M.COM. (Semester III)(Old) Examination, 2017
ADVANCED COSTING (Paper IV)
Day Date: Thursday, 20-04-2017 Max. Marks: 50
Time: 10.30 AM to 12.30 PM
N.B. All questions are compulsory.
Figures to the right indicate full marks.
Q.1 Select most appropriate alternative from given alternatives
below each questions.
10
One of the most important tools in cost planning is:
Direct cost Cost sheet
Budget Marginal costing.
Which of the following would be considered to be an investment
centre?
Managers have control over marketing
Mangers have a sales team
Manages have a sales team and are given a credit control
function
Managers can purchase capital assets and are given a credit
control function
In process costing, each producing department is
Cost unit Cost center
Investment center Sales Center
A cost center is:
A unit of product or service in relation to which costs are
ascertained.
An amount of expenditure attributable to an activity
A production or service location, function, activity or item or
equipment for which costs are accumulated
A center for which an individual budget is drawn by
Production overheads are absorbed into production units by the
use of an overhead absorption rate. Which one of the following
best describes how the absorption rate is calculated?
Total number of units produced divided by the total cost center
overheads.
Total number of units produced multiplied by the unit overhead
cost.
Total cost center overheads divided by the cost center activity
level.
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SLR-Q- 44
Total indirect costs for the business divided by the total
number of units produced.
A method of dealing with overheads involves spreading common
costs over cost centers on the basis of benefit received. This is
known as:
Overhead absorption Overhead apportionment
Overhead identification Overhead analysis
The process of cost apportionment is carried out so that:
Costs may be controlled
Cost units gather overheads as they pass through cost centers
Whole items of cost can be charged to cost centers.
common costs are shared among cost centers
An overhead absorption rate is used to:
Share out common costs over benefiting cost centers
Find the total overheads for a cost center
Charge overheads to products
Control overheads
The process of distribution of overheads allotted to a particular
department or cost center over the units produced is called:
Allocation Apportionment
Absorption Departmentalization
10) A cost unit is:
The cost per machine hour
Cost per labour hour
A unit of production or service in relation to which costs are
ascertained
A measure of work output in a standard hour
Q.2 Answer the following. 10
Cost Audit v/s Financial Audit
What is cost center?
Q.3 Write short notes. 10
What is cost unit?
Profit Center
Q.4 Answer any one of the following. 10
Explain the terms controllable and non controllable costs.
Explain the term Activity based costing.
Q.5 Answer any one of the following. 10
Explain the cost audit rules.
Explain the function of Cost Audit.