Cost Accounting — Summer 2025

ALL 7 Questions must be Compulsory.

Sunk Cost

Following data relates to the consumption of raw materials in a factory. Determine the Economic Order Quantity. 1) Total annual Consumption. 60,000 Units 2) Annual carrying cost per unit. 15% 3) Ordering Cost 12 ₹ 4) Purchase price per unit 15 ₹

Cost Center

Units introduced 1,000, Actual production 850 units, Normal Wastage 10% of input. Find out units of abnormal wastage.

Marginal Costing

Fixed Overheads

Cost Control

Explain in detail Cost Classification.

Manoj has taken 40 hours to complete a job. The wage rate per hour is 8. If he has received 384 as total wages according to Rowan Plan, what would be the amount of wages earned by him according to Halsey Plan and Piece Wage Plan?

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The following information regarding receipt and issue of an items are obtained for January 2024 from the store of a factory: January,2024 Particulars Kgs. ₹ Opening stock 1 5,000 2.00 Issue 2 2,600 Issue3400 Purchases 15 6,000 4.00 Issue 16 2,000 Issue 28 1,000 Purchases 29 2,000 5.00 Issue 30 1,000 The stock verification revealed a shortage of 100 kgs. on 28/01/ 2024. Prepare stores ledger as per FIFO and LIFO method.

State the difference between Cost accounting and Financial accounting

Mansi manufacturing company supplies you the following information for the year ended date 31st March 2024 Page 2 of A B C Raw material introduced in the 12,000 2,440 2,600 process (units) Cost of raw material555 per unit (₹) Direct wages (₹) 34,000 24,000 15,000 Production over 16,160 16,200 9,600 headed Normal loss ( % on number of units 4% 5% 3% entering into the process Wastage ( % on number of units entering into the 6% 5% 4% process having scrap values) Scrap value per unit345 of wastage Output transferred to 70% 60% subsequent process Output sold at the 30% 40% 100% end of the process Selling price per unit of the output sold at the end of the process 12 16 17 You are required to prepare the Process A. Band C Accounts, and a statement of profit earned at each process.

Give a brief introduction of methods of costing. Page 3 of

Aproduct passes through three processes viz. A,B, and Cthereafter it is transferred to finished stock. The information is as under: Particulars Process A B C Units introduced (?) (per unit 100) Normal wastage 2.5% 5% 10% (percentage of input) Sales value of wastage (per unit) 25 50 60 (₹) Abnormal wastage (No. of units) Cost per unit of abnormal wastage Abnormal gain (No.250 of units) Cost per unit of250 abnormal gain Actual production ( 95% (?) (?) % of units produced) Additional Information: (1) The abnormal wastage was 100% of the normal wastage in process A (2) Factory overheads to be distributed as 25% of direct wages in all three processes. From the above information, Prepare Process Accounts, Abnormal Loss Account and Abnormal Gains Account.

Write a short note on ABC Analysis. Page 4 of

Gandhi company Ltd. Limited produced and sold 10,000 units at its 50% production capacity. Following is the Profit and Loss Account for the year ended 31st Maarch 2020: Trading and Profit & Loss Account Particulars Rs. Particulars Rs. To Direct materials 6,00,000 By Sales 20,00,000 consumed To Direct Labour 4,00,000 To Factory Overheads : 1,00,000 Fixed 1,50,000 Variables To Office overheads 1,80,000 (Fixed) To Selling and dist. o/h: Fixed 60,000 Variable( including 1,50,000 commission on sales @ 5 %) To Net Profit 3,60,000 20,00,000 20,00,000 For the year 2020-21, it is estimated that: (1) Production will be carried out at 60% capacity, of which 90% units will be sold. (2) Direct material cost, labour cost and variable factory overheads will rise by 20%. (3) Factory fixed overheads are expected to go up by rs. 20000. (4) Selling variable cost per unit will be same except commission on sales. The commission on sales will be reduced upto rs. 7 per unit. (5) Selling fixed overheads will be reduced by 10%, whereas office overheads will remain the same. (6) It is determined to get 20% profit on selling price. Prepare: (1) The cost sheet for the year 2019-20. (2) Astatement showing estimated cost and profit for the year 2020-21.

Explain in detail techniques of inventory control. Page 5 of

The Profit and Loss Account of Kashyap Engineering Co. Ltd for the year ending 31st March, 2020 is set out below. Trading and Profit & Loss Account Particulars Rs. Particulars Rs. To Opening stock By sales 26,40,000 (Finished stock 1,44,000 (15,000 units) 1,200 units) To Raw material By closing stock 9,60,000 (Finished stock 2,64,000 consumed 2,200 units) To Direct Wages 4,80,000 To Manufacturing 3,20,000 expenses To Gross Profit C/f 10,00,000 29,04,000 29,04,000 Particulars Particulars Rs. Rs. To Office rent 40,000 By Gross Profit b/f 10,00,000 To Salaries 90,000 To Other administrative 30,000 charges To Selling- 1,80,000 distribution exp. To Net Profit 6,60,000 10,00,000 10,00,000 The company will produce and sell 24,000 units during 2020-'21. The estimates for changes in various items are as follows: (1) Price of material will go up by 20%. (2) In addition to the proportionate increase in the number of workers, 24 new workers will have to be engaged and each of them will be paid 6,000 (six thousand)Pa. (3) Manufacturing expenses will rise in proportion to the combined cost material and wages. (4) The administration expenses per unit will be reduced by 20%. (5) Selling and distribution expenses per unit will go up by rs.1 per unit. (6) The same percentage of profit on selling price is to be maintained. Prepare a cost statement for the year 2020-21 on the basis of the above informatiion.

Write a short note on inventory management. Page 6 of

Mr. Ramesh obtained a contract to build a building the price being ₹ 200,000, Work was started on 1" April, 2021 and the following expenditure was incurred: Plant ₹ 10,000; Stores ₹ 36,000; Wages ₹ 32,500; Misc. exp. ₹ 2,650; Salary ₹ 5,850.Some material was unsuitable and was sold for ₹ 7,250 (cost price ₹ 6,000). Aportion of plant was scrapped and disposed at ₹ 1,150. The value of plant on 31st March, 2022 was ₹ 3,100 and of stores 1,700; 70,000 representing 80% of the work certified. The work uncertified was valued at 10,950 and this was certified later for 12,500. Mr. Ramesh decided to estimate the further expenditure would be incurred in completing the contract to compute from this estimate and the expenditure already incurred. The total profit that would be made on the contract and to take to credit of P & L Account for the year 2021-'22 that portion of the total which = corresponded to the work certified on 31/3/2022. His estimate reveals that contract would be completed after a nine months, till then wages likely to be incurred 37,750, the cost of stores etc. required in addition to these in stock 31/3/2022 would be 34,300, and that further contract expenses would amount to 3,000. Afurther investment of 12,500 would be required on plant which would be valued costly at ₹1,500. The salary would be same on monthly basis, as in the proceeding year. Lastly 2.5% of the total cost of contract should be kept as reserve for contingencies. Prepare Contract Account for the year ended on 31/3/2022, and also show your calculation of the amount credited to profit and loss account for the year.

Write a short note on abnormal loss and normal loss.

Prepare Contract Account from the following information, taking credit for 2/3 profit on cash basis: Particulars Rs. Materials 1,30,000 Wages 1,00,000 Indirect Expenses 50,000 Material on site ( at the close of the year) 10,000 Loss by accident 20,000 Uncertified work 30,000 Cash received ( 90% of work cerified) 3,60,000 Contract price 5,00,000 Sale of scrap 2,000 Sale of Materials ( cost ₹ 5,000) 6,000 Plant 50,000 Residual value of plant at the end of the 30,000 year Page 7 of