Explain the following terms.(any seven)
[14 marks]Cost centre
[ marks]Discretionary Costs
[ marks]Relevant Costs
[ marks]Sunk Costs
[ marks]Replacement Cost
[ marks]Conversion Cost
[ marks]Implicit Cost
[ marks]Non-controllable Costs
[ marks]Multiple Choice Questions ( All Compulsory ) 1 Cost accounting has developed due to the ____of financial accounting. A. advantages B. limitations C. merits Dexpansion 2 Which of the following statements are not true regarding cost accounting? Information obtained is used A. by management B. Stock is valued at cost for decision making. Deals partly with Accounts are mandatory according to C. facts & partly D Companies Act with estimates 3 Normal costs are generally _____costs. A. controllable B. uncontrollable C. discretionary Davoidable4 The process of charging such costs which are directly identifiable with some products or departments to such cost centre is called____. A. Cost absorption B. Cost apportionment C. Cost allocation D None of the above 5 ____system of costing is suitable for toy making. A. Batch costing B. Job costing C. Operating costing D Process costing Page 1 of 6 Variable costs increase in total due to A. Increase in sales B. Increase in volume of production C. Increase in profit D All of above 7 In cement industry, the method of costing adopted is _____. A. Process costing B. Job costing C. Contract costing D Operating costing 8 Thread in garments is an example of _____. A. Direct materials B. Variable cost C. Prime cost D Indirect cost 9 Purchase requisition for regular stock materials is prepared by______. A. Cost department B. Production department C. Store keeper D Purchase department 10 Abill of materials is _____. An invoice of Avoucher of materials received by A. materials B. suppliers purchased Adocuments that shows all C. D None of these materials required for a job 11 ____technique is a selective control of materials. A. ABC B. Inventory turnover ratio C. Input output ratio D EOQ 12 Time wage system ____. Benefits the less A. B. Increase cost of production efficient workers Provide non- C. financial D None of above incentives 13 Which method of costing is suitable in case of mass production industries manufacturing standardized products, wherein raw materials pass through a number of processes in a particular sequence? A. Contract costing B. Service costing C. Process costing D Batch costing 14 Batch costing is suitable for _____. A. Sugar industry B. Chemical industry C. Pharma industry D Oil industry
What is costing? Discuss objectives briefly.
[7 marks]State advantages of cost accounting.
[7 marks]Explain cost which are useful to management for decision making.
[7 marks]State the difference between cost accounting and financial accounting.
[7 marks]Discuss two types of costs associated with labour turnover.
[7 marks]Define Absorption of overheads. Explain over absorption and under absorption with example. Write the causes for the same.
[7 marks]Distinguish between time study and motion study. Page 2 of
[3 marks]Nirja pump company uses about 75,000 valves per year and the usage is fairly constant at 6,250 per month. The valves cost ₹ 1.50 per unit and carrying cost is estimated to be 20% of average inventory investment on an annual basis. The cost to place an order and to process the delivery is ₹18. You are required to determine the most economical order quantity.
[7 marks]Aproduct passes through three processes A,Band C. The normal wastage of each process is as follows: Process A- 3 per cent, Process B-5 per cent and Process C- 8 per cent. Wastage of process Awas sold at 25 p.per unit that of Process Bat 50 p.per unit and that of Process Cat ₹1 per unit. 10,000 units were issued to Process Ain the beginning of October 2023 at a cost of ₹1 per unit. The other expenses were as follows: Process Process Process A B C Direct ₹ 1,000 ₹ 1,500 ₹ 500 materials Labour 5,000 8,000 6,500 Direct 1,050 1,188 2,009 expenses Actual 9,500 9,100 8,100 output
[ marks]Prepare the process Aand Process Baccounts. Prepare the process Caccounts.
[7 marks]Assuming that there were no opening or closing stocks.
[7 marks]Devi owns a fleet of taxis and the following information is available form her records: Number of taxis Cost of each taxi ₹ 20,00,000 Salary of manager ₹ 6000 p.m. Salary of accountant ₹ 5000 p.m. Salary of cleaner ₹ 2000 p.m. Salary of mechanic ₹ 4000 Garage rent ₹ 6000 p.m. Insurance premium 5% per annum Annual tax ₹ 6,000 per taxi Driver’s salary ₹ 2,000 p.m. per taxi Annual repair ₹ 1,000 per taxi Total life of a taxi is about 2,00,000 kms. Ataxi runs in all 3,000 kms in a month of which 30% runs empty. Petrol consumption is one liter for 10 km @ ₹ 6.80 per litre. Oil and other sundries are ₹ 5.00 per 100 kms.
[10 marks]Calculate fixed cost per km.
[7 marks]Calculate the cost of running a taxi per km. Page 3 of
[3 marks]