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

1. (a) “Cost accounting is a system of foresight and not a post-mortem, it turns losses into profits, speed-up activities and eliminate waste.” Do you agree? Also explain objectives of cost accounting. (9) (b) Distinguish between: (i) Fixed costs and variable costs (ii) Committed costs and discretionary costs (iii) Product costs and period costs (9) (c) Following data is available from the books of Devavrat Ltd. for the year ending 31st March 2025: Stock of material Material purchased during the year 16,64,000 Work-in-progress Finished Goods Direct wages paid 4,76,800 Indirect wages paid 51,200 Salaries to administrative staff 1,56,800 Freight inward 64,000 Freight outward 40,000 Cash Discount Allowed 28,000 Bad debts written off 37,600 Repairs of Plant and Machinery 84,800 Rent, rates and Taxes Salesmen’s salary and commissions 67,200 Depreciation written off Plant and Machinery 57,800 Director’s Fees 48,000 Factory electricity Charges 96,000 Sale of Scrap 1,000 General Charges 49,600 From the above details you are required to prepare a cost sheet showing: (i) Prime Cost, (iii) Cost of Production, (ii) Factory Cost, (iv) Cost of Goods Sold, (v) Cost of sales and Profit earned. (18) 2. (a) An automobile service centre uses about 75,000 spark plugs per year and the usage is constant at 6,250 per month. The spark plugs cost Rs. 2.50 per unit and carrying cost is estimated to be 20% of the average inventory investment on annual basis. The cost to place an order and to process the delivery is Rs. 24. It is also given that the delivery time is 45 days from the date of order and safety stock of 3,250 spark plug is desired. You are required to calculate : (i) the most economic order quantity (ii) the number of orders per year (iii) the re-order level (9) (b) The following information relates to workforce in a factory during the year Numbers of workers on 1st April 2024 Numbers of workers on 30th April 2025 Number of workers who quit on their own Number of workers who availed golden handshake opportunity Number of workers employed during 2024-25 (including 1500 employed due to expansion) You are required to find out labour turnover rate using : (i) Replacement method (ii) Separation method (iii) Flux method (9) (c) Following transactions took place in respect of a material item : Date Particulars 1 April Opening stock 5000 units @ Rs. 10 each 5 April Issued 3000 units 7 April Purchased 6000 units @ Rs. 12 each 15 April Issued 2500 units 16 April Received back 1000 units (previously issued from orders @ Rs. 11) 17 April Issued 4000 units 25 April Purchased 1000 units @ Rs. 13 each 27 April Issued 3,800 units You are required to prepare a store ledger account using FIFO and weighted method. (12) (d) Explain the concept and treatment of wastage, spoilage, scrap, and defectives in cost accounting with the help of business-related examples. (6)