Costing External Correspondence Previous Year Question Paper Year 2006 : IIIrd Year Part I

Q. 1. (a) Explain the main differences between Financial Accounting and Cost Accounting.

(b) Define the terms Fixed Costs, Variable Costs and Semi variable Costs and give examples of each one.
Answer :

Q. 2. (a) From the following information prepare Stores Ledger Card under LIFO and FIFO system. Calculate the value of Closing Stock under both the systems:

1968
Jan. 1 Opening Stock – 200 pieces @ Rs. 2.00 each
Jan. 5 Purchases – 100 pieces @ Rs. 2.20 each
Jan. 10 Purchases – .150 pieces @ Rs. 2.40 each
Jan. 20 Purchases – 120 pieces @ Rs. 250 each
Jan. 22Issue – 150 pieces
Jan. 25 Issue – 100 pieces
Jan. 27 Issue – 100 pieces
Jan. 28 Issue – 200 pieces

(b) What are the causes of under/over absorption of overheads ? How will you deal with them in Cost Accounts?
Answer :

Q. 3. (a) From the following data calculate :
(i) P.V. Ratio;
(ii) Profit when sales are Rs. 20,000;
(iii) New Break-even Point if selling price is re¬duced by 20%.

Fixed Expenses – Rs. 4,000
Break-even Point – Rs. 10,000

(b) From the following information you are re¬quired to prepare :
(i) Cost Sheet for Articles X and Y.
(ii) Profit and Loss Account as per financial books.
(iii) Reconciliation between profit as per cost books and as per financial books.
Article X – Article Y
Rs. – Rs.
Material consumed – 36,000 – 48,400
Labour – 63,000 – . 83,600
Rs.
Works overhead (Actual) – 1,42,000
Office expenses (Actual) – 95,700
Number of – Price per
Articles sold – Article
– Rs.
X180 – 1,450
Y220 – 1,600

There was neither opening stock nor any closing stock.

Works overhead are charged 100% on labour and office overhead are charged at 25% on works cost.
Answer :

Q. 4. (a) The product of Company A passes through two processes A and B and then to finished Stock Ac¬count. In each process 5% of the total weight is lost and 10% is scrap which realises from Process A Rs. 80 per tonne and Process B Rs. 200 per tonne respectively.

The following are the figure relating to both the processes :

Process A – Process B
Material (tonnes) – 1,000 – 70
Cost of material per
tonne (Rs.) – 125 – 200
Wages (Rs.) – 28,000 – 10,000
Expenses (Rs.) – 8,000 – 5,250
Output (Tonnes) – 830 – 780

Prepare Process Accounts, Abnormal Loss Account and Abnormal Gain Account.

(b) Define Break-even Point. How can the break even point be computed?
Answer :

Q. 5. (a) What do you understand by Noraml and Abnormal Idle Time? How would you deal with them in Cost Accounts ? 10

(b) What is machine hour rate? What procedure is followed while computing machine hour rate?
Answer :

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