Asian College of Higher Studies (ACM)

Ekantakuna, Lalitpur

FIRST TERMINAL EXAM- 2068

SET-B

Subject: - Cost & Management Accounting FM: 50

Level:- BBS First year PM: 20

Time: 1.5 Hrs

Candidates are required to give their answer in their own words as far as possible. The figure in the margin indicates full marks.

Attempt all questions.

Q.1. Show the importance of cost accounting. 5

Q.2. The following cost and output are given.

Output	200	400	600	800	1,000
Cost Rs in 100	50	60	70	80	90

Required:-

· Segregation cost into fixed and variable by using least square method 3

· Find out the volume at the cost of Rs.10,000 1

Q.3. A supplier is in need of 1,60,000 kgs of a material costing Rs.5 each kg for the year. The cost of placing and receiving an order is Rs.150. Carrying cost is estimated to be 10% of average inventory value. The supplier is planning to procure inventory at a quantity discount of 2% in an equal installment of 40,000 kgs.

Required:- i) Cost of EOQ & Cost of Offer 4

ii) Is the discount policy acceptable? 1

Q. 4. The following information is provided.

Annual consumption: 3,60,000 Kgs (360 days of working)

Safety stock is 36 days’ consumption.

Delivery Period 10 days

Required:-Ordering Level 5

Q.5. A factory provides you with the following information.

Standard wage rate Rs.40 per hour

Standard output per hour 50 units (8 hours a day)

Actual output realized as follows:

Bhuwan 400 units

Rajesh 380 units

Required:- Earning of each worker under Taylor’s differential system 5

Q. 6. The production departments P1& P2 which work 8 hours a day for 30 days a month and other information are given.

Particular	Total	Prod Dep-A	Prod Dep-B	Service Dep.
No. of workers	50	25	15	10
Space occupied( sq.ft)	2000	900	600	500
From Service dept.	100 %	65 %	35 %	---
Rent Rs.	10,000
Supervisor’s salary Rs.	16,000	13,000	12,000	1,000
Welfare Rs.	25,000
Assets value Rs.	4,00,000	2,50,000	1,00,000	50,000
Depreciation (15%)

Required:- Cost per unit of P1 & P2 6+1=7

Q.7. You are given the following information.

a. Cost of machine Rs.1,80,000 with Residual value Rs.25,000 & installation charges Rs.10,000.

b. Working hours of the machine 25,000 including Setting up time of 10%

c. Power consumption of Rs.9 per unit per one & half hour working

d. Repair, maintenance Rs.9,000 effective total machine hours

e. Annual lighting expenses Rs.10,500

f. Machine attendant’s annual salary Rs.35,000

Required:- Machine hour rate 4

Q. 8. A company produces three products A, B & C under a single production process.

The wage rate per hour is Rs. 40. The budgeted information has been obtained as follows.

Product	Output (Units)	Material Cost per unit(Rs.)	Labour Hour per unit	Machine Hour per unit
A	5,000	30	2.5	1
B	4,000	25	1	½
C	2,000	10	1.5	1.5

Total overhead cost and relevant cost driver are as under:

Overhead cost	Cost drivers	Amount ( Rs.)
Material receipt and inspection	No. of batches	30,000
Set up cost	No. of production run	50,000
Machine related cost	No. of machine hour	25,000

Each product is produced in a production of 500 units & no of batches for each of the products is 20.

Required:- Cost per unit using Volume based costing (Labour Hours) & ABC 5+10=15

Best of luck