University of Delhi 2005-3rd Year B.Com Costing External Correspondence Year 2006 : Part I - Question Paper

Q. 1. discuss the following:
(1) Cost centre;
(2) Features of Job Costing;
(3) Fixed and Variable Costs;
(4) Direct and Indirect Expenses.

Q. 2. (a) What do you mean by normal and abnormal idle time ? How would you deal idle time in Cost Accounting ? 10
(b) From the subsequent info prepare Store Ledger Account as per LIFO and FIFO method: 10
Jan.1-2003 - Received - l,000Units - @Re.lperunit
Jan. 10-2003 - Received - 260 Units - @ Rs. 1.05 per unit
Jan. 20- 2003 - Issued - 700 Units-
Jan. 21-2003 - Received - 400 Units - @Rs. 1.15 per u
Jan. 22-2003 - Received - 300 Units - @ Rs. 1.25 per unit
Jan. 23- 2003 - Issued - 620 Units-
Jan. 24-2003 - Issued - 240 Units-
Jan. 25-2003 - Received - 500 Units - @ Rs. 1.10 per unit
Jan. 26-2003 - Issued - 380 Units

Q. 3. (a) What do you mean by Inventory Control ? elaborate its techniques ? explain briefly ABC system of Inventory Control. 10
(b) compute machine hour rate from the subsequent info : Wages of operator incharge of 2 machines Rs. 6,000 per year.
Rent and rates for four machines Rs. 3,000 per year.
Lighting Rs. 250 per month.
Insurance of machines Rs. 200 per quarter.
Repair Rs. 250 per month.
Supervisor’s salary Rs. 500 per month.
Power consumption of machine: 20 units per hour @Rs. one per 100 units.
Factory overhead for the shop: Rs. 4,000 per year.
Machine cost Rs. 90,000
Scrap value: 5% of purchase price.
Life of the machine 19 yea rs.
Machine runs for 1,500 hours per annum.

Q. 4. (a) From the subsequent data, compute Break-even point in Units. What will be the BEP if selling price is decreased by 10% ?
Fixed expenses:
Depreciation - Rs. 1,00,000
Salaries - Rs. 1,00,000
Variable exp. :
Material - Rs. three per unit
Labour - Rs. two per unit
Selling price - Rs. 10 per unit
(b) From the subsequent information, reconcile the profit as per cost accounts with financial accounts:
Cost A/c Rs Financial A/c Rs
Profit - 86,250
Opening Stock:
Material - 10,500 - 10,300
Work-in-progress - 8,500 - 8,000
Closing Stock:
Material - 14,200 - 15,000
Work-in-progress - 6,000 - 5,600
Dividend and interest received Rs. 600. Loss on sale of investment Rs. 1,000. Interest charged by the bank not considered in Financial Accounts and Cost Accounts Rs. 1,500. Goodwill written off during the’year Rs. 2,500. Preliminary expenses written off Rs. 3,000.
Overhead incurred Rs. 40,000. Overhead absorbed in Cost Accounts Rs. 38,500. obtain out profit as per Financial Accounts.

Q. 5. (a) describe normal loss, abnormal loss and abnormal gain. How these are treated in Cost Accounts ? 10
(b) What do you mean by labour turnover ? How is it measured ? What measures would you suggest for reducing labour turnover ?

Earning:   Approval pending.