IIND INTERNAL EXAMINATIONS: OCTOBER-2025
BCOM III SEMESTER
SCHEME OF VALUATION
Subject Name: FUNDAMENTALS OF COSTING Date: 17-10-2025
Subject Code: COM- 3.3 Time:1h 30mins
Maximum marks: 40
SECTION-A
Answer any 5 questions out of Seven questions. Each question carries 2 Marks (5X2=10 Marks)
1. What is EOQ?
Answer:- EOQ, or Economic Order Quantity, is a formula that determines the optimal order size for
materials to minimize total inventory costs, balancing holding costs (storage, insurance) with ordering costs
(administrative fees, supplier charges).
The EOQ formula is calculated as the square root of [(2 * D * S) / H], where D is annual demand, S is the
cost per order, and H is the annual holding cost per unit.
2. What is VED Analysis?
Answer- VED analysis is an inventory management technique that classifies items as Vital, Essential, or
Desirable based on their criticality to business operations. It helps businesses prioritize items to optimize
inventory levels, minimize disruptions, reduce costs, and improve resource allocation by ensuring that vital
items receive the highest stock availability and management focus.
3. List the Documentation involved in materials accounting?
Answer- Tax Invoice, Delievery Challan, Debit Note, Credit Note
4. What do you mean by tender & quotation?
Answer- A tender is a formal, competitive bidding process initiated by a buyer for large, complex projects,
where suppliers submit detailed proposals that are evaluated on price, quality, and capability. A quotation,
in contrast, is a less formal, fixed price offer for smaller, straightforward projects, usually in response to a
Request for Quotation (RFQ) and primarily evaluated on price
5. List the items included in financial accounts but not in cost accounts?
Answer- Purely financial charges:-These are expenses that do not relate to manufacturing or the cost of
producing goods and services.
Interest paid on loans, mortgages, and debentures
Loss on the sale of fixed assets or investments
Preliminary expenses, underwriting commissions, or discounts on shares and debentures that have
been written off
Expenses of the company's share transfer office
Cash discounts allowed
Fines and damages paid
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Purely financial incomes:-These are revenues not generated from core business operations.
Interest and dividends received on investments
Profit on the sale of fixed assets or investments
Rent received
Share transfer fees received
Transfer fees received
Appropriation of profits :-Cost accounts are not concerned with how a company's profits are distributed.
These items are recorded in the financial profit and loss appropriation account.
Income tax paid
Dividends paid
Transfers to reserves
Charitable donations
Abnormal items:-These are unexpected gains or losses that are not part of regular operations and are
typically excluded from cost accounts to avoid distorting the true cost of production.
Abnormal idle time
Cost of abnormal wastage of materials
Bad debts that are exceptional in nature
6. What are the Methods of Reconciliation?
Answer- Reconcilation Statement and Memorandum reconciliation account
7. Expand GEM ,CPP,LIFO,FIFO?
Answer
GEM- GOVERNMENT MARKET PLACE
CPP-CENTRAL PUBLIC PROCUREMENT
LIFO –LAST IN FIRST OUT
FIFO –FIRST IN FIRST OUT
SECTION-B
Answer any two questions out of four questions. Each question carries 8 Marks (2X8=16 Marks)
8.
2
9.
3
10.
11. Write a Short Note on E- Procurement , GEM Portal, CPP portal
Answer- E-Procurement
E-procurement, or electronic procurement, is the process of purchasing goods and services online. It
digitizes the workflow, allowing businesses and government agencies to manage transactions like bids,
purchase orders, and payments through digital networks like the internet. The goal is to make the entire
procurement lifecycle—from sourcing and tendering to contract management and invoicing—more
transparent, efficient, and cost-effective.
Key features and benefits of e-procurement include:
Increased efficiency: E-procurement automates repetitive, manual tasks, reducing paperwork, processing
time, and the potential for human error.
Enhanced transparency: By operating online, e-procurement platforms create clear audit trails and make
procurement information easily accessible to all stakeholders.
Cost savings: Automation and increased competition lead to more competitive pricing and lower transaction
costs for organizations.
Wider market access: It eliminates geographical barriers, giving buyers access to a broader range of
suppliers and a larger selection of products and services.
Improved compliance and control: E-procurement systems can enforce purchasing policies and track
spending in real-time, reducing off-contract or "maverick" spending.
Government e-Marketplace (GeM)
The Government e-Marketplace (GeM) is an Indian online platform specifically for public procurement of
common-use goods and services. Launched in 2016 by the Ministry of Commerce and Industry, GeM's main
objective is to enhance transparency, efficiency, and speed in government purchasing. It serves all Central
and State Government departments, Public Sector Undertakings (PSUs), and autonomous bodies.
Key aspects of the GeM portal include:
Purpose: The platform replaces traditional manual procurement with a paperless, cashless, and automated
system. The General Financial Rules of 2017 mandate that government entities must use the GeM portal to
procure available goods and services.
Features: GeM includes features like:
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E-bidding and reverse e-auction: This ensures competitive and transparent pricing.
Demand aggregation: Allows various departments to pool their demand for bulk purchasing, leading to
better prices.
Vendor verification: The system automatically verifies sellers' credentials through databases like PAN and
Aadhaar, ensuring security and due diligence.
Impact: GeM has driven significant cost savings for the government and provided a level playing field for
sellers, especially for Micro, Small, and Medium Enterprises (MSMEs), by lowering market entry barriers.
Central Public Procurement Portal (CPP Portal)
The Central Public Procurement (CPP) Portal is another online platform by the Government of India that
centralizes and standardizes the tendering process. It focuses primarily on the publication of tender inquiries,
corrigenda (amendments), and contract award details.
Key aspects of the CPP portal include:
Purpose: The portal is designed to provide a single-point access to information on procurements across
various ministries and departments. It provides a secure, web-based system for the entire tendering process,
from publishing to online bid submission and evaluation.
Features:
e-Publishing: Allows government departments to publish tender notices online for free public access.
e-Procurement: Provides a secure system for bidders to submit bids electronically using Digital Signature
Certificates (DSCs).
Transparency: Makes tender documents, bid details, and contract award information publicly accessible.
SECTION-C
Answer any one questions out of Three questions. Each question carries 14 Marks (1X14=14 Marks)
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