Cost Accounting — DU B.Com. (Hons.) Previous Year Question Papers

1. (a) What are the essential principles of a good costing system? What are the objections to the introduction of a costing system? (9) (b) What is Cost Accounting? Distinguish between Cost Accounting and Financial What are the methods of costing? Explain their adaptability in different industries. (6) The Beta Chemicals Co. supplies you the following details from its Cost records : Prepare a Cost Sheet giving the cost and profits. The company wants to have a profit of 25% on cost. The units manufactured during the month were 2. (a) What is Employee turnover? How is it measured and how will you treat it in cost accounts? (6) (b) The following transactions occur in the purchase and issue of a material : The stock verifier of the factory noted that on April 17 he had found a shortage of 10 units and on April 30 another shortage of 15 units. From the above particulars prepare the Store Ledger Account using FIFO and LIFO method of pricing of material issues. (12) (a) (b) What do you mean by inventory control? Explain techniques of inventory control. (9) The three workers X, Y and Z produced 80, 100 and 120 pieces respectively of a product ‘Alpha’ on a particular day of 8 hrs. in April in a factory. The time allowed for 10 units of Alpha is 1 hour and their hourly rate is Rs. 4. Calculate for each of these three workers: (a) Earnings for the day (b) Effective rate of earnings per hour, under (i) Straight piece rate (ii) Halsey Premium Plan (iii) Rowan Premium Plan (9) 3. (a) In a factory, the following particulars have been collected for the three months. Compute the departmental overhead rates for each of the production departments assuming the overhead are recovered as a percentage of direct wages. The expenses for the period were : Expenses of D & E departments are reapportioned as under using simultaneous equation method: (a) What is meant by under absorption and over absorption of overheads. How will you deal with them in cost accounts? (6) (b) Calculate machine hour rate for recovery of overheads for a machine from the following information: Cost of machine is Rs. 20,00,000 and estimated salvage value is Rs. 1,00,000. Estimated working life of the machine is 5 years. Annual working hours are 2000 in the factory. The machine is required 200 Hours per annum for repairs and maintenance. Setting-up time of the machine is 100 hours per annum to be treated as productive time. Cost of repairs and maintenance for whole working life of the machine is Rs. 2,00,000. Power used is 15 units per hour at a cost of Rs. 5 per unit. No power is consumed during maintenance and setting-up time. A chemical is required for operating the machine is Rs. 10,600 per annum. Wages of an operator is Rs. 6000 per month. The operator devoted one-third of his time to the machine. Annual insurance charges 3 per cent of cost of machine. Light charges for the department are Rs. 3000 per month, having 56 points in all, out of which only 7 points are used at this machine.