M.Com. (Semester II) (CBCS) Examination Mar/Apr-2018
ADVANCED COSTING (Paper II)
Time: 2½ Hours
Max. Marks: 70
Instructions: All questions are compulsory. Use of calculator is allowed.
Q.1
Choose the alternatives given below.
14
cost are those expected future costs which differ under different alternatives.
Actual
Standard
Relevant
Marginal
When ratio of variable cost to sales is 80% the P/V ratio is
30%
15%
25%
20%
cost is the cost of next best alternatives of resources.
Opportunity
Fixed
Relevant
Variable
Fixed cost is also called as
Marginal cost
Period cost
Total cost
Standard cost
Make or buy decisions can be facilitated with the help of analysis.
Statement cost
Ratio
Financial statement
Marginal cost
is plan covering all phases of operations for a definite period in the future.
Reporting
Costing
Budget
Relevant cost
The techniques of decision making by comparing total cost and total revenue of different alternatives is called cost.
Standard
Differential
Revent
Opportunity
If changes is made in the level or pattern or method of production the resulting increase in total costs is called
Incremental cost
Historical cost
Standard cost
Absorption cost
Budgets which relates to the individual functions in an organization are known as budget.
Flexible
Master
Fixed
Functional
10) A is vehicle carrying information to those who need it.
Cost sheet
Decision
Report
Budget
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11) When fixed cost is Rs. 1,20,000 sales price per unit is Rs. 100 and variable cost per unit is Rs. 70 then what will be the break-even point?
1200 units
4000 units
8400 units
2400 units
12) costs are expected future costs.
Relevant
Prime
Factory
Total
13) When P/V ratio is 40% and sales value Rs. 10,000 the variable cost will be
Cannot calculated
Rs. 6000
Rs. 5000
Rs. 4000
14) When breakeven point is Rs. 60,000 and margin of safety Rs. 100,000 then actual sales must be
40000
80000
160000
20000
Q.2
Write short notes on:
14
Classification of Reports
Objectives of marginal costing
Q.3

Calculate P/V ration in each of the following cases.
07
Contribution Rs. 3 and sales Rs. 15 per unit
Variable cost Rs. 4 and contribution Rs. 4 per unit
Variable cost to Sales ratio 40%.
Fixed cost Rs. 2000, Profit Rs. 400, Sales Rs. 6000

Selling price per unit is Rs. 10 variable cost per unit Rs. 6. Fixed cost Rs. 2000. Calculate the profit and loss if the firm produces and sales 400 units, 500 units and 600 units.
07
Q.4
The following data relates to manufacturing company.
14
Plant capacity
4,00,000 units per annum
Present utilization
40%
Actual for the year 2015 were:
Selling price
Rs. 50 per unit
Material cost
Rs. 20 per unit
Variable manufacturing cost
Rs. 15 per unit
Fixed cost
Rs. 27,00,000
In order to improve capacity utilization the following two alternative proposals are considered.
Reduce selling price by 10%
Spend additionally Rs. 3 lakhs on sales promotion
How many units should be sold to earn a profit of Rs. 5 lakhs per year under each of the above proposals?
OR
Prepare cash budget for three months April to June 2016. Cash in hand on 1st April 2016 is Rs. 25000. The following information is supplied to you.
Month
Sales
Purchases
Wages
Expenses
February
70,000
40,000
8,000
6,000
March
80,000
50,000
8,000
7,000
April
92,000
52,000
9,000
7,000
May
1,00,000
60,000
10,000
8,000
June
1,20,000
55,000
12,000
9,000
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Other information:
Period of credit allowed by Suppliers two months.
25% of sales is for cash and period of credit allowed to customers for credit sale one month.
Delay in payment of wages and expenses one month.
Income tax of Rs. 25,000 is to be paid in June 2016.
Q.5
The expenses budgeted for production of 10,000 units in a factory are given below.
14
Particulars
Rs. Per unit
Materials
70
Labour
25
Variable overhead
20
Fixed overhead (Rs. 1,00,000)
10
Variable overhead (Direct)
5
Selling expenses fixed)
13
Administration expenses (Rs. 50,000)
5
Distribution expenses fixed)
7
Total
155
Prepare budget for production of 8000 units, 6000 units. Assume that the administration expenses are rigid for all levels of production.
OR
The following information is obtained from a company for January 2016.
Sales
Rs. 20,000
Variable cost
Rs. 10,000
Fixed cost
Rs. 6,000
Find out P/V Ratio, Break-even point and margin of safety this level and the effect of
20% decrease in fixed cost
10% decrease in variable cost
10% increase in selling price