Important Questions

Class: B.Com. III Semester

Subject: Cost Accounting

Cost Accounting- An Introduction

Very Short Questions:

1. What do you mean by cost?

2. What do you mean by cost centre?
3. What are the 2 objective of cost accounting
4. What do you understand by opportunity cost?
5. Write the four name of methods of cost accounting.
6. Differentiate between Cost and Costing?
7. Which cost unit is applicable in Hotel Industry?
8. Which cost unit is applicable in Cement Industry?
9. Which cost unit is applicable in Toy making Industry?
10. Write the name of different techniques of cost accounting.

Elements of Cost

11. Write the difference between Cost of Production and Cost of Goods Sold.
12. Mention main elements of cost.
13. What are the main elements of Prime Cost.
14. Calculate the amount of cost of goods sold from the following information.
Cost of Production of 2,000 units are Rs. 2,00,000
Opening stock of Finished Goods are 1,000 Units
Closing stock of Finished Goods are 500 Units Ans. 2,50,000
15. What is the difference between Works Overheads and Works C ost?

Material Cost Control

16. Write two objects of Material Control.

17. Write name of methods of Material Control.
18. Write the formula of Minimum Stock Level.
19. What is Economic order quantity?
20. Write the formula of Economic Order Quantity.
21. Annual consumption of a commodity is 5,000 Units, Cost per order is Rs 64, Cost per unit is Rs. 100 and carrying
cost is 16% of material cost. Calculate Economic Order Quantity. Ans. 200
22. What is Maximum Stock Level?

Valuation and Issue of Material

23. What is meant by Bin Card?

24. What are the objectives of Valuation of Material?
 Labour Cost Control

25. What is meant by ‘Casual Worker’?

26. What is meant by ‘Ghost Worker’?
27. What do you mean by labour turnover?
28. Write the formula to find out Flux Rate of Labour Turnover.

Methods of Remunerating Labour

29. Mention the names of different individual bonus scheme of wages payment.
30. At what rate remuneration will be paid to a worker under Emerson bonus scheme if a worker has worked on
110% efficiency.
31. Mention formula to calculate bonus hours in Rowan Bonus Scheme.
32. The standard time for a job is 20 hours @ Rs. 10 per hour. The job was actually finished within 15 hours.
Calculate total remuneration under Halsey Bonus Scheme.

Overhead Costs

33. What is the difference between Allocation and Apportionment of overheads?

34. What do you mean by semi- variable overheads?
35. If power expenses of a machine in one year is Rs. 10,000 and machines consumes 5 units per hour @ Rs. 0.80
per Kwh. Than find working hours of machine for the year.

Unit or Output Costing Method

36. What is Cost Sheet?
37. What is Tender Price?
38. Which method is suitable in Coal Industry?
39. State the name of four industries where Unit Costing Method is applied.

Operating Costing Method

40. What is operating cost method?

41. What do you mean absolute Ton KM? Give Formula.
42. What do you mean by Commercial Ton KM? Give Formula.
43. What is meaning of ‘cost unit’ in operating costing?
44. A Bus runs 90,000 kms. In a year. One litre diesel is required for 12 kms and the cost of diesel per litre is Rs. 10.
Calculate cost of diesel.

Job and Contract Costing Method

45. Explain the meaning of Contract Costing.

46. Which type of business uses contract costing?
47. What is work certified?
48. What is work uncertified?
49. What is retention money in contract costing?
50. What is the difference between Job Costing and Contract Costing?
 Marginal Costing
51. Explain meaning of Marginal Costing.
52. Explain meaning of Profit Volume ratio.
53. What is BEP ?
54. What is Margin of Safety ?
55. If total cost is Rs. 30,000 for the sale of Rs. 50,000 and total cost is Rs. 22,000 for the sale of Rs. 30,000 then find
P/V ratio.
56. P/V ratio is 60%, Variable cost is Rs. 360, find selling price.
57. Fixed expenses are Rs. 90,000, Sales are Rs. 3,00,000 & profit is Rs. 60,000. Calculate P/V ratio.

Standard Costing

58. What do you understand by Variance?

59. Why Idle time variance is always adverse? Give formula.
60. Define standard costing.
61. What is the formula of Material Yield Variance?
62. Write two limitations of Standard Costing.

Short Questions:
1. Mention 10 differences between Cost Accounting and Financial Accounting.
2. Information regarding two types of material A & B are as follows:
Normal Usages 50 Units per week
Minimum Usages 25 Units per week
Maximum Usages 75 Units per week
Reorder quantity A: 300 Units B: 500 Units
Reorder period A: 4 to 6 week B: 2 to 4 week
Calculate the following levels of each type of material:
(a) Re order level (b) Minimum stock level (c) Maximum stock level (d) Average stock level
3. For one of the A class item, the purchase manager spent Rs. 500 in procuring 1,000 units in a single lot in a year
and thereby availed a discount of 5% on the price of Rs. 10 per unit. No discount will be given for any other
order quantity. Inventory carrying cost worked out to be 40%. If he follows EOQ policy, what would be the gain
or loss to the organization?
4. Calculate number of employees in the beginning and at the end of the year from the following information:
Labour Turnover Rate 5%
Number of Separation during the year 10
Number of employees at the end of the year were 100 in excess compared to number of employees in the
beginning.
5. Ascertain the amount of bonus and total wages under Emerson Plan with the help of following information:
Standard output in 10 hours : 120 Units
Actual output in 10 hours : 132 Units
Wages Rate : Rs. 15 per hour
6. The overhead cost of manufacturing 400 units of an article is Rs. 1,600 but when 600 units of the same article is
produced, the overhead cost is Rs. 2,000. Segregate the fixed and variable part of overhead cost.
7. Differentiate between Cost Sheet and Production Account.
8. From the following information calculate passenger kilometer for the month of July 2019.
Number of Buses : 5
Days operated in the Month : 25
Trips made by each bus : 5
Distance of route (One Side) : 30 Kms.
Capacity of Bus : 50 Passengers
Normal Passengers travelling : 90% of capacity
9. From the following information, calculate Total Ton Kms.
Number of Lorries : 10
Operating days in the Month : 25
Trips made by each lorry : 5
Distance covered per trip : 40 kms.
Capacity of each lorry : 5 Ton
Capacity Utilised : 70%
10. If certification of contract price is more than 1/4th of contract price but less than 1/2 of it then give the formula
for the amount to be credited in Profit & Loss account.
11. What is the importance of ‘Escalation Clause’ in contract price?
12. Compute a conservative estimate of profit on a contract (which has been 80% complete) from the following
particulars.
Total expenditure to the date : 1,70,000
Estimated further expenditure to complete : 34.000
Contract price : 3,06,000
Work Certified : 2,00,000
Work not certified : 17,000
Cash received : 1,63,200
13. Detail regarding a contract for the year 2019 is as follows :
(a) Contract Price : 40,00,000
(b) Cost up to date : 20,80,000
(c) Work Completed : 2/3 of Contract Price
(d) Work Certified : 1/2 of Contract Price
(e) Cash Received : 90% of Work Certified

What amount of profit will be credited to P& L account?

14. Calculate Material Cost Variance from the following information.

Standard : Material for 70 Kg. of output 100 Kg.
Price of Material Rs. 2 per Kg.
Actual : Units Produced during the period 21,000 Kg.
Actual material consumed 28,000 Kg.
Cost of material consumed Rs. 50,400