Cost Accounting Solved Question Paper 2024 [Gauhati University BCom 4th Sem. CBCS]

Are you a B.Com 4th Semester student under Gauhati University looking for the 2024 Cost Accounting Solved Question Paper? You’ve landed at the right place! Cost Accounting is a core subject in the 4th semester curriculum, and solving previous year question papers is one of the smartest ways to prepare effectively for exams.

In this blog post, we bring you the official 2024 Cost Accounting question paper along with detailed, student-friendly solutions. These solved answers are prepared as per the latest syllabus and question trends of Gauhati University, making them extremely useful for your last-minute revision, self-study, and scoring high marks.

Whether you are confused about concepts like Machine Hour Rate, Labour Cost Control, or Overhead Classification, or just want to understand the answer writing pattern, this solved paper will help you boost your confidence and performance.

GU Cost Accounting Solved Question Paper 2024

2024  COMMERCE
(Honours Core/Regular)
Paper: COM-HC-4016/COM-RC-4026
BCom 4th Semester (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: (1 × 10 = 10 marks)

(a) Cost accounting is a tool used by management for________. (Fill in the blank with appropriate word)
Answer: decision-making

(b) Aggregate of direct costs is referred to as _______ cost. (Fill in the blank with appropriate word)
Answer: prime

(c) The difference between attendance time and work time is known as _______ (Fill in the blank with appropriate word)
Answer: idle time

(d) Abnormal loss of material is charged to costing Profit and Loss Account. (State whether the statement is true or false)
Answer: True

(e) Idle time arises only when workers are paid on_______basis of wages payments. (Fill in the blank with appropriate word)
Answer: time

(f) Variable cost per unit remains constant. (State whether the statement is true or false)
Answer: True

(g) Contract costing is also known as
(i) process costing
(ii) terminal costing
(iii) job costing
(iv) batch costing
(Select the correct answer)
Answer: (ii) terminal costing

(h) In job costing, the cost of an incomplete job is termed as_____.(Fill in the blank with appropriate word)
Answer: work-in-progress

(i) Overtime work is to be paid for at_____ the normal rate. (Fill in the blank with appropriate word)
Answer: extra or double (commonly "double" is accepted)

(g) The method of costing used in a factory manufacturing similar products in large quantities is
(i) process costing
(ii) terminal costing
(iii) job costing
(iv) batch costing
(Select the correct answer)
Answer: (i) process costing

(j) What is notional profit?
Answer: Notional profit is the difference between the value of work done and the total cost of work done on a contract. It is a temporary profit shown before the contract is completed.

2. Answer the following questions: (2 × 5 = 10 marks)

(a) What is unit cost?
Answer: Unit cost means the cost of producing one single item or unit of product.

(b) Write two benefits of time and motion study.
Answer:

1. It helps to fix the best method of doing a job.

2. It saves time and increases efficiency of workers.

(c) What is meant by semi-variable overhead?
Answer: Semi-variable overhead is a cost which has both fixed and variable parts. It partly changes with production and partly stays the same.

(d) Write two features of contract costing.
Answer:

1. It is used for large and long-term projects like buildings or roads.

2. Each contract is treated as a separate job.

(e) State the meaning of overtime.
Answer: Overtime means extra hours worked by workers beyond normal working hours. It is usually paid at a higher rate.

3. Answer any four of the following questions: (5 × 4 = 20 marks)

(a) Mention five benefits of cost accounting.
Answer:  Cost accounting is a system used by businesses to record, analyze, and control the costs of producing goods or services. It helps management to make better decisions and improve the efficiency and profitability of the business.

The Following are the five benefits of Cost Accounting:-

1. Helps in Cost Control:  Cost accounting helps to find out the actual cost of products and services. It shows where money is being spent and helps to reduce unnecessary costs.

2. Fixing Selling Price:  It helps in deciding the correct selling price of a product by providing accurate cost data. This ensures that the business earns profit while staying competitive.

3. Improves Efficiency:  By analyzing the use of materials, labour, and machines, cost accounting helps to reduce waste and improve overall productivity.

4. Helps in Decision Making:  Cost accounting provides useful data to the management which helps in making decisions like choosing between different products, methods, or markets.

5. Profitability Analysis:  It helps in comparing the profit earned from different products, services, or departments. This allows the business to focus more on the profitable areas.

(b) From the following information, prepare a cost sheet showing cost per unit and profit for the month of January, 2024:

• Raw materials consumed: ₹ 80,000

• Direct wages: ₹ 48,000

• Machine hour worked: 8,000 hours

• Machine hour rate: ₹ 4 per hour

• Office overhead: 10% of works cost

• Selling overhead per unit: ₹ 1.5

• Units produced: 4,000 units

• Units sold: 3,600 units @ ₹ 50 each

(c) Following information, relating to a type of raw material, is available:

• Annual demand: 6,400 units

• Unit cost: ₹ 6

• Carrying cost: 25% of unit cost

• Procurement cost: ₹ 75 per order

Calculate EOQ and number of orders per annum.

Solution: Download PDF For Practical Solutions 

(d) Explain briefly the needs of labour cost control.
Answer:  Labour cost control means managing and reducing the costs related to workers’ wages while increasing their efficiency and productivity. It helps the business save money and improve performance.

The Following are five Needs for labour cost control:

1. To Reduce Wastage of Time:  It helps in reducing idle time and ensures that workers use their time effectively.

2. To Increase Productivity:  Labour cost control encourages better work performance, leading to more output in less time.
   
   

3. To Avoid Excess Payment:  It prevents overpayment by checking attendance, overtime, and proper wage calculation.
   
   

4. To Fix Standard Labour Cost:  It helps to fix standard labour costs for each job or product, which helps in planning and budgeting.

5. To Improve Efficiency:  Labour cost control encourages training, supervision, and motivation, which leads to better work quality.

(e) Write five features of overhead cost.
Answer:  Overhead cost refers to all indirect costs of production or running a business that cannot be directly linked to a specific product or job, like rent, electricity, or office salaries.

Following are the five features of overhead cost:

1. Indirect in Nature: Overheads cannot be directly traced to a single unit of product or job.

2. Grouped into Categories:  They are divided into factory overhead, office overhead, and selling & distribution overhead.

3. Fixed, Variable, or Semi-variable:  Overhead costs may remain the same, change with output, or have both fixed and variable parts.

4. Need for Allocation and Apportionment:  Overheads are distributed among different departments or jobs using suitable methods.

5. Not Part of Prime Cost:  Unlike direct material and direct labour, overheads are included in total cost but not in prime cost.

(f) Write five differences between job costing and contract costing.
Answer:  Job costing is used for small, customized jobs, while contract costing is used for large-scale, long-term projects like construction.

The Following are five key differences:

Point of Difference	Job Costing	Contract Costing
1. Size of Work	Small jobs	Large contracts
2. Location	Done in factory or workshop	Done at the contract site
3. Time Duration	Short-term, completed quickly	Long-term, may take months or years
4. Cost Recording	Costs are recorded for each job separately	Costs are recorded for each contract separately
5. Payment	Payment is usually received after job completion	Payments are received in parts as work progresses

4. Answer any four of the following questions: (10 × 4 = 40 marks)

(a) Explain the factors to be considered for installation of a costing system.

Answer:  Installing a costing system in an organisation is an important step to control and manage the cost of operations. A good costing system provides useful information to the management for planning, controlling, and decision-making. While installing a costing system, the following factors must be considered:

1. Nature and Size of the Business:  The costing system should match the nature (manufacturing, trading, or service) and size (small, medium, or large) of the business.

2. Types of Products or Services:  The number and variety of products or services the business offers will affect the method of costing to be used, such as job costing, process costing, or batch costing.

3. Organisational Structure:  The system should fit into the existing organisation structure and should clearly define responsibilities and reporting systems.

4. Methods of Production:  The production process (continuous, job-based, or project-based) must be studied to design a suitable costing system.

5. Availability of Resources:  The availability of skilled staff, time, and funds for setting up and running the costing system must be considered.

6. Need for Cost Information:  The level and detail of cost information required by the management will affect the complexity of the system.

7. Level of Automation and Technology:  If the business uses modern tools and software, the costing system should be compatible and easy to integrate.

8. Legal and Tax Requirements:  The system should help in meeting government reporting and tax rules, especially for industries where cost audit is compulsory.

9. Flexibility and Simplicity:  The system should be flexible to adjust with changing needs and simple enough to be understood and used by the staff.

10. Cost-Benefit Analysis:  The cost of installing and maintaining the system should be justified by the benefits it provides to the organisation.

(b) Explain 'maximum level', 'minimum level', and 're-ordering level' of materials stock maintained in an organisation.

Answer:  In a business, especially in manufacturing, it is important to maintain proper levels of stock to avoid shortage or overstocking. The following three stock levels are used for control:

1. Maximum Level:

1. Meaning: It is the highest quantity of material that should be kept in store.

2. Purpose: To avoid overstocking, wastage, theft, and extra storage cost.

3. Factors Considered: Storage space, risk of damage or obsolescence, cost of carrying inventory, and future demand.

2. Minimum Level:

1. Meaning: It is the lowest quantity of material that must be kept in stock at all times.

2. Purpose: To avoid complete stock-out and stop in production.

3. Factors Considered: Rate of usage, lead time (time taken for delivery), and risk of delay from suppliers.

3. Re-ordering Level (or Re-order Level):

1. Meaning: It is the level of stock at which a new order for materials should be placed.

2. Purpose: To ensure that new stock arrives before the current stock reaches the minimum level.

3. Formula:
   Re-order level = Maximum usage × Maximum lead time

4. Factors Considered: Usage rate, lead time, and reliability of suppliers.

By maintaining these stock levels properly, an organisation ensures smooth production, avoids extra cost, and uses its resources efficiently.

(c) North-East Manufacturing Company uses rubber, which is purchased according to requirement, from the market. Following purchases and issues were made during the month of March, 2024:

• March 1: Opening stock 2,000 kg @ ₹ 5 each

• March 3: Issued 1,500 kg

• March 4: Purchased 4,500 kg @ ₹ 6 each

• March 7: Issued 1,600 kg

• March 8: Return by production department 100 kg (Issued on March 3)

• March 15: Purchased 2,400 units @ ₹ 6.50 each

• March 18: Return to supplier 200 units (Purchased on March 4)

• March 24: Purchased 1,000 units @ ₹ 7 each

• March 26: Issued 2,100 units

• March 27: Purchased 1,200 units @ ₹ 7.50 each

• March 31: Issued 2,800 units

From the above information, prepare Storage Ledger by applying FIFO method.

Solution: Download PDF For Practical Solutions 

(d) What is meant by labour turnover? What would be possible effects of labour turnover on the cost of production? (2 + 8 = 10 marks)

Answer: Labour turnover refers to the rate at which employees leave and are replaced in an organisation during a certain period. It shows how frequently workers join and leave a company.

It is usually expressed as a percentage and calculated using the formula:

Labour Turnover (%) = (No. of employees left or replaced during the period / Average number of employees) × 100

Effects of Labour Turnover on Cost of Production (8 marks):

1. Increased Recruitment and Training Costs:  When old workers leave, new workers must be hired and trained. This adds to recruitment and training expenses.

2. Loss of Efficiency and Productivity:  New workers take time to learn the job, and during this period, production may slow down or become less efficient.

3. Higher Scrap and Defective Output:  Inexperienced workers are more likely to make mistakes, which can lead to defective goods or wastage of materials.

4. Increased Supervision Costs:  New employees often require more attention and supervision, which increases labour supervision costs.

5. Disruption in Production:  Frequent changes in the workforce can disturb the smooth flow of work, leading to delays and lower output.

6. Loss of Skilled Workers:  When experienced workers leave, the company may lose valuable skills and knowledge, which are not easily replaced.

7. Low Morale Among Workers:  High labour turnover can create job insecurity and dissatisfaction among the remaining employees, affecting their performance.

8. Increased Overhead Costs per Unit:  When output decreases due to inefficient labour, fixed costs like rent and salaries are spread over fewer units, increasing the cost per unit.

Conclusion:  Labour turnover is a serious issue for any organisation. If not controlled, it increases the overall cost of production and reduces the quality and efficiency of work. Therefore, businesses should try to reduce labour turnover by creating a healthy work environment, offering fair wages, and keeping employees satisfied.

(e) Following are the information related to earning of a worker for a week: (2+4+4=10)

• Weekly working time 48 hours

• Hourly wage rate 7.50

• Rate per unit ₹3-00

• Normal time taken per unit 24 minutes

• Normal output per week 120 units

• Actual output per week 150 units

Calculate the earning of the worker for a week under:-

(i)straight price rate

(ii) Halsay premium scheme

(iii)Rowan premium scheme 

Solution: Download PDF For Practical Solutions 

(f) What is meant by machine hour rate? Mention the steps required to compute machine hour rate. (2 + 8 = 10 marks)

Answer: Machine hour rate is the cost of operating a machine for one hour. It includes all expenses related to running and maintaining the machine, such as depreciation, repairs, power, insurance, and supervision.  It helps to calculate accurate production costs where machines are heavily used.

Formula:  Machine Hour Rate = Total machine-related overheads / Total machine hours

Steps Required to Compute Machine Hour Rate:

1. Identify the Machine or Group of Machines:  Decide whether the rate is to be calculated for one machine or a group of similar machines.

2. Estimate Total Working Hours of the Machine:  Calculate the total number of hours the machine is expected to work during a specific period (e.g., a month or year), after deducting downtime for repairs and maintenance.

3. Classify Expenses into Fixed and Variable Costs:

1. Fixed Costs: Expenses that remain constant, like rent, insurance, and depreciation.

2. Variable Costs: Expenses that vary with machine usage, like power and lubricants.

4. Calculate Fixed Costs:  Add all fixed expenses related to the machine for the period (e.g., annual depreciation, rent share, insurance, etc.).

5. Calculate Variable Costs:  Add all variable costs based on usage, such as electricity used per hour × total machine hours.
   
   

6. Add Fixed and Variable Costs Together:  Total machine expenses = Fixed Costs + Variable Costs.

7. Divide by Total Machine Hours:  Now divide the total machine expenses by the total machine hours to get the rate per hour.

8. Check and Revise Regularly:  The machine hour rate should be reviewed and updated regularly to reflect any changes in cost or usage.

Conclusion:  The machine hour rate is a useful tool for accurate cost control in industries where machines play a key role in production. It ensures proper allocation of costs and helps in fixing prices and comparing efficiency.

(g) A product passes through two processes. The output of process I becomes the input of process II and the output of process II is transferred to warehouse. The quantity of raw materials introduced into process I is 20,000 kg. The cost and output data for the month of January 2024 are as under:

Particulars	Process I	Process II
Direct materials	₹ 60,000	₹ 40,000
Direct labour	₹ 40,000	₹ 30,000
Production overhead	₹ 39,000	₹ 40,250
Normal loss	8%	5%
Output	18,000 kg	17,400 kg
Loss realisation	₹ 2 per unit	₹ 3 per unit

The company fixes selling price on end product at a margin of 20% on cost. Prepare the Process Account and determine the selling price per unit.

Solution: Download PDF For Practical Solutions 

(h) Following are the summary of transactions obtained from the costing records of Sri Ram India Limited:

Purchase ₹ 2,00,000

Production wages paid ₹70,000

Stock issued to production order ₹80,000

Works expenses charged to production ₹45,000

Finished goods transferred from production orders 2,22,000

Administrative expense charged to production 15,000

Work expenses outstanding 12,100

Work expenses paid ₹25,000

Pass Journal entries for the above transaction under integral system of accounting.

Solution: Download PDF For Practical Solutions 

-00000-

Must Explore: Gauhati University FYUGP NEP BCom 4th Sem Main Page

📌 Final Words

We hope this Gauhati University BCom 4th Semester Cost Accounting Solved Question Paper 2024 helps you in understanding the exam pattern, important topics, and the right way to write answers. Practice these solved questions thoroughly to strengthen your preparation and score better in your upcoming exams.

Remember, smart preparation is just as important as hard work. Solving previous year question papers gives you the confidence to face the real exam with ease.

🔔 Stay Updated with Us on Telegram!

For more solved question papers, notes, syllabus updates, and exam tips, don’t forget to join our official Telegram channel.