M.Com. (Semester (CBCS) Examination Oct/Nov-2017
ADVANCED COSTING
Day Date: Thursday, 16-11-2017 Max. Marks: 70
Time: 02.30 PM to 05.00 PM
Instructions: All questions are compulsory.
Figures to the right indicate full marks.
Use of Calculator is allowed.
Q.1 Choose the alternatives given below. 14
maintained by store keeper.
Store ledger Bin Card
Stock Verification Sheet Cost Sheet
At and carrying cost is minimum.
EOQ Minimum level
ABC Re-order level
Aggregate of direct material, direct labor and direct expenses is called
Prime Cost Overheads
Works Cost Manufacturing Cost
price is calculated by dividing the total cost of materials, by
total quantity of materials in stock.
Weighted Moving
Simple Standard
fresh order of material is to be placed.
Maximum Reorder
Minimum Danger
Rent of Shop is apportioned on basis of
Area Sq. ft. Value of machine
Number of workers Light points
is the average of the prices of the consignments lying in store.
Weighted average Moving average
Simple average Standard price
If actual overheads incurred are more than absorbed overheads, then it is
case of
Over Under
Excess Equal
are not affected by change in level of output.
Variable Fixed
Semi variable Semi fixed
10) A complete list of all materials required for a job is known as
Material abstract Bill of Material
Bin Card Stock Verification Sheet
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11) In case of rising prices, the of issue of material help in saving
income tax to some extent.
Weighted average LIFO
Simple average FIFO
12) When materials are subjects to deterioration of issue of material
is suitable.
Weighted average LIFO
Simple average FIFO
13) level maximum rate of consumption X Maximum delivery period.
Maximum Minimum level
Average Re-order level
14) According to ABC analysis, the items are small in number
but high in value and are strictly controlled.
A B
C All
Q.2 Write short note on. 14
Under and over absorption of overheads.
Treatment of interest on capital in cost accounts.
Q.3 Calculate EOQ and No. of orders in a year from the following.
Monthly demand of material 500 Kg, Cost of placing one order Rs.100, Price
per kg Rs.10 Carrying cost per unit per year Rs.0.30.
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Prepare store ledger using simple average method.
April 1
April 6
April 9
April 15
April 18
April 24
April 30
Purchase 200 kg Rs 10 per kg
Purchase 300 kg Rs.12 per kg
Issue 250 Kg
Issue 100 Kg
Purchase 500 kg Rs.11 per kg
Issue 200 Kg
Issue 200 Kg
Q.4 A machine costing Rs.1,00,000 is expected to run for 10 years at the end of
which period its scrap value is likely to be Rs.9,000. Repairs during whole life
of the machine are expected to be Rs.1,800 and the machine is expected to
run 4380 hours per year on the average. Its electricity consumption is 15 units
per hour, the rate per unit being 50 paisa. The machine occupies one-fourth of
the area of the department and has two points out of a total 10 for lighting.
The foreman has to devote about one-third of his time to the machine. The
monthly rent of the department is Rs.3000 and the lighting charges amount to
Rs.800 per month. The foreman is paid a monthly salary of Rs.4800,
Ascertain the machine hour rate, assuming insurance is p.a. and the
expenses on oil etc. Rs.90 per month.
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OR
The Purchase Department of your organization has received an offer of
Quantity discounts on its orders of materials as under.
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Price Per ton Rs. Tons
1400
1380
1360
1340
1320
Less than 500
500-1000
1000-2000
2000-3000
3000 and above
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The annual consumption of material is 5000 tons. The delivery cost per order
is Rs.1,200 and the annual stock holding cost is estimated at 20% of the
average inventory.
Advise the best quantity to be ordered.
Q.5 The production department of a factory provided the following information for
the month of September 2016.
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Material used Rs. 1,08,000
Direct wages Rs. 90,000
Labour hours worked 36,000 hours
Machine hours worked 30,000 hours
Overheads chargeable to department Rs. 72,000
For an order executed by the department during the period, the relevant
information was as under
Materials used Rs.12,000
Direct wages Rs. 6,400
Labour hours worked 3,200 hours
Machine hours worked 2,400 hours
Calculate the overheads chargeable to the order, by using any three methods
of absorbing overheads.
OR
What do you understand by uniform costing? Outline the factors that led to its
introduction.