M.Com. DEGREE EXAMINATION, NOVEMBER 2017
First Semester
Commerce
ADVANCED COST ACCOUNTING
(CBCS 2014 onwards)
Time 3 Hours Maximum 75 Marks
Part A (10 X 2 20)
Answer all questions.
1. What is Cost Accounting?
2. What do you understand by the term cost centre?
3. Name four industries where job costing is employed.
4. Write a note on Contract costing.
5. Give two differences between job Costing and Process
Costing.
6. Write a note on accounting for by-products.
7. What do you mean by standard cost card?
8. Define Standard Costing.
9. Write a short note on Cost audit.
10. How will you deal with under valuation of stocks in cost
accounts while preparing reconciliation statement?
Sub. Code
4MCO1C4
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Part B X 5 25)
Answer all questions, choosing either or
11. Enumerate the main objectives of introduction of a
Cost Accounting System.
Or
Differentiate Cost Accounting and Financial
Accounting.
12. From the following information, prepare only an
estimate for Job No. 150:
Rs.
Direct materials consumed 1,000
Direct wages paid 2,000
Factory expenses 60% on wages
Office expenses 20% on factory cost
The tender should include a profit of 20% on selling
price.
Or
The following was the expenditure on a Contract for
Rs. 6,00,000 commenced in January, 2011:
Materials Rs. 1,20,000; Wages Rs. 1,64,400; Plant
Rs. 20,000; Business Charges Rs. 8,600.
Cash received on account on 31st December, 2011
amounted to Rs. 2,40,000 being 80 per cent of work
certified: the value of materials in hand on
31-12-2011 was Rs. 10,000. Prepare the Contract
Account for 2011 showing the profit to be credited to
the year's Profit and Loss Account. Plant is to be
depreciated at 10%.
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13. M/s Joint Products Limited, processing material
produce four joint products C and Cost per
tonne of X process is as under:
Rs.
Material cost 1,350
Labour and overhead cost 900
Total 2,250
The Joint Products yielded 540, 180, 118 and 62
kilograms respectively, the rest being normal
wastage, apportion the total cost of X to each one of
the Joint Products. Could any method other than
the one used by you have been employed? If yes,
what other information would you need?
Or
The yield of a certain process is 80% as to the main
product, 15% as to the by-product and as to the
process loss. The material put in process (5,000
units) cost Rs. 23.75 per unit and all other charges
are Rs. 14,250, of which power cost accounted for
33.33%. It is ascertained that power is chargeable
as to the main product and by-product in the ratio of
10:9.
Draw up a statement showing the cost of the
by-product.
14. A manufacturing concern which has adopted
standard costing furnishes the following
information:
Standard
Material for 70kg. finished product 100 kgs
Price of material Rs. 1 per kg
Actual
Output 2,10,000 kgs
Material used 2,80,000 kgs
Cost of material Rs. 2,52,000
Calculate: Material Usage Variance Material
Price Variance and material Cost Variance.
Or
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Calculate overhead variances from the following
data:
Standard Actual
Fixed overhead 8,000 8,500
Variable overhead 12,000 11,200
Output in units 4,000 3,800
15. What do you understand by Reconciliation of Cost
and Financial Accounts? Enumerate the reasons as
to why such Reconciliation is necessary. Under
what circumstances such Reconciliation be avoided.
Or
A company maintains separate cost and financial
accounts, and the costing profit for 2010 differed to
that revealed in the financial accounts, which was
shown as Rs. 50,000. Following information is
available:

Cost
Accounts
Financial
Accounts
Rs. Rs.
Opening stock of raw
material
5,000 5,500
Closing stock of raw material 4,000 5,300
Opening stock of finished
goods
12,000 15,000
Closing stock of finished
goods
14,000 16,000
Dividend of Rs. 1,000 was received by the
company.
A machine with net book value of Rs.10,000
was sold during the year for Rs.8,000
The company charged 10% interest on its
opening capital employed of Rs. 80,000 to its
process cost.
You are required to determine the profit figure
which was shown in the cost accounts.
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Part C X 10 30)
Answer any three questions.
16. Describe the Elements of cost.
17. Shiwalik Construction Limited took a contract in 2010 for
road construction. The contract price was Rs. 5,00,000
and its estimated cost of completion would be
Rs. 4,60,000. At the end of 2010, the Company has
received Rs. 1,80,000 representing 90 per cent of work
certified. Work not yet certified had cost Rs. 5,000.
Expenditures incurred on the contract during 2010 were
as follows:
Rs.
Material 25,000
Labour 1,50,000
Plant 10,000
Materials costing Rs. 2,500 were damaged and had to be
disposed of for Rs. 500.Plant is considered as having
depreciated by 25 per cent.
Prepare Contract Account for 2010 in the books of
Shiwalik Construction Limited. Also show all possible
figures that can be reasonably credited to Profit and Loss
Account in respect of the contract.
18. Product A is obtained after it passes three distinct
processes. Following information is obtained from the
accounts for the month ending March, 2010.
Items Total Process
I II III
Rs. Rs. Rs. Rs.
Direct material 7,000 2,800 2,000 3,000
Direct wages 8,000 3,000 3,200 4,200
Production overheads 8,000
of Normal loss to input 10% 15%
Output (in units) during the
month
950 840 750
Value of Scrapper unit 2 4 5
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1,000 units at Rs. 3 each were introduced to process I.
There was no stock of material or work-in-progress at the
beginning or end of the period. The output of each process
passes direct to the next process and finally to finished
stores. Production overhead is recovered on 100 per cent
of direct wages.
Prepare process cost accounts and other related accounts.
19. The standard cost of output of a chemical mixture is as
thus:
40% material C at Rs. 20 per kg.
60% material D at Rs. 30 per kg.
A standard loss of 10% of input is expected in production:
The cost records for a period showed the following usage:
90kgs. Material C at a cost of Rs. 18 per kg.
110 kgs. Material D at a cost of Rs. 34 per kg.
The quantity produced was 182 kgs. of good product.
Calculate all possible material variances.
20. Discuss the functions of "Cost audit" in a manufacturing
organization.
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