M.COM. (Semester II) (CBCS) Examination, 2017
ADVANCED COSTING (Paper II)
Day Date: Friday, 21-04-2017 Max. Marks: 70
Time: 10.30 AM to 01.00 PM
N.B. All questions are compulsory.
Figures to the right indicate full marks.
Use of Soundless, non-scientific calculator is
allowed.
Q.1 Choose the alternatives given below. 14
Decision making is the primary function of
Management Accountant Top level management
Rank and file Cost Accountant
The cost of a special device that is necessary if a special order is
accepted.
Relevant cost Replacement cost
Opportunity cost Differential cost
When fixed cost increases the break even point
Increases No effect
Decreases Remains same
is a factual information, either in narrative or
descriptive form or in the form of statistical tables, graphs, charts.
Cost Accounting Budgeting
Report None of these
is the value of the alternatives foregone by adopting
a particular strategy or employing resources in a specific manner.
Relevant cost Marginal cost
Differential cost Opportunity cost
portray the financial information either about
the specific activity, function or about the entire operative activity
of the enterprise as whole.
Routine reports Forecast reports
Enterprise reports Control reports G
Contribution is equal
Fixed Cost Profit Fixed Cost Loss
Sales Variable cost All of the above
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The process of creating a formal plan and translating goals into a
quantitative format is
Reporting Marginal costing
Budgeting None of these
A budget that gives a summary of all the functional budgets is
known as
Capital budget Master budget
Flexible budget Fixed budget
10) is conveying the factual information to the higher
authorities for a specific purpose.
Report Organizing
Reporting None of these
11) The classification of fixed and variable cost has a special
significance in the preparation of
Flexible budget Capital budget
Cash budget Zero based budget
12) The contribution to sales ratio of a company is 20% and profit is
Rs. 64,500. If the total sales of the company are Rs. 7,80,000
then the fixed cost is
Rs. 1,56,000 Rs. 91,500
Rs. 90,000 Rs, 1,21,500
13) Costs that change in response to alternative courses of action
are called
Relevant cost Opportunity cost
Differential cost Imputed cost
14) are regular reports conveying the routine
financial information.
Investigative report Information report
Control report Routine report
Q.2 You are given the following data for the coming year for a
factory.
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Budgeted output 8,00,000 units
Fixed expenses 40,00,000
Variable expenses per unit Rs. 100
Selling price per unit Rs. 200
If price is reduced to Rs. 180, what will be the new break even
point?
Write short notes on Differential cost. 07
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Q.3 Product A has a profit-volume ratio of 28%. Fixed operating
costs directly attributable to product A during the quarter II of the
financial year 2015-16 will be 2,80,000. Calculate the sales
revenue required to achieve a quarterly profit of Rs. 70,000.
07
State the different levels of Management. 07
Q.4 A Ltd. produces and sells a single article at Rs. 10 each. The
marginal cost of production is Rs. 6 each and fixed cost is Rs.
400 per annum.
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Calculate:
P/V ratio
The break even sales
The sales to earn a Profit of Rs. 500
Profit at sales Rs. 3,000
New break even point if sales price is reduced by 10%.
Margin of safety at sales of Rs. 1,500 and
Selling price per unit if the break even point is reduced to
80 units.
OR
X limited has given you the following information at 50%capacity
of the production during the month March, 2016.
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Particulars Per unit
Materials 50
Labour 30
Variable Overheads 20
Fixed Overheads (Total Rs. 50,000) 10
Administrative Overheads variable) 10
Selling Expenses fixed) 8
Distribution Expenses fixed) 5
133
You are required to prepare budgets at 70% and 80%
capacity presuming that at 80% capacity material cost will be
less by and variable selling expenses will increase by 10%.
Q.5 A company had incurred fixed expenses of Rs. 4,50,000 with
sales of Rs. 15,00,000 and earned a profit of Rs. 3,00,000
during the first half year.
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In the second half, if suffered a loss of Rs. 1,50,000.
Calculate:
The profit-volume ratio, break even point and margin of
safety for the first half year.
ii) Expected sales volume for the second half year assuming
that selling price and fixed expenses remained unchanged
during the second half year.
iii) The break-even point and margin of safety for the whole
year.
OR
Prepare cash budget of company for April, May and June 2015
in a columnar form using the following information.
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Months 2015 Sales
Rs.
Purchases
Rs.
Wages
Rs.
Expenses
Rs.
January (Actual) 80,000 45,000 20,000 5,000
February (Actual) 80,000 40,000 18,000 6,000
March (Actual) 75,000 42,000 22,000 6,000
April (Budgeted) 90,000 50,000 24,000 6,000
May (Budgeted) 85,000 45,000 20,000 6,000
June (Budgeted) 80,000 35,000 18,000 5,000
You are further informed that:
10% of the purchases and 20% of the sales are for cash.
The average collection period of the company is ½ month and the
credit purchases are paid off regularly after one month.
Wages are paid half monthly and rent of Rs. 500 is paid monthly.
Cash and Bank balance as on April is Rs. 15,000 and the
Company want to keep it on the end of every month at this figure,
the excess cash being put in fixed deposits.