Indira Gandhi National Open University (IGNOU) 2006 B.Com Elements of costing - Question Paper

Test Papers / Previous ques. Papers of IGNOU ECO10 Elements of Costing December 2006
Bachelors Degree Programme

Term-End exam
December, 2006

Elective Course: Commerce
ECO10: Elements of Costing
Time : two hours
Maximum Marks : 50 (Weightage 70%)

Note : Attempt any 2 ques. from part A and any 2 ques. from part B.

part A

1. explain any 5 methods of costing and name 2 industries to which every method is applicable. (10)

2. (a) elaborate the main advantages of a good system of material control ?

(b) What is labour turnover ? How can labour turnover be minimised ? (5, 5)

3. Write short notes on any 2 of the subsequent : (5, 5)

(a) Perpetual Inventory System
(b) Apportionment of Overheads
(c) Contract Costing
(d) Rowan Premium Plan

SECTTON B

4. (a) compute (i) Minimum stock level and (ii) Maximum stock level, from the subsequent info :

Re-order level 2,400 units
Re-order volume 1,500 units
Maximum consumption 400 units per week
Re.onder period four to six weeks
Minimum consumption 250 units per week
Normal consumption 300 units per week

(b) From the subsequent info calculate a machine hour rate for the month of June, 2005 :

Cost of machine Rs. 32,000
Estimated Scrap Value Rs. 2,000
Reparrs over the life period Rs. 2,500
Standing charges for the month Rs. 400.

Power consumed during the month @ Rs. 0.30 per unit Rs. 600. The machine consumes 10 units of power per hour. Effective working life 10,000 hours. (8, 7)

5. The subsequent figures are extracted from the books of the firm. Prepare the departmental overhead summary

Item Production Depts. Service Depts.
A B C X Y
Direct Wages(Rs.) 900 600 900 900 700
Light points 20 30 40 20 10
Floor space (sq.ft.) 400 500 600 400 100
HP of the machines 75 30 25 10 -
Value of machinery (Rs.) 12,000 16,000 20,000 1,000 1,000

The expenses for the period were :

Item Rs. Item Rs.
Rent 2,000 Indirect wages 600
Power 600 Depreciation 4,000
Lighting 240 Other expenses 4,000

Apportion the expenses of service department Y according to direct wages and those of service department X in the ratio of five : three : two to the production departments. (15)

6. (a) From the subsequent information, prepare Process Accounts :

Process A Process B
Other materials (Rs.) 12,000 6,000
Direct Labour (Rs.) 14,000 8,000
Direct Expenses (Rs.) 4,000 4,000
Output (units) 9,400 8,300
Normal wastage (rate) 5% 10%

10,000 units of raw materials @ Re. one per unit were introduced in process A. The scrap value of wastage (normal) in process A is Rs. eight per 100 units and in process B is Rs. 10 per 100 units.

(b) discuss LIFO method of pricing the problem of materials with an example. (10, 5)

Earning:   Approval pending.