Costing Regular Previous Year Question Paper Year 2006 : IIIrd Year Part I

Q. 1. Distinguish between :
(a) Cost unit and Cost centre ;
(b) Reconciliation statement and Reconciliation account;
(c) Variable and Semi-variable cost;
(d) Absorption costing and Marginal costing.
Answer :

Q. 2. (a) What are the assumptions on which mar¬ginal costing technique is based ? 7
(b) Compute machine Hour Rate from the fol¬lowing information :
(i) The machine room will work on 90% capacity throughout the year and that a breakdown of 10% is reasonable.
(ii) There are three days holiday at Deepawali; Two days at Holi and two days at Christmas, exclusive of Sundays. The factory works 8 hrs. a day and 4 hrs. on Saturdays.
(iii) Number of machines (each of same type) 40.
(iv) Expenses per annum:
Rs.
Power – 3,120
Lubricating oil – 66
Light – 640
Repairs to machines – 1,446
Salaries to foreman – 1,200
Depreciation – 785.60
Answer :

Q. 3. (a) Discuss the perpetual inventory system in connection with material control. How is it differ¬ent from periodic inventory system ?

(b) “Evolution of Cost Accountancy is the out¬come of deficiencies in Financial Accounting System.” Discuss the statement.
Answer :

Q. 4. (a) A product passes through three distinct processes A, B and C. The normal loss of units in each process is 5%, 10% and 15% and the same is sold at Rs. 2, Rs. 4, Rs. 5 per unit respectively. Expenses for the month were as follows :

Process
A-B-C
Sundry Materials – 5,200 – 3,960 – 5,924
Wages 4,000 – 6,000 – 8,000
Actual output in units 1,900 – 1,680- 1,500

2000 units @ Rs. 3 per unit were put into Process ‘A’. The total overheads are Rs. 18,000 which are to be re-covered at 100% of wages. Prepare necessary Process ACCount.
7
(b) From the following figures, prepare a recon ciliation statement:
Cost – Financial
Books – Books
Profit – 50,000 – ?
Marketing overheads – 8,000 – 8,000
Provision for bad debts — 5,000
Factory overheads 8,500 – 7,000
Director’s fees — 2,000
Income Tax paid — 15,000
Rent of owned Premises – 6,000 —
Depreciation – 11,250 – 12,000
Share transfer fee (Cr.) — 1,000
Administrative overheads – 5,000 – 8,000
Answer :

Q. 5. Write short notes on any three of the following:
(a) Labour turnover rate;
(b) Abnormal gains;
(c) A.B.C. Analysis;
(d) Items excluded from Cost Accounts;
(e) Break-even point.
Answer :

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