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Gauhati University B.Com 4th Sem.
Cost Accounting Solved Paper 2023
COMMERCE (Honours Core/Regular)
Paper:COM-HC-4016/COM-RC-4026
(Cost Accounting)
Full Marks: 80
Time: Three hours
The figures in the margin indicate full marks for the questions.
1. Answer the following as directed: 1x10=10
(a) Cost accounting is a method of measuring cost.
(Fill in the blank with appropriate word)
(b) A Sunk cost is an irrecoverable cost.
(Fill in the blank with appropriate word)
Explanation:- Sunk cost is a cost which has already been spent during the course of business and is not recoverable. Rent is an example of sunk cost.
(c) Indirect labour is treated as part of
(i) finished goods
(ii) work-in-progress
(iii) factory overhead
(iv) product
(Select the correct answer)
(d) Material is the first element of cost.
(State whether the statement is true or False)
Answer: The statement is True.
(e) First -in-first-out (FIFO) Method of valuing material issues is suitable in the times of falling prices. (Fill in the blank with appropriate word)
(f) Bin card is a part of the accounting record.
(State whether the statement is true or false)
Answer: Yes, that's True. A bin card is indeed a part of accounting records, specifically used in inventory management to track the quantity of items in a storage location.
(g) Which of the following is not a part of time-keeping?
(i) Punch card
(ii) Job card
(ii) Attendance register
(iv) None of the above
(Select the correct answer)
(h) Depreciation is a semi-variable expense.
(State whether the statement is true or false)
Answer: The statement is false.
(i) What is process costing ?
Answer: Process costing is a method of costing that assigns costs to products or services based on the processes they go through. It is suitable for mass production of homogeneous products or services.
(j) Write the meaning of 'relevant cost' in cost accounting.
Answer: Relevant cost in cost accounting is the cost that is relevant for a specific decision or alternative. It is the future cost that will change as a result of the decision.
2. Answer the following questions : 2x5=10
(a) What is the concept of cost ?
Answer: The concept of cost is the amount of money or resources that are required to produce or acquire something. Cost can be classified into different types, such as fixed, variable, direct, indirect, operating, etc
(b) State the meaning of motion study in labour costing.
Answer: Download PDF for Complete Solution.
(c) State two important features of p process costing.
Answer: Download PDF for Complete Solution.
(d) What is operating costing ?
Answer: Download PDF for Complete Solution.
(e) Name from the following the method of costing and cost unit for:
(i) Aircraft
Answer: Download PDF for Complete Solution.
(ii) Transport
Answer: Download PDF for Complete Solution.
3. Answer any four of the following questions: 5×4=20
(a) Mention five objectives of cost accounting.
Answer: Download PDF for Complete Solution.
(b) A consignment of sugar was received by Murli Brothers. The invoice reveals the following data:
Quantity 600 kg
Rate per kg 25
GST @12%
Freight 22,130
After receiving the consignment, it was noticed that there is a shortage of 300kgs. What stock rate would you adopt for the product assuming a provision of 5% towards further deterioration ?
(c) What is 'payment by result' method of labour remuneration?
Mention two advantages and two disadvantages of this system. 1+(2+2)=5
Answer: Download PDF for Complete Solution.
(d) The following data pertain to a material ''
Supply period : 4 to 8 months
Consumption Rate :
Maximum : 1200 units per month
Minimum : 600 units per month:
Normal : 900 units per month
Yearly : 110800 units
Storage costs are 50% of stock value
Ordering costs are 2400 per order
Price per unit of material ₹ 100
Compute the minimum stock level.
(e) Explain the five reasons of abnormal idle time of labour cost.
Answer: Download PDF for Complete Solution.
(f) How is abnormal gain calculated and treated in process costing ? 2+3=5
Answer: Download PDF for Complete Solution.
4. Answer any four of the following questions: 10×4=40
(a) What are the various costs classified under functional classification'? Give a brief description of each of these costs.
Answer:
(b) Assam Manufacturing Company uses copper wire which is purchased from the market as and when necessary.
Following purchases and issues were made during the month of January, 2023:
January 1 : Opening balance 300 kgs at₹50 / kg
January 3 : Purchased 500 kgs at 252/kg
January 7 : Issued 220 kgs
January 11 : Issued 440kgs
January 18: Purchased 490 kgs at 246/kg
January 24 : Issued 300kgs
January 28 : Surplus 20 kgs returned to store out of quantity issued on 7th January
(c) During the first week of January 2023, the workman Mr. Santosh produces 150 articles. He received wages for a guaranteed 48 hours a week @50 per hour. The estimated time to produce one article is 20 minutes and under incentive scheme the allowed is increased by 20%.
Calculate his gross wages according to-
(i) Piece works with guaranteed weekly wages;
(ii) Rowan premium bonus plan;
(iii) Halsey premium bonus plan.
(d) Explain 'under-absorption' and 'over- absorption of overheads. What are the causes for under and over-absorption of overheads? (2+2)+6=10
(e) A firm of building contractors began to trade on 1st April, 2022.
Following was the expenditure on a contract for Rs. 9,00,000.
Material (HR) 1,44,000
Plant issued 30,000
Wages incurred 1,48,000
Other expenses incurred 30,000
Cash received on account of 31st March, 2023 amounted to 4,00,000; being 80% of the work certified. Of the Plant and Materials charged to contract, Plant which cost 6,000 and Materials which cost 5,000 were lost. On 31st March, 2023 Plant cost 4,000 was returned to stores, the cost of work done but uncertified was 20,000 and materials costing 24,600 were in hand on site.
Charge 15% depreciation on plant and prepare Contract Account.
Solution:
Contract Account for the year ending 31st March, 2023
Note: The depreciation on plant is calculated as 15% of (30,000 - 6,000 - 4,000) = 3,600. The work certified is calculated as 80% of 5,00,000 = 4,00,000. The work uncertified is given as 20,000. The notional profit is calculated as 20% of (5,00,000 + 20,000) = 80,000. The profit transferred to P/L is calculated as 80% of 1,25,000 = 1,00,000. The work-in-progress is calculated as the balance of the contract account.
(f) Briefly describe the need for and procedure for integration of Cost Accounting and Financial Accounting. 5+5=10
Answer: Download PDF for Complete Solution.
(i) What is allocation and apportionment of overheads?
Answer: Download PDF for Complete Solution.
(ii) A company has four departments. The actual cost for the period are given below. Apportion the cost to the various departments by using the most equitable method- 2+8=10
Rent : 5,000
Depreciation : 4,800
Supervision : 9,000
Employer's Liability Insurance : 900
Insurance : 3,000
The following data are also available in respect of four departments;
Solution: Download PDF...
(h) A manufacturing company disclosed a net loss of ₹ 2,91,000 as per their cost accounts for the year ended on March 31st, 2023. The following information was revealed as a result of scrutiny of the figures of both the sets of books.
Factory overhead over absorbed : 8,000
Administrative overhead under absorbed : 12,000
Depreciation charged in financial accounts : 1,10,000
Depreciation charged in cost accounts : 1,22,000
Income tax provided : 75,000
Interest on loans fund in financial accounts : 1,34,000
Interest on investments not included in cost accounts : 32,000
Transfer fees (Credit financial books) : 8,000
Stores adjustment (Credit in financial books) : 24,000
Prepare a Reconciliation Statement from the above information.
Solution:
Reconciliation Statement, as on March 31st, 2023.
-0000000-