DISTANCE EDUCATION
B.Com.(CA)/B.Com.(CA)(Lateral) DEGREE EXAMINATION,
MAY 2017.
COST ACCOUNTING
(2005 onwards)
Time Three hours Maximum 100 marks
SECTION A — 8 40 marks)
Answer any FIVE questions.
1. What is cost accounting? Discuss briefly its objective and
advantages.
2. Write notes on
Cost unit
Cost centre
Cost object.
3. Calculate maximum level, minimum level and reordering
level from the following data.
Re-order quantity 1500 units
Re-order period 4 to 6 weeks
Minimum consumption 400 units per week
Normal consumption 300 units per week
Minimum consumption 250 units per week.
4. What is a bill of material? Give a specimen of bills of
material.
Sub. Code
33
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5. Compute the earnings of a worker under
Time rate system
Halsey plan
Rowan plan
Wage rate Rs. 3 per hour
Standard time 80 hours
Actual hours 50.
6. Following information pertains to process A
Units
Opening work-in-process complete) valued
at 560
200
Units introduced during current period 1,000
Finished output during the period transferred
to process B
1,100
Closing work-in-process complete) 100
Costs incurred during the period 8,400
Make the necessary calculations and prepare process A
account.
7. Give that the cost standards for material consumption
are 40 Kgs 10 per Kg, compute the variance when
actual are
48 Kgs at 10 per Kg
40 Kgs at 12 per Kg
48 Kgs at 12 per Kg
36 Kgs for a total cost of 360.
8. Distinguish between integral and non-integral accounting
system.
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SECTION B — × 15 60 marks)
Answer any FOUR questions.
9. "A good system of costing serves as a means of control
over expenditure and helps to secure economy in
manufacture" Discuss.
10. The following transactions occur in the purchase and
issue of a material
Jan 2 Purchased 4,000 Units 4.00 per unit
Jan 20 Purchased 500 Units 5.00 per unit
Feb 5 Issued 2,000 Units
Feb 10 Purchased 6,000 Units 6.00 per unit
Feb 12 Issued 4,000 Units
March 2 Issued 1,000 Units
March 5 Issued 2,000 Units
March 15 Purchased 4,500 Units 5.50 per unit
March 20 Issued 3,000 Units
From the above, prepare the stores ledger account using
the weighted average price.
11. An operator engaged in machining certain components
receives an ordinary day rate of 1.60 per day of 8
hours. The standard output for machining the
components has been fixed at 80 pieces per hour (time as
fixed for premium bonus). On a certain day, the output of
the worker on this machine is 800 pieces. Find the labour
cost per 100 pieces and the wages that would have been
actually earned by the workman under the following
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if a bonus of 0.25 is paid per 100 pieces of the
extra output.
If paid for on straight piece work basis at the
standard rate.
If rowan plan is adopted.
If Halsey premium bonus system is adopted.
12. The Vega manufacturing co. uses FIFO method of
inventory valuation in process costing. The following data
relate to process I for the month of April 2014.
Beginning work in process Quantity 1500 units
Value 4,500
Introduced during the month 5,000 units
Transferred to process II 5,500 units
Ending work-in-process 1,000 units
Degree of completion Beginning
WIP
Ending
WIP
Material 100% 100%
Coversion costs 80% 60%
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Costs added during the months
Material 10,000
Labour 9,800
Overheads 4,900
You are required to
Prepare a statement of equivalent production
Prepare process I account.
13. The standard output of is 25 units per hour in a
manufacturing department of a company employing 100
workers. The standard wages rate per labour hour is 6.
In a 42 hour week, the department produced 1,040 units
of despite of the time paid was lost due to
abnormal reason. The hourly rate actually paid were
6.20, 6 and 5.70, respectively to 10, 30 and 60
workers. Calculate the labour variance.
14. Explain overhead variances (Two way).
15. Pass the journal entries for the following transactions
under integrated system of accounting.
Raw materials purchased on credit) 6,00,000
Materials issued to production 4,00,000
Wages paid direct) 2,00,000
Wages charged to production 1,00,000
Factory overheads incurred 80,000
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Factory overheads charged to production 1,00,000
Selling and distribution overheads incurred 4,00,000
Finished goods at cost 5,00,000
Sales credit) 7,50,000
Closing stock Nil
Receipts from debtors 2,00,000
Payment to creditors 2,00,000