Q1. Cost accounting is becoming more and more relevant in the emerging economic scenario in India’. Comment.
Q2. An efficient system of costing is essential factor for industrial control under modern conditions of business and as such may be regarded as an important part in the efforts of any management to secure business stability’. Elaborate.
Q3. From the following transactions extracted from the books of accounts of a manufacturing concern as on 31 April 2011. Work out a) consumption value of raw material in the month and b) value of closing stock as on 31 April 2011 under the FIFO method of pricing issues:
Q4. From the following information prepare a cost sheet showing cost profit per unit
Direct materials consumed Rs.4, 00,000
Direct labour 40% of direct material cost
Direct expenses 50% of direct labour cost
Factory overheads 25% of prime cost
Office and admin expenses are @ Rs.150 per 10 units produced
Selling & distribution overheads are Rs. 500 per 100 units sold
Opening finished stock 800 units @ Rs.85.50
Closing stock 400 units
Finished goods sold 16,400 units
Profit 1/6th of sales
Q5. Answer any three questions of the following:
a. Explain product cost and period cost with 2 examples of each.
b. What is meant by direct material cost?
c. Find out the cost of raw material purchased from the data given below:
d. Distinguish between costing and cost accounting.
e. Define batch costing. Give examples of industries which adopt batch costing.
Q6. Mosaic Co. Ltd has three production depts A, B & C and two service depts D & E. Info:
Rent Rs. 5000 Indirect wages Rs. 1500
Power Rs.1500 Depreciation of Machinery Rs.10000
General lighting Rs. 600 Sundry expenses Rs. 10000
Prepare a statement showing distribution of overheads to various departments.
Q7. The following information is provided to you:
Selling price per unit Rs. 40
Variable cost Rs. 24
Fixed costs Rs. 6
Profit Rs. 10
Present sales volume is 2000 units
(a) P/V ratio (b) BEP (c) Margin of safety (d) profit at a sales volume of 2500 units (e) sales required to earn a profit of Rs. 26,000
Q8. What are budget and budgetary control? Discuss the advantages and essential for success of budgetary control.
Read the case below and answer the questions given at the end
Coffee Cart Supreme sells hot and iced coffee beverages and small snacks. The following is last month’s income statement.
Particulars Amount $ Amount $
Cost of Beverage & snacks 2000
Cost of napkins, straws etc500
Cost of rent cart500
Employee wages 1000 4000
Pre tax profit 1000
After tax profit 750
Q1. What is the total cost function for Coffee Cart Supreme? What is the tax rate for Coffee Cart Supreme?
Q2. Calculate the amount of sales needed to reach a target after-tax profit of $1,500.
Q3. What was Coffee Cart Supreme’s degree of operating leverage and Coffee Cart Supreme’s margin of safety in revenue last month?
Q1. Which of the following statement measures the financial position of the entity on particular time?
B Balance Sheet
Q2. The Process of cost apportionment is carried out so that—
D Common costs are shared among cost centers
Q3. Direct materials cost is Rs. 80,000. Direct labor cost is Rs. 60,000. Factory overhead is Rs. 90,000. Beginning goods in process were Rs. 15,000. The cost of goods manufactured is Rs. 245,000. What is the cost assigned to the ending goods in process?
D There will be no ending Inventory Solution
Q4. When prices are rising over time, which of the following inventory costing methods will result in the lowest gross margin/profits?
Q5. The main difference between the profit center and investment center is—
Q6. Which of the following is a characteristic of process cost accounting system?
Q7. Which of the following manufacturers is most likely to use a job order cost accounting system?
Q8. Production volume of 1,200 units cost incurred Rs. 10,000 and production volume of 1,400 units cost incurred Rs.20, 000. The variable cost per unit would be?
Q9. Cost accounting concepts include all of the following EXCEPT—
Q10. The main purpose of cost accounting is to—
Q11. Period costs are –
Q12. An organization sold units 4000 and have closing finished goods 3500 units and opening finished goods units were 1000.The quantity of unit produced would be—
Q13. Examples of industries that would use process costing include all of the following EXCEPT
Q14. The components of the prime cost are—
Q15. Opportunity cost is the best example of—
Q16. Fixed cost per unit decreases when-
Q17. Prime cost + Factory overhead cost is—
Q18. Find the value of purchases if Raw material consumed Rs. 90,000; Opening and closing stock of raw material is Rs. 50,000 and 30,000 respectively.
Q19. Annual requirement is 7800 units; consumption per week is 150 units. Unit price Rs 5, order cost Rs 10 per order. Carrying cost Rs 1 per unit and lead time is 3 week, The Economic order quantity would be-
Q20. For which one of the following industry would you recommend a Job Order Costing system?
Q21. ______________ method assumes that the goods received most recently in the stores or produced recently are the first ones to be delivered to the requisitioning department.
Q22. Cost of production report is a PRODUCTION PROCESS REPORT
Q23. Opening work in process inventory can be calculated as under—
Q24. Jan 1; finished goods inventory of Manuel Company was Rs.3, 00,000. During the year Manuel’s cost of goods sold was Rs. 19, 00,000, sales were Rs. 2, 000,000 with a 20% gross profit. Calculate cost assigned to the December 31; finished goods inventory.
Q25. The cost expended in the past that cannot be retrieved on product or service–
Q26. When a manufacturing process requires mostly human labor and there are widely varying wage rates among workers, what is probably the most appropriate basis of applying factory costs to work in process?
Q27. A typical factory overhead cost is—
Q28. Complete the following table—
Q29. The Kennedy Corporation uses Raw Material Z in a manufacturing process.
Information as to balances on hand, purchases and requisitions of Raw Material Z is given below:
Jan. 1 Balance:200 lbs. @ $1.50
08 Received 500 lbs. @ $1.55
18 Issued 100 lbs.
25 Issued 260 lbs.
30 Received 150 lbs. @ $1.60
If a perpetual inventory record of Raw Material Z is maintained on a FIFO basis, it will show a month end inventory of:
Q30. The difference between total revenues and total variable costs is known as—
Q31. Percentage of Margin of Safety can be calculated in which one of the following ways?
Q32. Which of the following represents a CVP equation?
Q33. For which one of the following industry would you recommend a Process Costing system?
Q34. If 120 units produced, 100 units were sold @ Rs. 200 per unit. Variable cost related to production & selling is Rs. 150 per unit and fixed cost is Rs. 5,000. If the management wants to decrease sales price by 10%, what will be the effect of decreasing unit sales price on profitability of company? (Cost & volume profit analysis keep in your mind while solving it)
Q35. If 120 units produced, 100 units were sold @ Rs. 200 per unit. Variable cost related to production & selling is Rs. 150 per unit and fixed cost is Rs. 5,000. If the management wants to increase sales price by 10%, what will be increasing sales profit of company by increasing unit sales price? (Cost & volume profit analysis keep in mind while solving)
Q36. The following is the Corporation’s Income Statement for last month: Particular Rs. Sales 4,000,000 Less: variable expenses 2,800,000 Contribution margin 1,200,000 Liss: fixed expenses 720,000 Net income 480,000 The company has no beginning or ending inventories. A total of 80,000 units were produced and sold last month. (Q.no. 36-39) What is the company’s contribution margin ratio?
Q37. What is the company’s break-even in units?
Q38. How many units would the company have to sell to attain target profits of Rs. 600,000?
Q39. Whatis the company’s margin of safety in Rs?
Q40. Inventory control aims at—
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