M.Com. (Semester II) (CBCS) Examination Oct/Nov-2017
ADVANCED COSTING
Day Date: Friday, 17-11-2017 Max. Marks: 70
Time: 10.30 AM to 01.00 PM
Instructions: All questions are compulsory.
All Questions carry equal marks.
Working should form part of your answer.
Q.1 Fill in the blanks. 14
Two main methods of calculating equivalent production in process are
and Average cost.
FIFO LIFO
Simple Avg. Cost Weighted avg. Cost
Idle Time variance is always
Adverse Positive
Favorable Equal
Contribution earned after reaching BEP is of the firm.
Profit Loss
No profit No Loss All of the above
Period cost is also known as
Variable Fixed
Semi variable Semi fixed
Amount realized from the sale of scrap which is relevant with manufacturing
process is reduced from cost.
Joint Separation
Process Fixed
is to be appropriate cost unit for a transport business.
Per Tonne K. m. Per patient Day
Per Day Per Show Per Room Day
Costing system is used in the Construction Industry.
Process Job
Operating Contract
Contribution is known as
Marginal Income Gross Profit
Net Income All of the above
A basic Cost Accounting method in which fixed factory overhead is added to
inventory is.
Direct Costing Variable Costing
Absorption Costing Process Costing
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10) In Profit volume ratio is 40% and sales value is Rs. 10000, the Variable
Cost will.
Rs.4000 Rs.6000
Rs.5000 None of the above
11) Labour Cost variance is the difference between.
Std. Labor cost and Actual Labour Cost
Fixed labour cost and Variable labour cost
Estimated Labour Cost and Std. Labour Cost
All of above
12) Telephone Charges are considered as.
Relevant Costing Operating Costing
Engineered Cost Semi Variable Cost
13) By Product Cost Accounting relates to
Reverse Cost Method Splitting of Semi Variable Cost
Production Order None of above
14) Make or Buy decisions are based on
Differential Cost Analysis Joint Cost
Single Output Costing Overhead Absorption
Q.2 Deluxe Ltd. Undertook a contract for Rs.5,00,000 as on 1st July 2015.On 30th
June 2016, when the accounts were closed, the following details about the
contract were gathered.
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Particulars Amount
Rs.'000s
Materials purchased 100
Wages paid 45
General expenses 10
Plant purchased 50
Materials on hand on 30th June 2016 25
Wages accrued on 30th June 2016 5
Work certified 200
Cash received 150
Work uncertified 15
Depreciation of plant 5
The above contract contained an escalation clause which read as follows.
the event of materials and rates of wages increase by more than the
contract price would be increased accordingly by 25% of the rise in the cost
of materials and wages beyond in each case'.
It was found that since the date of signing the agreement, the prices of
materials and wage rates increased by 25%. The value of work certified
does not take into account the effects of the above clause. Prepare Contract
Account.
The following are the details in respect of Process X and Process Y of a
processing factory.
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Particulars Process X Rs. Process Y Rs.
Material 10,000
Labour 10,000 14,000
Overheads 4,000 10,000
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The output of Process X is transferred to Process Y at a price calculated to
give a profit of 20% on the transfer price and the output of Process Y is
charged to finished stock at a profit of 25% on the transfer price. The
finished department realized Rs.1,00,000 for the finished goods received
from Process Y.
You are required to prepare Process Account and show the total profits
assuming that there was no opening and no closing work-in-progress.
Q.3 Write short notes. 14
Advantages of job Costing
Treatment of profit of incomplete Contract
Q.4 X Ltd. Manufactures Product which yields two by-products B and C. The
actual joint expenses of manufacture for a period were Rs.8,000.
14
It was estimated that the profits on each product as a percentage of sales
would be 25% and 15% respectively. Subsequent expenses were as
follows:
Particulars Product A Product B Product C
Materials Rs.100 Rs.75 Rs.25
Direct wages 200 125 50
Overheads 150 125 75
Total 450 325 150
Sales Rs. 6,000 Rs.4,000 Rs.2,500
Prepare a statement showing the apportionment of the joint expenses of
manufacture over the different products. Also presume that selling expenses
are apportioned over the products as a percentage to sales.
OR
Standard labour hours and rate of production of Article A are given below:
Skilled Worker 5 hours Rs. 1.50 per hour Total Rs. 7.50
Unskilled Worker 8 hours Rs. .50 per hour Total Rs. 4.00
Semi-skilled Worker 4 hours Rs. .75 per hour Total Rs. 3.00
Actual Data
Article produced 1000 units
Skilled Worker 4500 hours, Rate Rs. 2.00 per hour Total Rs. 9000
Unskilled Worker 10000 hours, Rate Rs. 0.45 per hour Total Rs. 4500
Semi-skilled Worker 4200 hours, Rate Rs. 0.75 per hour Total Rs. 3150
Calculate
Labour Cost Variance
Labour Rate Variance
Labour efficiency Variance and
Labour Mix Variance.
Q.5 XYZ Ltd. Furnished you with the following data: 14
Budget Actual (in a particular month)
No. of working days 25 27
Production in units 20000 22000
Fixed overheads 30,000 31,000
Budgeted overhead rate is Re. 1 per hour. In a particular month the actual
hours worked were 31,500.
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Calculate the following variances:
Total overhead variance;
Expenditure variance;
Volume variance;
Capacity variance;
Calendar variance;
OR
Q.5 Compute a conservative estimate of profit on a contract (which has been
90% complete) from the following particulars. Calculate the proportion of
profit to be taken to Profit Loss Account under various methods and give
your recommendation.
Rs.
Total expenditure to date 4,50,000
Estimated further expenditure to complete the
contract (including contingencies) 25,000
Contract price 6,12,000
Work certified 5,50,800
Work uncertified 34,000
Cash received 4,40,640