Answer
any five questions:-
1.
What is cost accounting? What are its advantages so compared to financial
accounting? (5+15)
2.
Explain the utility of ‘Elements of cost’ to management. What are the different
types of expenditure that are not included in Cost accounts. (10+10)
3.
When do you advocate pricing the issue of material at cost price based on ‘Last
in first out (LIFO)’? Give your agreements. What are the limitation of this method of
pricing? (10+10)
5.
A Co. is supplying its products to the ultimate consumers through the
wholesalers to retailers. The managing directors thinks that if they sell
through retailers or to the consumer direct they can increase their sales,
earns better prices & makes more profit. As a cost accountant of the
Company you are required to advise the managing director in selecting the
channel of distribution from the given information:-
I II III
Channels
of distribution To
consumer direct To
retailer direct To
wholesaler
Sales
price per unit (Rs) 4.75 4.25 3.75
Estimated
sales per year (nos) 1200000 1140000 1080000
Selling
& distribution cost per unit (Rs) 1.50 0.80 0.45
Cost
of production:-
Variable
cost @ Rs2 per unit.
Fixed
cost Rs1000000.
In selecting the channels of distribution what factors besides
cost would you consider? Give your answer with the help of a statement. (20)
6.
A Co.’s product passes through two distinct processes, A & B & then to
finished stock. It is known from past experience that wastage occurs in the processes as under:-
In process A – 5% of the units entering the product.
In process B – 10% of the units entering the product.
The
process costs are:-
Process A (Rs) Process B (Rs)
Materials
consumed 6000 3000
Wages 7000 4000
Manufacturing
expenses 2000 2000
10000
units were introduced into the process A costing Rs5000. The outputs were:-
Process A – 9400 units.
Process B – 8300 units.
Prepare process cost accounts showing the cost of the output. (20)
7.
It has been mentions that the cost standards for material consumption are 40 kg
@ Rs10 per kg. Compute the variance when actual are :- (5x4)
a) 48
kg @ Rs10 per kg
b) 40
kg @ Rs12 per kg
c) 48
kg @ Rs12 per kg
d) 36
kg for a total cost of Rs360
8.
Write short notes on:- (5x4)
a. Normal
wastage.
b. Labour
turnover.
c. Fixed
overhead.
d. Standard
cost.