due date, X being unable to remit the amount due accepts a bill for Rs.1,20,000 for 2 months which is discounted by Y for Rs.1,17,600. Y sends Rs.7,800 to X out of the same. How much discount will be borne by X at the time of remittance of Rs.7,800?

(0)

(b)

Bharat Tushar Ltd. which depreciates its machinery at 10% p.a. on diminishing balance method, had on 1^st April, 2009 Rs.29,160, to the debit of Machinery Account. On 31^st March, 2010, the company decided to change the method of depreciation to straight line method with effect from 1^st April, 2006, the rate of depreciation remaining the same. Pass the necessary journal entry on account of change in method of depreciation.

(0)

(c)

On 1.7.2009, Nikita Mittal commenced her business with Rs.5,00,000. On 1.10.2009 she sold her private investments (Cost Rs.50,000, Face value Rs.40,000) at 125% of face value and brought the proceeds into her business. Her drawings were Rs.1,000 p.m. Goods costing Rs.11,000 were taken by her for personal use. On 31.3.2010, Capital before the following adjustments is Rs.7,00,000, Outstanding Expenses Rs.21,000 and Prepaid Expenses Rs.4,000. Provide Interest on Capital @ 12% p.a. and for group incentive to staff @ 5% on Net Profit after charging such incentive and interest on capital. Calculate the Profit/Loss for the year ended 31^st March, 2010.

(0)

(d)

Himanshu Gupta sent out goods costing Rs.80,000 to Navin Joshi as to show 20% profit on invoice price. 40% goods were lost in transit. 60% of the goods received were sold half at invoice price and the balance at 25% above the invoice price. Rate of Commission is 10% on sales at invoice price plus 50% of gross sales less all commission exceeds sales at invoice price. Calculate the amount of commission.

(0)

(e)

A and B enter into a joint venture sharing profit and losses in the ratio 3 : 2. A purchased goods costing Rs.2,00,000. B sold 95% goods for Rs.2,50,000. A is entitled to get 1% commission on purchase and B is entitled to get 5% commission on sales. A drew a bill on B for an amount equivalent to 80% of original cost of goods. A got it discounted at Rs.1,50,000. Calculate B’s share of profit.

(0)

(f)

How will you deal with the following items while preparing the Income and Expenditure Account for the year ending on 31^st December, 2009 and the Balance Sheet as on that date?

Subscription outstanding as on 31.12.2008 : Rs.9,500 (including Rs.500 for 2007)
Subscription received in advance as on 31.12.,2008: Rs.3,000 (including Rs.200 for 2010)
Subscription received during 2009 for 2007 Rs.400, for 2008 Rs.8,900, for 2009 Rs.1,34,400, for 2010 Rs.4,000, for 2011 Rs.1,200.
Subscription outstanding as on 31.12.2009 : Rs.7,000.

(0)

SECTION II

Answer Question No. 5 which is compulsory and any two
questions from Section II

Marks

(a)

In each of the following, one is correct, indicate the correct answer:

1x10=10

(i)

Which of the following is False?

(A)	Three basic objectives of Cost Accounting are to ascertain cost, to control cost and to provide information for decision making.
(B)	In Cost Sheet net realizable value of normal scrap of direct materials is deducted from the cost of materials.
(C)	In a Cost Sheet, Selling and Distribution Overheads are divided by the total number of units produced to arrive at selling and distribution overheads per unit.
(D)	Conversion Cost is equal to direct labour cost plus production overheads.

(0)

(ii)

Which of the following is False?

(A)	Waste does not have any realizable value but scrap has small realization value.
(B)	Spoilage cannot be rectified but defectives can be rectified by incurring additional materials labour and overheads costs.
(C)	Scrap involves only loss of materials but spoilage involves not only the loss of materials but also of labour and overheads incurred up to stage of spoilage.
(D)	In ABC analysis, ‘A’ group of items consists of those materials, the value of which is not high but which are used in large quantities.

(0)

(iii)

Which of the following is False?

(A)	Perpetual Inventory System is a system of recording stores balances after every receipt and issue to facilitate regular checking and to obviate closing down for stock-taking but Continuous Stock Taking is regular physical verification of materials throughout the year.
(B)	Bin Card shows only the quantity of materials received, issued and in hand at any point of time but Stores Ledger shows both the quantity and money value of materials received, issued and in hand at any point of time.
(C)	Closing Stock is close to current economic Value under FIFO method of pricing.
(D)	LIFO method of pricing results in higher profits during the period of rising prices.

(0)

(iv)

Which of the following is False?

(A)	Cost of normal Waste, Scrap, Spoilage, Defectives, Idle Time and Fringe Benefits should be treated as part of cost of production.
(B)	Overtime Premium due to seasonal pressure of work and Preventive Labour Turnover Costs should be treated production overheads.
(C)	In Production Department Idle Time Wages and Overtime Premium due to break down of machinery should be charged to Costing Profit & Loss Account.
(D)	Amount of bonus under Halsey Plan and Rowan Plan is same when time saved is exactly 50% of standard time.
(E)	The total earnings are same under Taylor’s Differential Piece Rate, Merrick’s Differential Piece Rate and Gantt Task System when efficiency is exactly 100%.

(0)

(v)

Which of the following is False?

(A)	Allocation of overheads is the process of charging the full amount of overheads to a particular cost centre.
(B)	Apportionment of overheads is the process of charging a proportion of common item of overheads to different cost centres.
(C)	Absorption of overheads is the process of charging overheads to products or services.
(D)	Re–apportionment of overheads is the Apportionment of overheads of Production Departments over the Service Departments.

(0)

(vi)

Which of the following is False?

(A)	Blanket Overhead Rate is a single rate of overhead absorption computed for the entire factory but Departmental Overhead Rates are the separate rates of overhead absorption computed for each individual department/cost centre
(B)	Actual overhead rate is calculated by dividing the actual overheads by the actual base but Pre–determined overhead rate is calculated in advance by dividing the budgeted overheads by the budgeted base.
(C)	Time Booking is a system of recording the arrival and departure time of each worker but Time Keeping is a system of recording the time spent by each worker on various jobs, orders or processes.
(D)	Job Costing is that form of specific order costing under which each job is treated as a cost unit and costs are accumulated and ascertained separately for each job but Process Costing is a method of costing under which all costs are accumulated for each stage of production (also called process of production) and the cost per unit of product is ascertained at each stage of production by dividing the total cost of each process by the normal output of that process.

(0)

(vii)

Which of the following is False?

(A)	Marginal Costing is the practice of charging all variable costs to operations, processes or products and writing off all fixed costs against profits in the period in which they arise but Absorption Costing is the practice of changing all variable manufacturing costs and fixed production overheads to operations, processes or products and writing off administration, selling and distribution overheads against profits in the period in which they arise.
(B)	While valuing Stock of Work in Progress and Finished Goods fixed production overheads are included under Absorption Costing and not under Marginal Costing.
(C)	Relevant costs are those future costs which differ under different alternatives. These can be changed by the decision of the management.
(D)	All irrelevant costs are not sunk costs because some future costs under both the alternatives are irrelevant costs for decision making but are not sunk costs.
(E)	Book value of old machine in replacement decision is a relevant cost in decision making.

(0)

(viii)

Cost per unit Rs.200, Cost of an order Rs.100, Semi–annual carrying cost per unit 5%, Total carrying and Ordering Cost at Economic Order Quantity Rs.4,000. EOQ is:

(A)	100 units	(B)	200 units
(C)	300 units	(D)	None of these

(0)

(ix)

Piyush & Pranav Ltd. provides you the following information:

Activity level	10,000 hours	20,000 hours	30,000 hours
Overheads (Rs.)	3,00,000	4,20,000	5,40,000

Activity Level at which the standard overhead Rate of Rs. 15 per hour has been fixed is:

(A)	30,000 hours	(B)	40,000 hours
(C)	50,000 hours	(D)	60,000 hours

(0)

(x)

P/V ratio 40%, Margin of Safety 60%, Sales Rs.1,50,000, Fixed Costs are:

(A)	Rs.60,000	(B)	Rs.36,000
(C)	Rs.24,000	(D)	None of these

(0)

(b)

State the reasons whether the following statements are True or False:
(No marks shall be awarded if reason is not given)

2x5=5

(i)

Fixed Cost per unit remains fixed but variable cost per unit vary with variation in output.

(0)

(ii)

Economic order quantity is that order size at which each of he Ordering Cost and Carrying Cost is minimum.

(0)

(iii)

When time saved is more than 50% of standard time Rowan Plan allows more earnings to workers than Halsey Plan.

(0)

(iv)

Under/over absorption of overheads arises only when actual overhead rates are used.

(0)

(v)

Marginal Costing does not differ from Direct Costing at all.

(0)

(c)

Suggest the suitable Method of Costing and Cost Unit for the following industries:

(i)	Oil Refinery

(ii)	Bicycle Manufacturing

(iii)

Interior Decoration

(iv)

Airlines

(v)

Coal

2x5=10

(0)

Attempt any two of the following:

2x5=10

(a)

Average usage 50 units per week, Minimum re-order period 4 weeks, Maximum usage 75 units per week, Average re–order period 5 weeks, Average stock level 375 units. Calculate Re–order quantity.

(0)

(b)

The cost accountant of Y Ltd. has computed labour turnover rates for the quarter ended 31^st March, 2010 as 10%, 5% and 3% respectively under ‘Flux Method’, ‘Replacement Method’ and ‘Separation Method’. If the number of workers replaced during that quarter is 30, find out the number of (a) workers left and discharged and (b) workers recruited and joined.

(0)

(c)

Two workmen, ‘A’ and ‘B’, produce the same product using the same material. Their normal wage rate is also the same. ‘A’ is paid bonus according to the Rowan system, while ‘B’ is paid bonus according to the Halsey system. The time allowed to make the product is 50 hours. ‘A’ takes 30 hours while ‘B’ takes 40 hours to complete the product. The factory overhead rate is Rs.5 per man hour actually worked. The factory cost for the product for ‘A’ is Rs.3,490 and for ‘B’ it is Rs.3,600. Compute the normal rate of wages.

(0)

(d)

There are 12 holidays on account of festivals and national holidays not falling on Sundays and Saturdays. The factory works 8 hours a day and 4 hours on Saturday. Maintenance hours 200, Machine room normally works on 90% capacity throughout the year. Setting up time 10% (out of which 50% unproductive). Power consumption of machine 20 units per hour. Rate of power per 100 units Rs.570. Calculate the Cost of Power per machine hour for the purposes of computing Machine hour rate (a) if Power is used during setting up (b) if no Power is used during setting up.

(0)

(e)

Margin of Safety Rs.64,000, Break even Sales 1,600 units, Total Cost Rs.41,600, Margin of Safety 6,400 units. Calculate the Fixed Costs.

(0)

Bharat Jhunjhunwala Ltd. provides you the following figures for he year 2009–10:

	Rs.
Direct Material Direct Wages Production Overheads (25% variable) Administration overheads (75% Fixed) Selling and Distribution Overheads (2/3rd Fixed) Sales @ Rs.125 per unit	3,20,000 8,00,000 4,80,000 1,60,000 2,40,000 25,00,000

For the year 2010–2011, it is estimated that:

1.	Output and sales quantity will increase by 20% by incurring additional Advertisement Expenses of Rs.45,200.
2.	Material Prices will go up 10%.
3.	Wage Rate will go up by 5% along with, increase in overall direct labour efficiency by 12%.
4.	Variable overheads will increase by 5%.
5.	Fixed production overheads will increase by 33'/3%.

Required:

(a) Calculate the Cost of Sales for the year 2009–2010 and 2010–2011.

(b) Find out the new selling price for the year 2010–2011

(i)	if the same amount of profit is to be earned as in 2009–2010

(ii)	if the same percentage of profit to sales is to be earned as in 2009–2010.

(iii)

if the existing percentage of profit to sales is to be increased by 25%.

(iv)	if profit per unit Rs. 10 is to be earned.

3x2=6
1x4=4

(0)

Shri Rani Sati Ltd. provides you the following information:

Year 2009		Year 2010
Sales Total Profit	Rs.15,00,000 Rs.3,60,000	Sales Total Cost	Rs.5,00,000 Rs.5,40,000

During the next year 2011, the Selling Price and Variable Cost are expected to be reduced by 20% and 33–l/3% respectively and Fixed Costs are expected to increase by 25%.
Required:

(i)	Estimate the Profit if Sales Units are expected to increase by 100%.

(ii)	Estimate the Sales in order to increase Profit by Rs.2,40,000 per year.

(iii)

Estimate the Sales so as to earn a return of 25% on sales.

(iv)	Estimate the Sales so as to earn a return of 30% on Capital Employed. Working Capital is 25% of Sales and 20% of Capital employed.

(v)	Estimate the BEP for the next year 2011.

AJIT KUMAR SINGH

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Friday, March 25, 2011

Foundation, Inter Group 1&2 And Final Group 1&2 Question Paper

Economics and Business Fundamentals

Business Mathematics and Statistics Fundamentals

Intermediate - Group I

Financial Accounting

Commercial and Industrial Laws and Auditing

Applied Direct Taxes

Intermediate - Group II

Cost and Management Accounting

Operations Management and Information System

Applied Indirect Taxes

Final Group III

Capital Market Analysis and Corporate Laws

Financial Management and International Finance

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