M.Com. (Semester II) (CBCS) Examination Mar/Apr-2018
ADVANCED COSTING (Paper
Time: 2½ Hours
Max. Marks: 70
Instructions: All questions are compulsory. All Questions carry equal marks. Use of calculator is allowed.
Q.1
Fill in the blanks.
14
Individual products, each of a significant sales value, produced simultaneously from the same raw material, should be known as
By-products
Joint products
Co-products
Main products
The stage production at which joint products and by products are identified is known as
Breakeven point
Split off point
Dead end point
Starting point
process loss does not affect the cost per unit.
Abnormal
Normal
Standard
Seasonal
100 units were introduced in a process in which normal loss is 15 units and actual output is 90 units, then there is
Abnormal gain of 5 units
Abnormal loss of 5 units
Abnormal gain of 15 units
Abnormal loss of 15 units
is that portion of basic raw material lost in processing, having no recovery value.
Spoilage
Waste
Scrap
Salvage
Sale proceeds from abnormal process loss are credited to account.
Normal loss
Cash
Abnormal loss
Profit and loss
When profit is 25% on cost, it is on sale.
33.33
15
20
16.67
In hospitals cost unit is
Per doctor day
Per patient day
Per disease
Per medicine
Cost variance is the difference between the standard cost and cost.
Marginal
Budgeted
Actual
Fixed
10) If material mix variance is 100F, material yield variance is 150UF, and material price variance is 50F then material cost variance is
100F
100 UF
Nil
50F
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SLR-CX-15
11) is a contract in which the price of the contract is ascertained by adding a percentage margin of profit to the cost of contract.
Cost and profit
Cost plus profit
Costing profit and loss
Escalation
12) When 60% of the contract price is certified work in progress, the profit to be credited to profit and loss account will be equal to X Notional profit X (cash received work certified)
1/3
2/3
3/1
3/2
13) is the size of the batch of production where total cost is minimum.
Job Qty
Economic batch Qty
Std Qty
Budgeted Qty
14) is an index of efficiency showing the effectiveness of the factors used in production.
Profitability
Productivity
Flexibility
Liquidity
Q.2
Write short notes on:
14
Measurement of productivity
Difference between job costing and process costing.
Q.3
During the period actual mix differs from standard mix, but there is no change in output.
Standard Mix
Actual Mix
Material A
60 kg Rs 20
55 kg Rs 21
Material B
40 kg Rs 10
45 kg Rs 11
Calculate material cost, price and usage variance.
Annual usage in units of a component 4000

Set up and order processing cost Rs. 50
Annual rate of interest 10%
Cost of manufacturing per unit Rs. 100
You are required to calculate Economic Batch size.
Q.4
The following information has been obtained from the records of a manufacturing company using standard costing system.
14
Standard
Actual
Production units
4,000
3,800
Working days in a month
20
21
Hours in a month
8000
8820
Overheads Rs.
52,000
51,000
You are required to calculate all overheads variances.
OR
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SLR-CX-15
A product of a company passes through three different processes. Prepare Process Accounts from the following information.
Total
Process I
Process II
Process III
Sundry Materials
16,964
4,000
6,040
6,924
Wages
24,000
6,000
8,000
10,000
Direct Exps.
14,520
10,000
4,520

Production Overheads
12,000
Output (in Units)
920
870
800
Normal Loss (in
10%

10%
Value of Scrap (Rs. Per Unit)
3
5
6
1000 units at Rs. 10 per unit were introduced to Process I. Production overheads are recovered as 50% of wages.
There was no opening and closing stock in any process.
Q.5
Hitesh owns fleet of taxi and the following informations are available from the records maintained by him:
14
Number of Taxis
10
Garage rent
Rs. 600 p.m.
Cost of each Taxi
Rs. 20,000
Insurance premium
p.a.
Salary of manager
Rs.600 p.m.
Annual tax
Rs. 600 per taxi
Salary of accountant
Rs.500 p.m.
Drivers salary
Rs.200 p.m. per taxi
Salary of cleaner
Rs.200 p.m.
Annual repair
Rs.1000 per taxi
Salary of mechanic
Rs.400 p.m.
Total life of a taxi is about 2,00,000 kms. A taxi runs in all 3,000 kms. in a month of which 30% it runs empty. Petrol consumption in 1 litre for 10 kms. Rs. 1.80 per liter. Oil and other sundries are Rs.5.00 per 100 kms.
Calculate the cost of running a taxi per km.
OR
A contractor prepares his accounts for the year ending 31st December each year; he commenced a contract on 1.4.2014.
The following information relates to the contract as on 31.12.2014.
Material
Rs. 1,25,500
Labour charges
Rs. 2,82,800
Salary to foremen
Rs. 40,650
Machine purchased
Rs. 1,30,000
A supervisor, who is paid Rs. 4,000 per month has devoted one-half of his time to this contract. The machine used for 146 days on this contract. The life of the machine is 7 years with scrap value of Rs. 7,500. All other expenses and administration charges amount Rs. 68,250. Material in hand and at site cost of Rs. 17,700 on 31.12.2014 The contract price is Rs. 10,00,000 on 31.12.2014, 2/3 of the contract was completed. The Architect issued certificate covering 50% of the contract price and the contractor had been paid Rs. 3,75,000 on account. Prepare contract account and show how much profit or loss should be included in financial accounts on 31st December 2014.