2012
COST ACCOUNTING
Full Marks: 80
Time: 3 hours
(The figures in the margin indicate
full marks for the questions)
1. Answer as directed:
1x10=10
1)
Which of the following is correct
statement?
a)
Cost accounting is needed by a
non-profit organisation such as a hospital.
b)
Cost Accounting provides
information for ascertaining financial position of a company.
c)
All limited companies registered
under the Companies Act, 1956 must maintain cost accounts records.
d)
Cost Accounting is not required if
the price is beyond the control of the firm.
2)
Cost Accounting provides all of the
following information except _______. [Fill in the gap from the following
options:]
3)
Which of the following is correct
statement?
a)
Cost Accounting helps in
ascertaining accounting profit for income tax purpose.
b)
Cost Accounting provides
information to all those who are internal and external to the firm.
c)
Costing and Cost Accounting are not
the same term.
d)
Cost Accounting helps management in
earning extra profit.
4)
Write the meaning of ‘Purchase
requisition’.
5)
What is ‘Codification of
Materials’?
6)
Just in time (JIT) approach is
applied in which of the following cases?
c)
Cost Sheet preparation.
7)
Which of the following statement is
correct?
a)
Abnormal idle time wages are
included in the cost of production.
b)
Total labour cost can be reduced by
recruiting cheap labour.
c)
Fringe benefits are labour related
costs.
d)
Premium bonus plans do not induce
workers to increase efficiency.
8)
Define the term ‘Labour Turnover’.
9)
The time for which the employer
plays, but from which he obtains no production, is called:
[Select the correct option]
10)
Give the definition of “Overhead
absorption” as used in costing.
2. Answer the following very
briefly:
5x2=10
1)
Write any two distinguishing
features of cost unit and cost centre.
2)
Explain the meaning of Perpetual
Inventory system.
3)
Mention the treatment of
a)
Research and development expenses
and
b)
Interest on capital in Cost
Accounting.
4)
Mention the justification for
applying direct labour hour rate and machine hour rate for absorption of
overheads.
5)
Mention the difference between
overhead absorption and overhead apportionment.
3. Answer either (a) and (b) or
(c):
(a) Calculate the gross wages
received by Govinda from the following data for the week August 1 to 7:
|
Wages rate per hours Units produced in week Standard time allotted Actual time taken |
Rs. 4.00 300 units 60 hours 48 hours |
Apply Rowan Premium Bonus
Plan.
5
(b) Explain the meaning of ‘Time
and Motion Study’ stating its benefits to the management. 5
Or
(c) Write critical notes on:
1)
Work study and method study.
2)
Measurement of labour turnover and
its effect.
5x2=10
4. (a) Briefly describe the
procedure of material purchase.
5
Or
Briefly describe the stores
function of a large factory.
5
(b) A consignment of chemical X was
received by Sharma Factory. The invoice reveals the following data:
|
Quantity Rate per kg Sales Tax (VAT) Freight |
4,000 kg Rs. 2.50 Rs. 816 Rs. 384 |
After receiving the consignment it
was noticed that there is a shortage of 200 kg. What stock rate would you adopt
for the chemical assuming a provision of 5% towards further
deterioration? 5
(c) Explain the treatment of
under-absorption of overheads.
5
Or
Explain briefly the factors to be
kept in view while selecting a particular method suitable for overhead
absorption. 5
(d) Briefly describe the procedure
of calculating profit on incomplete contract.
5
Or
Mention the treatment of normal and
abnormal losses in process costing.
5. (a) The following particulars
have been obtained from the cost records of Shantaram Factory for the year
2011.
|
Rs. |
|
|
Materials used: In manufacturing In primary packing In selling the
product In the factory
office In the administrative
office Productive wages Chargeable expenses Factory supervision
and expenses Administrative
expenses Freight on material
purchased Depreciation on: Factory building
and machines Office building Delivery Van Selling Expenses Publicity Bad debt |
1,10,000 20,000 5,000 1,500 2,000 40,000 10,000 5,000 25,000 3,000 3,000 2,000 1,000 8,000 2,000 1,000 |
You are required to prepare a cost
sheet assuming 1,000 units were manufactured and the selling price per unit is
Rs. 300.00. Show also cost per unit. 10
Or
“Costing techniques represent the
principles or bases which govern the cost computations.” Explain the statement
highlighting the application of these techniques in cost computation.
(b) The following are the summary
of transactions obtained from the costing records of Nabaratna Company.
|
Rs. |
|
|
Direct wages (cash) Indirect wages
(cash) Purchases (cash) Purchases (credit) Stores issued
against production order Works expenses
(cash) Works expenses
allocated to jobs Administration
expenses Administration
expenses allocated to jobs Finished goods
transferred to warehouse |
50,000 30,000 20,000 3,00,000 2,80,000 50,000 80,000 40,000 48,000 4,50,000 |
You are required to Journalize the
above transactions under integral accounting
system. 10
Or
Briefly describe the need for
procedure for integration of cost and financial accounts.
10
(c) A product passes through two
processes: Process A and Process B.
Normal wastages are: 5% in Process
A and 10% in Process B.
|
Scrap value: (Per Unit) |
Rs. 0.20 for Process A Rs. 0.30 for Process B |
Other details:
|
Process A Rs. |
Process B Rs. |
|
|
Materials Direct wages Manufacturing expenses |
12,000 14,000 4,000 |
6,000 8,000 6,000 |
7,500 units of raw materials were
introduced into Process A at a cost of Rs. 15,000. The outputs were: Process A:
7,000 units. Process B: 6,200 units.
You are required to prepare Process
Accounts. 10
Or
From the information furnished
below, prepare the Contract Account showing the cost and tender
price. 10
|
Rs. |
|
|
Direct material
cost Direct labour cost Direct expenses Works overhead Office overhead Profit margin |
60,000 42,000 5,000 40% of direct wages 5% of works cost 20% of tender price |
-000-