Dibrugarh University - Cost Accounting 1997

Answer any five questions:-

1. Discuss in details the advantages & limitations of cost accounting. (10+10)

2. Describe the ‘elements of cost’. What are the expenses that are not included in cost accounts? Give at least 6 examples. (14+6)

3. What is material cost? State the essential requirements of an effective material control. (6+14)

4. When do you advocate pricing the issue of materials at cost price based on FIFO? Give your arguments. What are the limitations of this method of pricing? (10+10)

5. What do you mean by scrap value & abnormal gain? How are these treated in process costing? (8+12)

6. From the following hour rate, calculate the machine hour rate of a machine: - (20)
                Cost of machine                               Rs30500
                Scrape value                                      Rs2500
                Estimated life                                    12 yrs.
                Effect on work in days – 200 days of 8 hrs; 100 days of 6 hrs.
                Maintenance & repairs – 7.5% of cost of machine.
                Stores consumed – Rs1000
                Power consumption – Rs2 per operating hour.
                Insurance premium – 1% of cost of machine
                Supervision expenses – Rs7500
                Estimated idle time – 10%.

7. The production section of a factory working on a job order system pays their workers under the rowan premium bonus scheme. Workers are also entitled to a dearness allowance of Rs24 per work of 48 hours. A worker’s basic wage is Rs4 per day of 8 Hours & his work time sheet for a week are given below:-

                Job No.                                                 Time allowed                                                     Time taken
                   1                                                           25 hours                                                               20 hours
                   2                                                           30 hours                                                               20 hours
                Idle time (waiting)                                  _                                                                        8 hours

Calculate gross wages the worker has earned for the week. (20)

8. It has been mentioned that the cost standard for materials consumption are 20 kg @ Rs5 per kg. Compute the variance when Actual are: (20)
a)   24 kg at Rs5 per kg.
b)   20 kg at Rs6 per kg.
c)    24 kg at Rs6 per kg.
d)   18 kg for a total cost of Rs180.