Cost Accounting

UG/CBCS/B.Com./Hons./4th Sem.
/Commerce/COMCC8/2022
UNIVERSITY OF NORTH BENGAL

B.Com. Honours 4th Semester Examination, 2022
CC8-COMMERCE
COST ACCOUNTING
Time Allotted: 2 Hours Full Marks: 60
The figures in the margin indicate full marks.

All symbols are of usual significance.
GROUP-A
Answer any two questions 12×2 = 24
1. Examine the need and importance of Cost Accounting with reference to the 9+3
inadequacies of Financial Accounting. Do you think that Cost Accounting has
no limitations?
2. (a) X Ltd. produces a product which has a monthly demand of 4,000 units. The 3+6
product requires a component „X‟ which is purchased at `20 per unit. For every
finished product, one unit of component „X‟ is required. The ordering cost is
`120 per order and the holding cost is 10% per annum.
Calculate:
(i) Economic Order Quantity
(ii) If the minimum lot size to be supplied is 4,000 units, what is the extra cost
to the company?
(b) Calculate Re-order Level, Maximum Level and Minimum Level from the 3
following information:
Re-order Quantity 1,500 units
Re-order Period 4 to 6 weeks
Maximum Consumption 400 units per week
Minimum Consumption 200 units per week
3. The product of a company passes through three distinct processes to 12

completion. They are known as A, B and C. From the 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 `5 per 100 units and that of Process C at `20 per 100 units. The output
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UG/CBCS/B.Com./Hons./4th Sem./Commerce/COMCC8/2022
of each process immediately passes to the next process and the finished units
are passed from Process C into stock
Process A Process B Process C
(`) (`) (`)
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 `0.50 per unit. The
output of each process has been as under:
Process A- 19,500 units; Process B- 18,800 units; Process C- 16,000 units.
There is no work-in-progress in any process.
Prepare Process Accounts.
4. A construction company undertook a contract at an estimated price of `108 12

lakhs, which includes a budgeted profit of `18 lakhs.
The relevant data for the year ended 31/03/2022 are as under:
Materials issued to site `50,00,000
Direct wages paid `38,00,000
Plant hired charges `7,00,000
Site office costs 2,70,000
Material returned from site 1,00,000
Direct expenses 5,00,000
Works certified 100,00,000
Progress Payment Received 72,00,000
A special Plant was purchased for this contract at `8,00,000 and after use on
the contract till the end of 31/03/22 it was valued at `5,00,000. The cost of
materials at site at the end of the year was estimated at `18,00,000. Direct
wages accrued as on 31/03/22 was `1,10,000.
Prepare a Contract Account for the year ended 31st March, 2022 and compute
the profit to be taken to Profit & Loss Account.
GROUP-B
5. Answer any four questions: 6×4 = 24
(a) How does fixed overheads differ with variable overheads and semi-variable 6
overheads. Show with numerical examples.
(b) The following were the information extracted from a factory: 1+1+2+2
Weekly working hours 48
Hourly wage rate `7.50
Piece Rate per unit `3.00
Normal time taken per piece 24 minutes
Normal output per week 120 pieces
Actual output for the week 150 pieces
Differential Piece Rate 80% of piece rate when output is
below normal and 120% of the piece
rate when output is above normal
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UG/CBCS/B.Com./Hons./4th Sem./Commerce/COMCC8/2022
Calculate earning of the worker for that week under:

(i) Straight Piece Rate
(ii) Differential Piece Rate
(iii) Halsey Premium Scheme (50% sharing)
(iv) Rowan Premium Scheme.
(c) Briefly discuss the items to be considered for addition and deduction from 6
profit as per Cost Accounts to arrive at the profit as per Financial Accounts.
(d) How does a Bin Card differ from a Stores Ledger? 6
(e) Mention the drawbacks of Piece Rate System of wage plan. 6
(f) How be Normal Loss, Abnormal Loss and Abnormal Gain treated in Process 6
Costing?
GROUP-C
6. Answer any four questions: 3×4 = 12

(a) Distinguish between Time Study and Motion Study. 3
(b) What are the causes of Labour Turnover? 3
(c) Write a note on “Cost Plus Contract”. 3
(d) What are the causes of idle time? 3
(e) Will you consider the following items in Cost Statement? 3
(i) Income Tax (ii) Interest on Bonds
(f) What are the examples of carrying cost in the determination of Economic Order 3
Quantity?
——×——
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UG/CBCS/B.Com./Hons./4th Sem.

UNIVERSITY OF NORTH BENGAL

The figures in the margin indicate full marks.

3. The product of a company passes through three distinct processes to 12

4164 1 Turn Over

4. A construction company undertook a contract at an estimated price of `108 12

Calculate earning of the worker for that week under:

6. Answer any four questions: 3×4 = 12

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