Dibrugarh University Question Papers: Cost Accounting' 2017

2017 (May)
Course: 401
(Cost Accounting)
The figures in the margin indicate full marks for the questions
Full Marks: 80
Pass Marks: 24
Time: 3 hours

1. (a) Fill in the blanks:                  1x4=4
a)      Cost which can be charged to a particular unit of cost is considered as ____.
b)      Reorder quantity may be measured in ____.
c)       Under the Rowan plan ____ is a fixed percentage.
d)      The basis of apportionment for indirect wages is ____.

(b) Choose and write the correct answer:                             1x4=4
a)      In a printing industry, job costing/process costing is applied.
b)      The sum of direct material cost and direct labour cost is termed as prime cost/overhead.
c)       Tender form is issued by the purchasing department/production department.
d)      Vacation pay for factory workers should be charged to factory overhead/direct labour.

2. Write on the following (any four):                       4x4=16

a)      Statement of cost and profit.
b)      Inventory control.
c)       Causes of labour turnover.
d)      Allocation, apportionment and absorption of overhead.
e)      Five reasons for disagreement of profit as shown by the Cost Accounting and Financial Accounting.

3. (a) Following information are related to a product for the year ended on 31st March, 2016:

Stock on 1st April, 2015:
Raw materials
Finished products (2000 tons)
Stock on 31st March, 2016:
Raw materials
Finished products (4000 tons)
Raw material purchased
Direct wages
Rent, rates and taxes of works
Carriage inwards
Work-in-progress on 1st April, 2015
Work-in-progress on 31st March, 2016
Cost of factory supervision
Sales of finished goods


Advertisement and selling expenses amount to 0.25 paise per ton sold. 32000 tons were produced during the year. Prepare a cost sheet showing (i) the value of raw materials used, (ii) cost of production for the year, (iii) cost of goods sold, (iv) the net profit for the year and (v) the net profit per ton of the product.                                        14
(b) What do you understand by cost classification? Discuss the various bases of classification of costs and various types of costs.                                    4+6+4=14

4. (a) A worker takes 80 hours to do a job for which the time allowed is 100 hours. His daily rate is Rs. 2.50 per hour. Calculate the work cost of the job under the following methods of payment of wages and statement of works cost:14
a)      Time rate
b)      Halsey plan
c)       Rowan plan
Additional information:
1)      Material cost – Rs. 120
2)      Factory overhead 125% of wages
(b) What do you mean by perpetual inventory system? How does it differ from ABC analysis? State the advantages of ABC analysis.                                               4+6+4=14

5. (a) From the following particulars, compute a comprehensive machine hour rate:                        14
a)      Cost of machine – Rs. 1,00,000; Estimated life – 15 years; Residual value – Rs. 10,000
b)      Machine running hours – 2040 hours per machine per annum including idle time of 40 hours due to repairs and maintenance and breakdown of machine.
c)       Power consumption of the machine per hour – 20 units; Rate of power per 100 units – Rs. 80.
d)      There are two operators in the shop and wages of an operator who is in charge of two machines Rs. 12,000 p.a.
e)      Rent, rates and taxes of the shop Rs. 4,800 p.a.
f)       Insurance premium for the machine Rs. 400 per quarter.
g)      General lighting per month – Rs. 600
h)      Repairs and maintenance expenses per month Rs. 400 per machine.
i)        Shop supervisor’s salary per month – Rs. 1,500.
j)        Other factory overhead allocated to the shop Rs. 6,000 p.a.
There are four identical machines in the shop. The supervisor devotes 1/5th of his time for supervising the machine.
(b) Explain the following:                              7+7=14
a)      Various methods of determining overhead rate.
b)      Various bases of apportionment of overheads to departments.

6. (a) From the following information, prepare a Reconciliation Statement:                          14

Profit as per cost accounts
Works overheads under recovered
Administrative overheads under recovered
Selling overheads over recovered
Overvaluation of opening stock in cost accounts
Overvaluation of closing stock in cost accounts
Interest earned during the year
Rent received during the year
Bad debts written-off during the year
Preliminary expenses written-off during the year
(b) (i) How does job costing differ from process costing?
(ii) What do you mean by normal loss, abnormal loss and abnormal gain in process costing? How are they treated in Process Accounts?                                           7+7=14

Full Marks: 80
Pass Marks: 32
Time: 3 hours
1. (a) Choose the correct answer:                             1x4=4
a)      Fixed cost per unit decreases/increases with rise in output.
b)      For EOQ, Q stands for quality/quantity.
c)       Under the Rowan plan, bonus is a fixed/variable percentage.
d)      Bases of factory rent apportionment are floor area/direct expenses.
(b) Fill in the blanks:                                        1x4=4
a)      In an oil industry, ____ costing method is applied.
b)      The perpetual inventory system means a ____ stock-taking system.
c)       In process costing, costs are calculated at the end of the ____ process.
d)      Overheads are the ____ f indirect material, indirect labour and indirect expenses.
2. Answer the following questions (any four):                    4x4=16
a)      Distinguish between Cost Accounting and Financial Accounting.
b)      What do you mean by perpetual inventory system?
c)       Explain the causes of labour turnover.
d)      Explain different methods of calculating overheads.
e)      Distinguish between Job Costing and Process Costing.
3. (a) Following information has been obtained from the cost records of Aditya Chemical Ltd. for 2016:

Finished goods on 1.1.2016
Raw materials on 1.1.2016
Work-in-progress on 1.1.2016
Direct Labour
Purchase of raw material
Indirect labour
Heat, light and power
Factory insurance and taxes
Repairs to plant
Factory supplies
Depreciation on factory building
Depreciation on plant
Finished goods on 31.12.2016
Raw materials on 31.12.2016
Work-in-progress on 31.12.2016
No office and administrative expenses were incurred during the year 2016. Prepare a statement of cost for the year 2016 showing (i) cost of raw material consumed, (ii) factory cost and (iii) cost of goods sold.                   11
(b) What do you understand by cost classification? Discuss the various bases of classification of costs and give examples of each class of cost.                                            3+5+3=11
4. (a) The products A and B are used as follows:

Normal consumption
Maximum consumption
Minimum consumption
Reorder quantity
Reorder period
200 units Per week
300 units Per week
100 units Per week
1,000 units
4 to 5 weeks
100 units Per week
200 units Per week
50 units Per week
500 units
2 to 4 weeks
For each product, calculate the following:                             11
1)      Reorder level
2)      Maximum level
3)      Minimum level
4)      Average stock level
(b) What do you understand by economic order quantity (EOQ)? Describe the methods pricing materials issues with its advantages and disadvantages.                 4+7=11
5. (a) A worker takes 12 hours to complete a work on daily wages and 8 hours on a scheme of payment by results. Worker’s day rate is Rs. 6 per hour. The cost of material of the product is Rs. 20 and the overheads are recovered at 200% of the total wages. Calculate the factory works cost of the product under (i) Rowan plan and (ii) Halsey scheme.                       11
(b) Write short notes on:                              3+3+5=11
a)      Idle time
b)      Overtime
c)       Labour turnover
6. (a) A machine purchased for Rs. 55,000. It was installed in a shop over 1/5th of its floor area at an additional cost of Rs. 5,000. The working life of the machine as also the scrap value was estimated at 10 years and Rs. 5,000 respectively. From the following details, compute the machine hour rate:                   12

Rent and rates of the shop p.a.
General lighting of the shop p.m.
Repairs and maintenance for the machine p.a.
Insurance premium p.a.
Supervisor’s salary p.m.
It is estimated that the supervisor devotes 1/4th of his time for the machine. The cost of power is Rs. 20 per 100 units and the machine consumed 10 units per hour. Normal working hour of the machine is estimated at 1200 but during the year it actually worked for 1000 hours.
(b) What do you mean by overhead cost? Explain the various classifications of overhead cost and its bases of apportionment.                                4+8=12
7. (a) A product posses through three processes for completion. During December 2016, 1000 units were produced. The data relating to the process were as follows:
A (Rs.)
B (Rs.)
C (Rs.)
Direct Expenses
The indirect expenses for the period were Rs. 14,000. The scraps of process B and C were sold at Rs. 1,450 and Rs. 1,660 respectively. Prepare the Process Accounts and cost of Production Account.                                       11
(b) Explain the following:                              5+6=11
a)      Difference between Cost Audit and Financial Audit.
b)      Reconciliation of Cost Account and Financial Account.