Costing Regular Previous Year Question Paper Year 2005 : IIIrd Year Part I

Q. 1. Explain the following:
(1) Cost centre;
(2) Features of Job Costing;
(3) Fixed and Variable Costs;
(4) Direct and Indirect Expenses.
Answer :

Q. 2. (a) What do you mean by normal and abnormal idle time ? How would you deal idle time in Cost Accounting ? 10

(b) From the following information prepare Store Ledger Account as per LIFO and FIFO method: 10

Jan.1-2003 – Received – l,000Units – @Re.lperunit
Jan. 10-2003 – Received – 260 Units – @ Rs. 1.05 per unit
Jan. 20- 2003 – Issued – 700 Units-
Jan. 21-2003 – Received – 400 Units – @Rs. 1.15 per unit
Jan. 22-2003 – Received – 300 Units – @ Rs. 1.25 per unit
Jan. 23- 2003 – Issued – 620 Units-
Jan. 24-2003 – Issued – 240 Units-
Jan. 25-2003 – Received – 500 Units – @ Rs. 1.10 per unit
Jan. 26-2003 – Issued – 380 Units
Answer :

Q. 3. (a) What do you mean by Inventory Control ? What are its techniques ? Discuss briefly ABC system of Inventory Control. 10

(b) Calculate machine hour rate from the following information : Wages of operator incharge of two machines Rs. 6,000 per year.
Rent and rates for 4 machines Rs. 3,000 per year.
Lighting Rs. 250 per month.
Insurance of machines Rs. 200 per quarter.
Repair Rs. 250 per month.
Supervisor’s salary Rs. 500 per month.
Power consumption of machine: 20 units per hour @Rs. 1 per 100 units.
Factory overhead for the shop: Rs. 4,000 per year.
Machine cost Rs. 90,000
Scrap value: 5% of purchase price.
Life of the machine 19 yea rs.
Machine runs for 1,500 hours per annum.
Answer :

Q. 4. (a) From the following data, calculate Break-even point in Units. What will be the BEP if selling price is reduced by 10% ?
Fixed expenses:
Depreciation – Rs. 1,00,000
Salaries – Rs. 1,00,000

Variable exp. :
Material – Rs. 3 per unit
Labour – Rs. 2 per unit
Selling price – Rs. 10 per unit

(b) From the following information, reconcile the profit as per cost accounts with financial accounts:
Cost A/c Rs Financial A/c Rs

Profit – 86,250

Opening Stock:
Material – 10,500 – 10,300
Work-in-progress – 8,500 – 8,000

Closing Stock:
Material – 14,200 – 15,000
Work-in-progress – 6,000 – 5,600

Dividend and interest received Rs. 600. Loss on sale of investment Rs. 1,000. Interest charged by the bank not considered in Financial Accounts and Cost Accounts Rs. 1,500. Goodwill written off during the’year Rs. 2,500. Preliminary expenses written off Rs. 3,000.
Overhead incurred Rs. 40,000. Overhead absorbed in Cost Accounts Rs. 38,500. Find out profit as per Financial Accounts. Answer :

Q. 5. (a) Define normal loss, abnormal loss and abnormal gain. How these are treated in Cost Accounts ? 10

(b) What do you mean by labour turnover ? How is it measured ? What measures would you suggest for reducing labour turnover ?
Answer :

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