<\/p>\n
This Paper has 26 answerable questions with 0 answered.<\/p>\n
Maximum Marks : 100 NIL 27,000 4,000 40,000 10,000 45,000<\/p>\n 50,000<\/p>\n 20,000 (i) Salary of Transport Manager (i) (i) 3 (0) Date 7 (0) The selling price per unit was Rs. 44 during the first three months. 6 (0) (i) New machinery for Rs. 3,00,000 was purchased but an old machinery costing Rs. 1,45,000 was sold for Rs. 50,000 and accumulated depreciation thereon was Rs. 75,000. Advise WX Ltd. whether the existing machine should be replaced or not.<\/p>\n \u2217In the question paper this word was wrongly printed as \u2018unit\u2019 instead of word \u2018hour\u2019. The answer provided here is on the basis of correct word i.e. \u2018Labour cost per hour\u2019.<\/p>\n 8 (0) 20,00,000 24,00,000 You are required to calculate: CA PE II Exam Papers Group\u00a0II Cost\u00a0Accounting\u00a0and Financial Management Nov 2008 This Paper has 26 answerable questions with 0 answered. Total No. of Questions \u2014 9] Time Allowed : 3 Hours Maximum Marks : 100 Answers to questions\u00a0are to be given only in\u00a0English\u00a0except in the cases of candidates who have opted for Hindi medium. … Read more<\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":""},"categories":[4731,120,4930],"tags":[],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/posts\/24561"}],"collection":[{"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/comments?post=24561"}],"version-history":[{"count":0,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/posts\/24561\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/media?parent=24561"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/categories?post=24561"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/tags?post=24561"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nTotal No. of Questions \u2014 9]
\nTime Allowed : 3 Hours <\/em><\/p>\n
\nAnswers to questions\u00a0are to be given only in\u00a0English\u00a0except in the cases of candidates who have opted for Hindi medium. If a candidate who has not opted for Hindi medium, answers in Hindi, his answers in Hindi will not be valued.
\nQuestion Nos.1 and 6 are compulsory.
\nAttempt three questions out of the remaining question numbers 2, 3, 4 and 5 and attempt two questions from the remaining Questions Nos. 7, 8 and 9.
\nWorking notes should form part of the answer.
\nMarks
\n1. (a) A product passes through three processes \u2018X\u2019, \u2018Y\u2019 and \u2018Z\u2019. The output of process \u2018X\u2019 and \u2018Y\u2019 is transferred to next process at cost plus 20 per cent each on transfer price and the output of process \u2018Z\u2019 is transferred to finished stock at a profit of 25 per cent on transfer price. The following informations are available in respect of the year ending 31st March, 2008:
\nProcess
\nX
\nRs. Process
\nY
\nRs. Process
\nZ
\nRs. Finished
\nStock
\nRs.
\nOpening stock
\nMaterial
\nWages
\nManufacturing Overheads
\nClosing stock
\nInter process profit included in
\nOpening stock 15,000
\n80,000
\n1,25,000
\n96,000
\n20,000<\/p>\n
\n65,000
\n1,08,000
\n72,000
\n32,000<\/p>\n
\n50,000
\n92,000
\n66,500
\n39,000<\/p>\n
\nStock in processes is valued at prime cost. The finished stock is valued at the price at which it is received from process \u2018Z\u2019. Sales of the finished stock during the period was Rs. 14,00,000.
\nYou are required to prepare:<\/p>\n
\n(ii)
\n(iii) Process accounts and finished\u00a0stock account\u00a0showing profit element at each stage.
\nProfit and Loss account.
\nShow the relevant items in the Balance Sheet.
\n12 (0)
\n(b) What are the limitations of inter\u2013firm comparison system? 3 (0)
\n(c) What is cost plus contract? State its advantages. 3 (0)
\n2. (a) A transport company has 20 vehicles, which capacities are as follows:
\nNo. of Vehicles
\n5
\n6
\n7
\n2 Capacity per vehicle
\n9 tonne
\n12 tonne
\n15 tonne
\n20 tonne
\nThe company provides the goods transport service between stations \u2018A\u2019 to station \u2018B\u2019.Distance\u00a0between these stations is 200 kilometres. Each vehicle makes one round trip per day an average. Vehicles are loaded with an average of 90 per cent of capacity at the time of departure from station \u2018A\u2019 to station \u2018B\u2019 and at the time of return back loaded with 70 per cent of capacity. 10 per cent of vehicles are laid up for repairs every day. The following informations are related to the month of October, 2008:<\/p>\n
\nSalary of 30 drivers
\nWages of 25 Helpers
\nWages of 20 Labourers
\nConsumable stores
\nInsurance (Annual)
\nRoad License (Annual)
\nCost of Diesel per litre
\nKilometres run per litre each vehicle
\nLubricant, Oil etc.
\nCost of replacement of\u00a0Tyres, Tubes, other parts etc.
\nGarage rent (Annual)
\nTransport Technical Service Charges
\nElectricity and Gas charges
\nDepreciation of vehicles Rs. 30,000
\nRs. 4,000 each driver
\nRs. 2,000 each helper
\nRs. 1,500 each\u00a0labourer
\nRs. 45,000
\nRs. 24,000
\nRs. 60,000
\nRs. 35
\n5 Km.
\nRs. 23,500
\nRs. 1,25,000
\nRs. 90,000
\nRs. 10,000
\nRs. 5,000
\nRs. 2,00,000
\nThere is a workshop attached to\u00a0transport department\u00a0which repairs these vehicles and other vehicles also. 40 per cent of transport manager\u2019s salary is debited to the workshop. The\u00a0transport department\u00a0is charged Rs. 28,000 for the service rendered by theworkshop during October, 2008. During the month of October, 2008 operation was 25 days.
\nYou are required:<\/p>\n
\n(ii) Calculate per ton\u2013km operating cost.
\nFind out the freight to be charged per ton\u2013km, if the company earned a profit of 25 per cent on freight.
\n12 (0)
\n(b) Explain the following: 6
\n(i) Job costing and batch costing. (0)
\n(ii) Profit centres and investment centres. (0)
\n(iii) Period cost and discretionary costs. (0)
\n3. (a) In a manufacturing company factory overheads are charged as fixed percentage basis on direct labour and office overheads are charged on the basis of percentage of factory cost. The following informations are available related to the year ending 31st March, 2008 :
\nProduct A Product B
\nDirect Materials
\nDirect Labour
\nSales
\nProfit
\nRs. 19,000
\nRs. 15,000
\nRs. 60,000
\n25% on cost Rs. 15,000
\nRs. 25,000
\nRs. 80,000
\n25% on sales price
\nYou are required to find out:<\/p>\n
\n(ii) The percentage of factory overheads on direct labour.
\nThe percentage of office overheads on factory cost.
\n6 (0)
\n(b) The following information is collected from the personnel department of ST limited for the year ending 31st March, 2008:
\nNumber\u00a0of workers at the beginning of the year
\nNumber\u00a0of workers at the end of the year
\nNumber\u00a0of workers left the company during the year
\nNumber\u00a0of workers discharged during the year
\nNumber\u00a0of workers replaced due to left and discharges
\nAdditional workers employed for expansion during the year 8,000
\n9,600
\n500
\n100
\n700
\n1,500
\nYou are required to calculate labour turnover rate by using separation method, replacement method and flux method.<\/p>\n
\n(c) Discuss briefly the benefits of “Direct Product Profitability”. 2 (0)
\n(d) How cost audit is useful to the society ? Discuss. 3 (0)
\n4. (a) The following are the details of receipts and issues of a material of stores in a manufacturing company for the period of three months ending 30th June, 2008:
\nReceipts:
\nDate Quantity (kgs) Rate per kg.
\nRs.
\nApril 10
\nApril 20
\nMay 5
\nMay 17
\nMay 25
\nJune 11
\nJune 24 1,600
\n2,400
\n1,000
\n1,100
\n800
\n900
\n1,400 5
\n4.90
\n5.10
\n5.20
\n5.25
\n5.40
\n5.50
\nThere was 1,500 kgs. in stock at April 1, 2008 which was valued at Rs. 4.80 per kg.
\nIssues:<\/p>\n
\nApril 4
\nApril 24
\nMay 10
\nMay 26
\nJune 15
\nJune 21 Quantity (kgs)
\n1,100
\n1,600
\n1,500
\n1,700
\n1,500
\n1,200
\nIssues are to be priced on the basis of weighted average method. The stock verifier of the company reported a shortage of 80 kgs. on 31st May, 2008 and 60 kgs. on 30th June, 2008. The shortage is treated as inflating the price of remaining material on account of shortage.
\nYou are required to prepare a Stores\u00a0Ledger Account.<\/p>\n
\n(b) What are the essential prerequisites of integrated\u00a0accounting\u00a0system? 4 (0)
\n(c) What do you mean by Idle time ? How would you treat idle time in cost\u00a0accounting? 3 (0)
\n5. (a) Maximum production capacity of JK Ltd. is 5,20,000 units per annum. Details of estimated cost of production are as follows:
\n\u2013 Direct material Rs. 15 per unit.
\n\u2013 Direct wages Rs. 9 per unit (subject to a minimum of Rs. 2,50,000 per month).
\n\u2013 Fixed overheads Rs. 9,60,000 per annum.
\n\u2013 Variable overheads Rs. 8 per unit.
\n\u2013 Semi\u2013variable overheads are Rs. 5,60,000 per annum up to 50 per cent capacity and additional Rs. 1,50,000 per annum for every 25 per cent increase in capacity or a part of it.
\nJK Ltd. worked at 60 per cent capacity for the first three months during the year 2008, but it is expected to work at 90 per cent capacity for the remaining nine months.<\/p>\n
\nYou are required, what selling price per unit should be fixed for the remaining nine months to yield a total profit of Rs. 15,62,500 for the whole year. 8 (0)
\n(b) Calculate machine hour rate for recovery of overheads for a machine from the following information:
\nCost of machine is Rs. 25,00,000 and estimated salvage value is Rs. 1,00,000. Estimated working life of the machine is 10 years. Annual working hours are 3,000 in the factory. The machine is required 400 hours per annum for repairs and maintenance. Setting\u2013up time of the machine is 156 hours per annum to be treated as productive time. Cost of repairs and maintenance for whole working life of the machine is Rs. 3,50,000. Power used 15 units per hour at a cost of Rs. 5 per unit. No power is consumed during maintenance and setting-up time. A chemical required for operating the machine is Rs. 9,880 per annum. Wages of an operator is Rs. 4,000 per month. The operator, devoted one-third of his time to the machine. Annual insurance charges 2 per cent of cost of machine.
\nLight charges for the department is Rs. 2,500 per month, having 48 points in all, out of which only 8 points are used at this machine. Other indirect expenses are chargeable to the machine are Rs. 6,500 per month.<\/p>\n
\n6. (a) Balance Sheet of OP Ltd. as on 31st March, 2007 and 2008 are as follows:
\nLiabilities Amount
\n31.3.2007
\nRs. Amount
\n31.3.2008
\nRs. Assets Amount
\n31.3.2007
\nRs. Amount
\n31.3.2008
\nRs.
\nShare capital
\nGeneral Reserve
\nProfit and Loss A\/c
\n10% Debentures
\nBank Loan (long\u2013term)
\nCreditors
\nOutstanding Expenses
\nProposed Dividend
\nProvision for taxation 20,00,000
\n4,00,000
\n2,50,000
\n10,00,000
\n5,00,000
\n4,00,000
\n20,000
\n3,00,000
\n1,00,000 20,00,000
\n4,50,000
\n3,60,000
\n8,00,000
\n6,00,000
\n5,80,000
\n25,000
\n3,60,000
\n1,20,000 Land and Building
\nPlant and Machinery
\nInvestment
\nStock
\nDebtors
\nPrepaid Expenses
\nCash and Bank 15,00,000
\n18,00,000
\n4,00,000
\n4,80,000
\n6,00,000
\n50,000
\n1,40,000 14,00,000
\n17,50,000
\n3,72,000
\n8,50,000
\n7,98,000
\n40,000
\n85,000
\n49,70,000 52,95,000 49,70,000 52,95,000
\nAdditional informations:<\/p>\n
\n(ii) 10% debentures were redeemed at 20% premium.
\n(iii) Investment were sold for Rs. 45,000, and its profit was transferred to general reserve.
\n(iv) Income\u2013tax paid during the year 2007\u201308 was Rs. 80,000.
\n(v) An interim dividend of Rs. 1,20,000 has been paid during the year 2007\u201308.
\n(vi) Assume the provision for taxation as current liability and proposed dividend as noncurrent liability.
\n(vii) Investment are non-trade investment.
\nYou are required to prepare:
\n(i) Schedule of changes in working capital.
\n(ii) Funds flow statement.
\n12 (0)
\n(b) Explain the following: 4
\n(i) Seed capital assistance. (0)
\n(ii) Bridge finance. (0)
\n7. (a) WX Ltd. has a machine which has been in operation for 3 years. Its remaining estimated useful life is 8 years with no salvage value in the end. Its current market value is Rs. 2,00,000. The company is considering a proposal to purchase a new model of machine to replace the existing machine. The relevant informations are as follows:
\nExisting Machine New Machine
\nCost of machine
\nEstimated life
\nSalvage value
\nAnnual output
\nSelling price per unit
\nAnnual operating hours
\nMaterial cost per unit
\nLabour cost per hour\u2217
\nIndirect cash cost per annum Rs. 3,30,000
\n11 years
\nNil
\n30,000 units
\nRs. 15
\n3,000
\nRs. 4
\nRs. 40
\nRs. 50,000 Rs. 10,00,000
\n8 years
\nRs. 40,000
\n75,000 units
\nRs. 15
\n3,000
\nRs. 4
\nRs. 70
\nRs. 65,000
\nThe company follow the straight line method of depreciation. The corporate tax rate is 30 per cent and WX Ltd. does not make any investment, if it yields less than 12 per cent. Present value of annuity of Re. 1 at 12% rate of discount for 8 years is 4.968. Present value of Re. 1 at 12% rate of discount, received at the end of 8th year is 0.404. Ignore capital gain tax.<\/p>\n
\n(b) Discuss the factors to be taken into consideration while determining the requirement of working capital. 4 (0)
\n8. (a) The following is the capital structure of a Company:
\nSource of capital Book value
\nRs. Market value
\nRs.
\nEquity shares @ Rs. 100 each
\n9 per cent cumulative preference
\nshares @ Rs. 100 each
\n11 per cent debentures
\nRetained earnings 80,00,000<\/p>\n
\n60,00,000
\n40,00,000 1,60,00,000<\/p>\n
\n66,00,000
\n\u2014
\n2,00,00,000 2,50,00,000
\nThe current market price of the company\u2019s equity share is Rs. 200. For the last year the company had paid equity dividend at 25 per cent and its dividend is likely to grow 5 per cent every year. The corporate tax rate is 30 per cent and shareholders personal income tax rate is 20 per cent.<\/p>\n
\n(i)
\n(ii)
\n(iii) Cost of capital for each source of capital.
\nWeighted average cost of capital on the basis of book value weights.
\nWeighted average cost of capital on the basis of market value weights.
\n7 (0)
\n(b) Annual sales of a company is Rs. 60,00,000. Sales to variable cost ratio is 150 per cent and Fixed cost other than interest is Rs. 5,00,000 per annum. Company has 11 per cent debentures of Rs. 30,00,000.
\nYou are required to calculate the operating, Financial and combined leverage of the company. 3 (0)
\n(c) What is “Internal Rate of Return”? State its acceptance rule. 2 (0)
\n9. (a) A publishing house purchases 72,000 rims of a special type paper per annum at cost Rs. 90 per rim. Ordering cost per order is Rs. 500 and the carrying cost is 5 per cent per year of the inventory cost. Normal lead time is 20 days and safety stock is NIL. Assume 300 working days in a year:
\nYou are required:
\n(i) Calculate the Economic Order Quantity (E.O.Q).
\n(ii) Calculate the Reorder Inventory Level.
\n(iii) If a 1 per cent quantity discount is offered by the supplier for purchases in lots of 18,000 rims or more, should the publishing house accept the proposal?
\n8 (0)
\n(b) What is Capital rationing? Describe various ways of implementing it. 4 (0)<\/p>\n","protected":false},"excerpt":{"rendered":"