M.Com. (Semester II) (CBCS) Examination Oct/Nov-2017
ADVANCED COSTING
Day Date: Monday, 20-11-2017 Max. Marks: 70
Time: 10.30 AM to 01.00 PM
Instructions: All questions are compulsory.
Use of calculator is allowed.
Q.1 Choose the alternatives given below. 14
If fixed cost is Rs. 12000, p/v ratio is 40% sales Rs. 80,000 what is the profit?
Rs.32,000 Rs.36,800
Rs. 92,000 Rs,20,000
cost is the cost of next best alternatives of resources.
Marginal Market
Opportunity Fixed
The technique of decision making by comparing total costs and total revenue
of different alternatives is called cost.
Absorption Differential
Uniform Standard
A is formal communication, mostly written, which is generally
moves upward.
Report Budget
Responsibility Authority
If p/v Ratio is 30% and fixed cost is Rs. 90,000 then break even sales are

63,000 27,000
81000 3,00,000
is an estimate of future needs calculated for a definite period of
time.
Marginal cost Relevant cost
Budget Cost sheet
Cash budget is prepared strictly on basis and not on accrual
basis unlike other budget.
To be added Cash
Accrued Credit
The costing technique that considers all fixed cost as period cost is
Marginal costing Differential costing
Absorption costing Opportunity costing
Final output of accounting and costing function is called
Finished product Total cost
Policy Report
Page 2 of 3
SLR-CJ-20
10) The Budget which relates to the individual functions in an organisation are
known as Budget.
Cash Capital
Functional Fixed
11) If change is made in the level or pattern or method of production the resulting
increase in total costs is cost.
Standard Incremental
Marginal Historical
12) Margin of safety means
Total sales Break even sales
Total sales Break even sales
Total sales x Break even sales
Total sales cash sales
13) The Budget in which all functional budgets are incorporated is called
budget
Zero Master
Functional Flexible
14) The volume of operation at which total sales revenue is just equal to total
cost is called
Margin of safety Contribution
Breakeven point Sales minus variable cost
Q.2 Write short answer. 14
Types of Budget.
Reporting to different levels of Management.
Q.3 The cost of production of output per unit is follows. 07
Direct Materials Rs.5
Direct wages Rs.4
Production overhead (40%fixed) Rs.5
Administration overhead (fixed) Rs.1
Total Rs.15
The figures given above are based on an output of 1,00,000 units. Selling
price per unit is Rs. 20. What is the breakeven point?
Selling price per units Rs. 10 variable cost per unit Rs. 6. Fixed cost Rs.
2000. Actual sales Rs. 20,000
Calculate Margin of safety in units and in Value.
07
Q.4 Bright Ltd have prepared the budget for the production of 1,00,000 units of
product for costing period as under.
14
Per unit Rs.
Raw Materials 10.08
Direct labour 3.00
Direct Expenses (fixed) 0.40
Works overhead fixed) 10.00
Administration overhead (80%fixed) 1.60
Sales overheads 0.80
Actual production in the period was only 60,000 units. Prepare budget for the
original and revised level of output.
OR
Page 3 of 3
SLR-CJ-20
Bajaj Ltd provides you the following information.
Variable cost Rs. 6,00,000
Fixed cost Rs. 3,00,000
Net profit Rs. 1,00,000
Sales Rs. 10,00,000
Find
P/v Ratio
BEP
Profit when sales amounted to Rs. 12,00,000
Sales required to earn a profit of Rs. 2,00,000.
Q.5 Tata Ltd. provides you the following information. 14
Normal capacity 200,000 units
Opening stock 40,000 units
Units produced 1,70,000 units
Units sold 2,00,000 units
Selling price per unit Rs.25
Direct Material cost per unit Rs.4
Direct Labour cost per unit Rs.4
Variable production overheads per unit Rs.2
Fixed production overheads Rs.8,00,000
Variable Administration overheads per units sold Re.0.50
Fixed Administration overheads Rs. 1,00,000
Variables selling distribution overheads Per
unit sold
Rs. 1.50
Fixed selling and Distribution overhead Rs. 2,00,000
Prepare Income statement using Marginal costing.
OR
Prepare cash Budget for three months ending 30th June 2016 from the
following information.
Month Sales Materials Wages Overheads
February 14,000 9,600 3,000 1,700
March 15,000 9,000 3,000 1,900
April 16,000 9,200 3,200 2,000
May 17,000 10,000 3,600 2,200
June 18,000 10,400 4,000 2,300
Credit terms are Sales/Debtors, 10% sales are on cash, 50% of the
credit sales are collected in next month and balance in the following
month.
Creditors Materials, 2 month
Wages ¼ month
Overheads ½ month
Cash and Bank Balance on 1st April 2016 is expected to be Rs.6000.