Loyola College B.Com April 2012 Cost Accounting Question Paper PDF Download








Date : 27-04-2012              Dept. No.                                        Max. : 100 Marks

Time : 9:00 – 12:00



Answer ALL Questions:                                                                                           (10×2=20 Marks)


  1. What is Reorder Level?
  2. What is Batch Costing?
  3. Write a short note on Escalation clause.
  4. What is By – Products.
  5. State whether True or False
  6. Unit costing is applied in those industries where different products are produced simultaneously
  7. In the cement industries the unit of cost is per tonne.


  1. Calculate the re-order quantity from the following particulars:

Annual usage                                …30,000 units

Buying cost per order                   …Rs.15

Cost per Unit                                …Rs.100

Cost of carrying inventory            …10% of cost


  1. The firm employs 5 workers at an hourly rate of Rs.25/- During the week they worked for 4 days for a total period of 40 hrs each and completed a job for which the standard time was 48 hrs for each worker. Calculate the labour cost, under Rowan method.


  1. What is machine hour rate?
  2. A transport service company is running five buses between two towns which are 60 Kms.

apart. Seating capacity of each bus is 35 passengeres. Actual passengers carried were 80% of

the seating capacity. The company operates for 25 days a month. Each bus made two round

trips per day. Calculate the total passengers kms for the month.


  1. What are the bases for apportionment of expenses given below to the different departments?
  2. i) Rent & Rates ii)  Supervisory wages   iii) Depreciation    iv) General lighting.


Answer any FIVE questions:                                                                                   (5×8=40 Marks)

  1. From the following particulars, prepare a Cost Statement showing the components of Total Cost and

Profit for the year ended 31st December 2006.

1-1-2006 31-12-2006
Rs. Rs.
Stock of finished goods 6,000 15,000
Stock of raw materials 40,000 50,000
Work-in-progress 15,000 10,000




Rs.   Rs.
Purchase of raw materials 4,75,000 Sales for the year 8,60,000
Carriage inward 12,500 Income tax 500
Wages 1,75,000 Dividend 1,000
Works Manager’s salary 30,000 Debenture interest 5,000
Factory employees’ salaries 60,000 Transfer to Sinking Fund for replacement of machinery 10,000
Factory rent, taxes and insurance 7,250
Power expenses 9,500 Goodwill written off 10,000
Other production expenses 43,000 Payment of sales tax 16,000
General expenses


32,500 Selling expenses 9,250
  1. P Ltd. Uses three types of materials A,B and C for production of ‘X’ the final product. The relevant monthly data for the components are as given below:
A B  
Normal usage (units) 250 175
Minimum usage (units) 100 100
Maximum usage (units) 300 250
Reorder quantity (units) 750 900
Reorder period (months) 2 to 3 3 to 4
Calculate for each component:-
a)      Reorder level; b)      Minimum level;
c)      Maximum level and d)      Average stock level


  1. Distinguish between Taylor’s Differential Rate and Emerson Efficiency Plan.


  1. The following particulars relate to a new machine purchased:


Purchase price of the machine      4,00,000
Installation expenses      1,00,000
Rent per quarter          15,000
General lighting for the total area            1,000 Per month
Foreman’s salary          30,000 Per annum
Insurance premium for the machine            3,000 Per annum
Estimated repair for the machine            5,000 Per annum
Estimated consumable stores            4,000 Per annum
Power – 2 units per hour at Rs.50 per 100 units.

The estimated life of the machine is 10 years and the estimated value at the end of the 10th year is

Rs.1 lakh. The machine is expected to run 20,000 hours in its life time. The machine occupies

25% of the total area. The foreman devotes 1/6th of his time for the machine. Calculate the

machine hour rate for the machine.


  1. From the following data prepare a reconciliation statement.      Rs.

Profit as per cost accounts                                                                        1,50,000

Works overheads under-recovered                                                  10,000

Administrative overheads under-recovered                                     22,500

Selling overheads over-recovered                                                    18,500

Overvaluation of opening stock in cost accounts                            16,000

Overvaluation of closing stock in cost accounts                                7,000

Interest earned during the year                                                          4,250

Rent received during the year                                                          27,000

Bad debts written off during the year                                               8,500

Preliminary expenses written off during the year                            17,000




  1. Prakash Transport company has been given a route 20 km. long to run a bus. The bus costs the

company a sum of Rs.50,000. It has been insured at 3% p.a. and the annual tax will amount to

Rs.1,000. Garage rent is Rs.100 p.m. Annual repairs will be Rs.1,000 and the bus is likely to last

for 5 years.

The driver’s salary will be Rs.2,500 p.m. and the conductor’s salary will be Rs.1,500 p.m. in

addition to 10% taking as commission (to be shared by the driver and the conductor equally).

The cost of stationery will be Rs.100 p.m. Manager-cum-Accountant’s salary is Rs.3500 p.m.

Petrol and oil will be Rs.25 per 100 km. the bus will make 3 round trips carrying, on an average,

40 passengers on each trip. Assuming 15% profit on takings, calculate the bus fare to be charged

from each passenger. The bus will run on an average 25 days in a month.


  1. Prepare a Stores Ledger Account from the following details using LIFO method of pricing the issue of


April 1 Opening Balance 10,850 kgs @ Rs.130.00 per kg
2 Purchased 20,000 kgs @ Rs.134.00 per kg
3 Issued   6,750 kgs to production
5 Issued   8,500 kgs to production
6 Received back      550 kgs from production

being surplus

7 Purchased 17,550 kgs @ Rs.128.00 per kg
8 Issued 11,250 kgs to production
9 Physical stock verification revealed a loss of      250 kgs
10 Issued   8.950 kgs to production
12 Issued   6.300 kg. to production
15 Purchased 10,000 kgs @ Rs. 132.00 per kg
16 Issued   7,750 kgs to production
  1. Write short notes on:
  2. a)    Perpetual Inventory system.
  3. b) ABC analysis.



Answer any TWO questions:                                                                                   (2 x 20 = 40 marks)


  1. Trichy Limited has three production departments (A,B and C) and two service departments (D and E).

From the following figures extracted from the records of the company, calculate the overhead rate per

labour hour using Repeated Distribution method.



Indirect materials 15,000
Indirect wages 10,000
Depreciation on machinery 25,000
Depreciation on building 5,000
Rent, Rates and taxes 10,000
Electric power machinery 15,000
Electric power for lighting 500
General expenses 15,000
Items Total A B C D E
Direct materials Rs.60,000 20,000 10,000 19,000 6,000 5,000
Direct wages 40,000 15,000 15,000 4,000 2,000 4,000
Value of machinery  2,50,000 60,000 1,00,000 40,000 25,000 25,000
Floor area (sq.ft.) 50,000 15,000 10,000 10,000 5,000 10,000
H.P. of machinery 150 50 60 30 5 5
No. of light points 50 15 10 10 5 10
Labour hours 15,000 5,000 5,000 2,000 1,000 2,000
The expenses of service departments D and E are to be apportioned as follows:
D 40 20 30 10
E 30 30 30 10


  1. The following information is available in respect of a contract undertaken by a building contractor in 2000. The contract was for Rs.2,40,000


Materials used 45,000
Wages paid 66,000
General charges 2,400
Plant installed at site on 1st July 2000 12,000
Materials in hand at the end 2,400
Wages accrued due 2,400
Work certified 1,20,000
Work completed but not certified 3,000
Cash received 90,000
Materials transferred to other contracts 2,400
Materials received from other contracts 600


Depreciation on plant is to be provided at 10% per annum. Prepare Contract Account and show what

part of the profit on contract should be taken to credit in 2000.


  1. The product of company passes through three distinct processes to completion. They are known as A,B and C. from past experience it is ascertained that loss is incurred in each process as: Process A-2%, Process B-5%, Process C-10%. In each case the percentage of loss is computed on the number of units entering the process concerned. The loss of each process possesses a scrap value. The loss of processes A and B is sold at Rs. 5 per 100 units and that of process C at Rs.20 per 100 unts. The output of each process passes immediately to the next process and the finished units are passed from process C into stock.
Process A Process B Process C
Rs. Rs. Rs.
Materials consumed 6,000 4,000 2,000
Direct Labour 8,000 6,000 3,000
Manufacturing expenses 1,000 1,000 1,500

20,000 units have been issued to process A at a cost of Rs.10,000. The output of each process has been

as under: Process A 19,500; Process B 18,800; Process C 16,000. There is no work-in-progress in any



Prepare Process Accounts. Calculations should be made to the nearest rupee.



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Loyola College B.Com Nov 2012 Cost Accounting Question Paper PDF Download








Date : 03/11/2012             Dept. No.                                        Max. : 100 Marks

Time : 9:00 – 12:00



Answer ALL questions:                                                                                           (10×2=20 marks)


  1. Mention 2 reasons why profits as per cost accounts and financial accounts differ.
  2. How is idle time cost treated in cost accounts?
  3. What is an escalation clause in a contract agreement?
  4. What is a machine hour rate?
  5. True or False
  6. When actual loss is less than anticipated loss the difference is abnormal gain.
  7. I.F.O method will show more profit when material prices are falling.


  1. Compute the economic batch quantity for a company using batch costing with the following information:

Annual demand for the component                                                        24,000

Set-up cost per batch                                                                     Rs.               120

Carrying cost per unit of production                                        Rs.              0.36


  1. From the following data calculate minimum level for material X

Delivery time                     2 to 4 weeks

Consumption                     100 to 150 units per week


  1. A taxi runs for 4000 kilometers per month of which 20% is run empty. The total expenses for the month is Rs.25,500. Calculate the cost per kilometre.


  1. From the following data provided to you calculate Labour Turnover under Flux method.

No. of workers on the payroll:

At the beginning of the month                  500

At the end of the month                              600

During the month, 5 workers left, 20 persons were discharged and 75 workers were recruited. Of these, 10 workers were recruited in the vacancies of those leaving, while the rest were engaged for an expansion scheme.


  1. From the following calculate the value of raw material consumed:

Raw materials purchased Rs.88,000

Opening stock of raw materials Rs.1,00,000

Freight and purchases Rs.5,500

Sale of material scrap Rs.2,000

Closing stock of raw materials Rs.1,23,500







Answer FIVE questions only:                                                                                     (5×8=40 marks)


  1. Define Overheads. Distinguish between allocation, apportionment and absorption of overheads.


  1. Write short notes on:
  2. Taylor’s Differential Piece rate system.
  3. Opportunity cost
  4. Joint and By-products
  5. Labour Hour rate.


  1. The information given below has been taken from the cost records of a factory in respect of Job No.707:

Direct material                                  Rs.4,010

Wage details:

Department A:  60 hours @ Rs.3 per hour

Department B:   40 hours @ Rs.2 per hour

Department C:   20 hours @ RS.5 per hour

The variable overheads are as follows:

Department A:   Rs.5,000 for  5,000 hours

Department B:   Rs.3,000 for 1,500 hours

Department C:   Rs.2,000 for 500 hours

Fixed expenses estimated at Rs.20,000 for 10,000 working hours. Calculate the cost of the Job No.707 and the price for the Job to give a profit of 25% on the selling price.


  1. A workman’s wage for a guaranteed 44 hour is Rs.10 per hour. The estimated time to produce one article is 30 minutes and under incentive scheme the time allowed is increased by 20%,. During one week the workman manufactured 100 articles. Calculate the gross wages under each of the following methods of remuneration:
  2. Time-rate
  3. Piece work with a guaranteed weekly wage
  4. Rowan premium bonus
  5. Halsey premium bonus, 50% to workman.


  1. A Ltd prices issues under F.I.F.O method. From the following prepare the Stores Ledger for the month of October 2012:

October 1             Opening balance 500 units at Rs.2 per uni

6th                           Issued 250 units

13th                         Received 200 units at Rs.1.90 per unit

15th                         Returned from Department 15 units out of the issues on 6th

20th                         Issued 180 units

22nd                        Received 240 units at Rs.1.80 per unit

29th                         Issued 300 units

On 30th October  the stock verifier found a shortage of 10 units.


  1. M/s. Kishore & Co. Commenced the work on a particular contract on April 1, 2011. They close their books of accounts for the year on December 31, each year. The following information is available from their costing records on December 2011.

Material sent to site                       Rs.50,000

Wages Paid                                         Rs.1,00,000

Foreman’s salary                              Rs.12,000

A machine costing Rs.32,000 remained in use on site for 1/5th of the year. Its working life was estimated at 5 years and scrap value at Rs.2,000. A supervisor is paid Rs.2,000 per month and had devoted one half of his time on the contract.

All other expenses were Rs.15,000. The material on site were Rs.9,000. The contract price was Rs.4,00,000. On December 31, 2011, 2/3rd of the contract was completed; however, the architect gave certificate only for Rs.2,00,000 on which 75% was paid.

Prepare the Contract Account.


  1. Raj Motors owns a bus which cost Rs.3.80 lakhs. The bus has a life of 5 years and a scrap value of Rs.20,000 at the end of its life. The bus runs between two towns which are 100 kms apart. It makes two round trips a day and operates for 30 days in a month. It has a capacity of 50 passengers and the average occupancy is 80%. Other details are as follows:

Driver’s wages : Rs.9000 per month

Conductor’s wages : Rs.7000 per month

Garage rent : Rs.2000 per month

Office expenses : Rs.7000 per month

Taxes and insurance : Rs.12000 per annum

Repairs : 80% of depreciation

Diesel : Rs.5 per km

Sale of old tyres and tubes : Rs.800 per month

Calculate the operating cost per passenger kilometre.


  1. A Company’s records show the following particulars for a department for the year 2011 for production and sales of 100 units.


Materials Rs.14,000; Direct Labour Rs.7,000; Works Overheads Rs.7,000; Administration overheads Rs.2,800; Selling overheads Rs.3,200; Profit Rs.6,000.

You ascertain that 40% of the works overheads fluctuate directly with production and 70% of the selling overheads fluctuate with sales.  It is anticipated that the department would produce 500 units per annum in the year 2012 and that direct labour charges per unit will be reduced by 20%, while fixed works overheads will increase by Rs.3,000. Administration overheads and fixed selling overheads are expected to show an increase of 25% but otherwise no changes are anticipated.

Prepare a statement of Cost and Profit in 2012, if the Company wants a profit of 20% on cost.




Answer ANY TWO questions:                                                                                                                  (2×20=40 marks)


  1. From the following details of Small Tools Ltd compute profit in Financial Accounts as well as in Cost Accounts and prepare a statement reconciling the two profits:

Rs.                                                                                                          Rs.

Sales                                        20,000             Bad debts                                            100

Purchase of materials                3,000             Interest on overdraft                             50

Closing stock of materials            500             Profit on sale of assets                                    1,000

Direct wages                             1,000             Selling expenses                                  3,000

Indirect wages                                         500

Power                                        2,000

In Cost accounts:

Manufacturing overhead recovered @ 300% on direct wages.

Selling overhead  recovered Rs.2,200




  1. From the following data, calculate:
  2. Equivalent production
  3. Cost per unit of equivalent production and also prepare Process A account.

No. of units introduced in the process                                                4000 nos.

No. of units completed and transferred to Process B                         3200 nos.

No. of units in process at the end of the period                                   800 nos.

Stage of completion:

Material                                   80%

Labour                                     70%

Overheads                               70%

Normal process loss at the end of the process            5% of input

Value of scrap                                                             Re.1 per unit

Value of raw materials                                                Rs.7,480

Wages                                                                         Rs.10,680

Overheads                                                                   Rs.7,120


  1. A Company has 3 production departments A, B and C and two service departments P and Q. The following data are extracted from the records of the company for a particular given period:

Rent and rates                                                  Rs.25,000

General lighting                                                                Rs.3,000

Indirect wages                                                  Rs.7,500

Power                                                                   Rs.7,500

Depreciation on machinery                         Rs.50,000

Sundries                                                              Rs.50,000

Additional data, department-wise




Direct wages (Rs)

Horsepower of machine Cost of machinery (Rs)

Production hours worked

Floor space used (Sq.Mt)

Lighting points (nos)

Total Production dept. Service dept.
  A B C P Q










































Service department’s expenses allocation:

A                             B                             C                             P                             Q

P                             20%                        30%                        40%                        –                              10%

Q                             40%                        20%                        30%                        10%                        –

You are required to:

  1. Compute the overhead rate per hour for production departments using the repeated distribution method; and
  2. Hence, determine the total cost of Job 127 whose direct material cost and direct labour cost are respectively Rs.250 and Rs.150 and which would consume 4 hours, 5 hours and 3 hours in departments A, B and C respectively.

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