. [This question paper contains 20 printed pages.

]
Your
, Sr. No. of Question Paper 506

. Unique Paper Code 22411401

Name of the Paper Cost Accounting

Name of the Course B.Com. (H) CBCS

Semester IV

Duration : 3 Hour Maximum Marks : 7 5

Instructions for Candidates

1. Write your Roll No. ori the top immediately on receipt of this question paper.

2. Attempt ~II questions.

3. All questions carry equal marks.

4. Use of simple calculator is allowed.

5. Answers may be written either in English or Hindi; but the same medium should
be used throughout the paper.

2. ri ~~ I

4. ~I ft('!<ti~C:~ ~ cfiT ~ t I

s. ~ ~ -~ qif ~ aroiilt~ ~ ~~ \ll'ff ~~ . ~ ~~ qif 1{ftWr ~ tt m

~I

PTO.
506 2

1. (a) Can Cost Accounting be used as a substitute system for Financial

Accounting? (8)

.
.
. .

(b) A company buys in lots of 12,500 .

boxes which is a three months' supply.
The cost per box is n25 and the ordering cost is ~250 per order. The
. inventory carrying cost is estimated at 20% of unit value per annum. You are
required to ascertain:

(i) the total annual cost of existing inventory policy, and

(ii) the amount saved by employing the policy of buying economic order
quantity. (7)

OR

(a) Differentiate between any four of the following :

(i) Out of pocket cost and Sunk cost

(ii) Selling costs and Distribution costs

(iii) Purchase requisition and Material requisition

(iv) Bin card and Stores ledger card

(v) Scrap and Spoilage· (8)

· (b) A supplier quoted the following prices for material R:

Lot size Price per kg

200 kgs or more but less than 500 kgs ~ 10

500 kgs or more. butless than 800 kgs ~7

800 kgs or more ~5
 506
3
.. He allowed ·a trade discount of 25%. In addition, he offered a cash discount
of 5%, if payment.is made within 15 days. Every container, with a capacity
of 100 kilograms of material was charged at ~30 but was credited at ~20
on return. The buyer decided to buy 800 kilograms. Transport charges
amounting to ~400 were to be borne by the buyer, while the supplier agreed
to bear insurance charges of ~200.

Normal loss (scrap) of 5% of the quantity received is expected during storage.

The unit price per kg of scrap is ~2. Calculate

(i) Purchase price per kilogram.

(ii) Issue price per kg of material R.

(7)

2. (a) How is overtime premium dealt with in Cost Accounts? How can overtime
be controlled? (5)

(b) From the following information relating to a workshop with 5 machines of

exactly similar type, compute Machine Hour Rate :

Rent & Rates (proportional to floor space occupied) for the shop ~48,000 p.a.
Depreciation on each machine n0,000 p.~.
Expected repair and maintenance cost for the 5 machines for the year f 15,000

Power consumed @ W.50 per unit for the shop for the year ~50,000
Electricity charges for the shop for the year ~ 15,000
Sundry supplies such as lubricants etc. for the shop ~1,000 p.m.
Hire purchase Installment payable for the machines
(including ~5,000 interest) n5,ooo p.a.
Besides the above expenses, 2 attendants for 5 machines are paid ~ 12,000
p.m. each and the shop supervisor is paid a monthly salary of ~30,000.
The machine uses IO units of power per hour. (10)

OR

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506
4 ...
The following figures have been extracted from the accounts of a manufacturing
concern for the month of December, 2022 :

Production departments Service Departments

' p (t.) Q (t.) R·(f.) X (f.) y (f.)

40,000 60,000 48,000 2,000 .800

Direct Material
32,000. 40,000 36,000 1,500 1,000
Direct Labour
3,800 4,800 800 6,000 1,600
Indirect Material
3,600 4,400 · 1,200 4,000 2,600 ·
Indirect Labour

Other expenses of the plant are :

_ Power· and light <24,000

Rent and rate <11,200

Insurance on assets <4,000

Meal charges r iz.oon

Depreciation 6% per annum on capital value o·f assets

The following further details are available :

Production departments Service Departments

p (f.) Q (f.) R (f.) X (t.) y (t.)
4,000 3,000 2,000 1,000
Area (sa ill 4,000
Capital value of assets 10,00,000 12,00.000 8,00,000 6,00,000 4,00.000
4,000 4.400 1,600 1.500 500
Kilowatt hours
90 120 30 40 20
No. of employees
Direct labour hours 3,600 3,200 2,200

You are required to :

· (i) Apportion the cost 0f service departments using Simultaneous Equations__

Method, if their expenses are to be apportioned a_s under :
 506
5

p 0 ·R y
X
X 30% 40% 20%
y 10%
10% 20% 50% 20%

(ii) What will be the total cost of an article, if its raw material cost is ~500,
direct labour cost noo
and it passes through departments P, Q and R for
_( 5 and 3 hours respectively. (15)

3. (a) What are the differences between Job Costing and Contract Costing?

(5)
(b) Prepare Cost Sheet from the following information relating to XYZ Company :

Units produced
20,000
Units sold
16,000
Direct material cost per unit eroo
. Direct labour cost
I 0,000 hours @ ~80 per hour

Expenses paid for materials purchase :

Cartage eis.ooo
Insurance ~5,000
GST eio.ooo .
Cost of electrical utilities n,00,000
. l
Royalty paid per unit of sale no
· Manufacturing Overheads n,10,000
Interest on loan for purchase of machine . ~25,600
Penalty for violating patent ~10,000
Repair and maintenance ~25,000
Realization from scrap . eis.ooo
Primary packing ~40,000

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 6
506 •
t25,000
Secondary packing
Incentive received from the State Government t50,000
Supervisor's salary t80,000

(314th time devoted in administrative work

relating to production)
ns per unit (10)
Sales promotion and other selling expenses

OR

An operator, Mr. X, runs a 50-seater bus as per the following schedule :

Distance No. of days run Seating capacity

Route (one way) per month occupied

300 Kms. 10 80%

Delhi to Jaipur and back, the same day

100 Kms. 10 90%

Delhi to Meerut and back, the same day

For 5 days in a month, the bus operates locally covering 120 km daily at full
capacity. Following are the other details :
<21,00,000
Cost of the bus
2,00,000 kilometres
Life of the Bus
Salvage value of bus at the end ofusefullife? 3,00,000

Salary of the driver per month no.ooo

Salary of the conductor per month <9,000
t30,000 per annum
Insurance of the bus
6 kms per litre@ t60 per litre
. Diesel consumption
< 18,000 per annum
Road tax
. Annual Repairs & maintenance t24,000
~80 for every 100 kms
Mobil oil
B0,000 per month
Supervisor's salary
506 7
Driver and conductor are also paid 5%of net taking as commission. During the
month, the bus met with an accident which resulted in an additional cost of
~25,000 of which only n5,000 were recovered from the insurance company.

Prepare Operating Cost Sheet," giving fare per passenger kilometre, fare for Delhi-
Jaipur, and Delhi Meerut journey, if_ the operator intends to earn a profit pf 20%
on net takings, and the passenger tax is 15%. (15) ·

4. The following details pertain to process I for March 2023 :

Opening work in progress (750 units) n s.ooo

Degree of completion:

Materials 100%

Labour 66.666%

Overhead 33.333%

Materials introduced during the month (9,250 units) n20,350

Labour n 1,120
Overheads ~37,450

Closing.work in progress (1800 units)

Degree of completion:

Materials 80%

Labour 60%

Overhead 30%

Normal process loss is 10% of total input. (including opening work in progress
and units introduced during the month)

P. T. 0.
/
506 8

Realizable value of scrapped units <2 per unit

Units completed and transferred to next process 7,500

The company uses FIFO method.

You are required to prepare :

(i) Statement of equivalent production,

;

(ii) Statement of cost showing cost per equivalent unit for each cost element,

(iii) Statement of evaluation,

(iv) Process account,

(v) Normal loss account, and

(vi) Abnormal loss/ gain account. (15)

OR

A Contractor commenced a contract on l " July, 2022: His cost records reveal
the following information on 31st March, 2023 :

Materials <7,75,000
• ,. sent to site
• Labour paid no,75,ooo

• Remuneration to engineer <20,000 per month

• Administrative expenses <2,80,000

. Materials at site t75,000

• Cost of plant sent to site ( on 1. 7 .22) t6,50,000

• Labour cost outstanding n,00,000

• Salary. of supervisor <15,000 per month

• Cash received ezz.oo.ooo

506 9

Plant used for the contract has an estimated life of 5 years with residual value at
the end of life of t50,000. Materials costing t13,500 were found unsuitable and
sold for <10,000. Contract price was agreed at no Lakhs. The value of Work
certified on 31.3 .23 was t27,50,000 while the cost of uncertified work. was
estimated at n0,000. Depreciation on plant is charged on the Straight-Line
basis. The supervisor devotes 2/3 of his time to the contract in question.
I.

As the contract is very much near completion, the contractor estimated the following
additional costs that would be incurred to complete the contract by 30.6.2023 :

• Materials (in addition to those on site) <15,000

• Labour t50,000

• Administrative expenses t20,000

Prepare Contract A/C and compute the figure of-profit to be taken to P & L
A/C for the year ending 31.3.23. . (15 Marks)

5. (a) What are the causes of under/ over absorption of overheads? How should
such an amount be disposed of in the books of accounts? (5)

(b) Pass journal entries for the following transactions, in an Integral system of
accounting :

(i) Raw materials purchased (40% on credit) t500,000

(ii) Wages (70% direct) paid <150,000

(iii) Selling & distribution overheads t40,000

(iv) Sales (50% on credit) t800,000

(5)

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506 10

(c) Show journal entries under Non integral System of accounting:

..
(i) Stores eso.ooo
(ii) Normal idle time of Factory work ~20,000

(iii) Rent of building ~80,000

(1/2 of the building is occupied by manufacturing,

1/4 of building is occupied by general office, and the

remaining 1/4 of building is occupied by the marketing unit) (5)

OR

(a) Write a note on Activity Based Costing. (5)

(b) Write a note on advantages of 'Cost plus Contracts' 'to the contractor and ·
contractee·. (5)

(c) The Cost Accounts of Alpha Ltd disclosed a loss of ~5,00,000 for the year
ended 31 March, 2023.

From the information given below, prepare a Reconciliation Statement, and

ascertain the profit/ loss as per the Financial accounts:

Factory overheads under recovered ~70,000

Administrative overheads over recovered ~40,000

.
' . .

Depreciation charged in financial accounts erso.ooo

Depreciation charged in cost accounts nzo.ooo
Interest on investment not included in cost accounts ~50,000

. Income Tax provided in financial accounts noo.ooo

Stor~s adjustment (credited in financial accounts) eio.ooo
(5)
506 11

1. ( 3r) ~ fctffl A(qicti-1 ~ ~l..f14nt· ~ ~ ~ ~ ~ ~(qicti..f cfiT '3m M

~ ~ t? (8)

(GI) ~ ~ ~ ~ 12,500 ~ ~q~C:al t, ~ ~~.cit ~ t1 ~ ~

~ · ~125 t ailt ~ ~ ~250 ~ ~ t, ~ ~ ctr ~ ~
. .

(ii) ~ cit ~ctil..fl_~cti ~ cfc4rfetl ~ WI_ ctiB 1R ~~ ctr Gfiffi

sf1 (7)

(3r) Pt~~Rtla ~ ~ ~ "i:IR ~ fl ~ ~:

(i) ~ ~ (3ff3c-~-1Wk) ~ ailt ~(sunk)~
(ii)~-~ ailt ~ ~
(iii) ~ ~ ailt ~ ~
(iv) iat;t 'cfi"ffl ailt ~ ~ 'cfi"ffl
(v) ~ ailt ~ (8)

-are~ ~vfff~
200 ~ffimii "lllm-~~500 f<l;ffimi:i ~cf»l' uo
500 ~ffi!l lJ:I "QT m ~ ~ 800 f<l;ffi~IJ:I ~ cf»l' "t.7

800 f<l:;~1mi:i "lllm ~ "t. 5

PTO. ·
506 12

~ 25 ~ ~ aWffi'. ~ ~ t, ~ an;TicfT, ~ 15 ~ ~ ~ ~
'
· cfiB "CR 5 ~ ct)- ~ ~
~ ctt ~ ~ ~ t, 100 F<ficllm'I ~
'
ctt'

&11{oT <f@ ~ ~ cfiT ~30 ~ ~ ll<:n, ~ cfllRlt "CR ~20 ~ cfrt:

~, {q~c:c:1< ~ soo F<ficllm'I ~ ~ cfiT ~ ~ t, . qftrn-1 ~ ~
~400 "ctt m {q~C:C:I< cITT ~ ~ t, ~ 3ll'l.fdcfi& ~200 cfiT ~T' ~

~~I

'lsRUl ~ ~~"'!Tm ctt 5 ~ctt~m (m) ~ t,.ffl

f<ticl14Jl'I m "ctt ~ ~ ~2 it ~i:..ilflf{qa "ctt 1fliRT ~I

(i) ~ F<ficllm'I ~ ~I
(7)

2. ( 3T) 'ffilffi ffl ~ ;;itc1<cl$'1 ~ cfiT f.-NcH ~ M ~ t? 6{lq~cl$'1 cITT ~

Pllfl¾a ~ ~ ~ t? (5)

. (GI") ~ ~ VcfiR "ctt 5 ~ ~ cfii~IR•U ~ ~ f.:li:..tiftRcld '11Hcfil~ ~ 3mm:

"CR~ 3lfcR ~ <Af 1fURT ~:-

~cfiT~ ~~ ('tfrn"CR~~~~ ~~) ~48,000 ffl cftt

~ ~ "CR \@.l&iij ~10,000 ~

ffl cftt 5 ~ "ctt ~ ~ ~ Hcl{{cllcl mlRf ~15,000

~ "ctt cftt \R "ctt ~0.50 ffl ~ "ctt ~ ~ ~ ~ ~50,000

~ cfiT qtl \R cfiT ~ ~ ~15,~00

~~~~3Wffei~~~ ~l,000 .ffl "'115

~ ~ ~ ~ ~ ~ ~ (~5,000 1iQfijf ~) ~15,000 ~

J4<1iffi ~ ~ an;rrqr, 5 ~ ~ 2 qifq1<~1· ~ ~ ~ cITT ffl "'115

~12 ,ooo cfiT ~ fctm ~ t ~~ <§4<cti{'11< cITT ~30 ,ooo cfiT ~

ffl ~ in@T t,
(10)
506
13

'3(Ql~-1~
*'nfthrm
tft-(:r.) <lq_(~ '3fR(:r.) ~(:r.) cnf(:r.)
"ITTqaf~ 40,000 60,000 48,000 2,000 800
"ITTqaf WT 32,000 40,000 36,000 1,500 1,000
~ar~ 3,800 4,800 800 6,000 1,600
~arw::r 3,600 4,400 1,200 4,000 2,600

~24,000

~11,200

~4,000

~12 ,000

~ cfi' '{\Jll•ld ~ lR 6 ~ >fRt <flf qJT '°i~iSliEt I

f.\..:i~k.€1a <>1RlR'cttt rctcRvr ~ ~ ~ : -

'3<Ql~-t fc!hflTJ ~fih-rm

tft(:r.) <lq_('t'.) '31R(:r.) ~(:r.) cnf (:r.)
~~~ 4,000 4;000 3,000 2,000 1,000
~~q~tj'fq,f~~ 10,00,000 12,00,000 8,00,000 6,00,000 4,00,000
fct;a'lc11c "iR 4,000 4,400 1,600 1,500 500
cl,JTqJ~tj'f~~ 90 120 30 40 ·20
J«'traf '3f+T "iR 3,600 3,200 2,200

(i) ~WU-~ cfi Zcfm qJf f.:l4'.fljiEfl< ~ ~ \jff-'fT ~' 'ffi ~ iEf"l'Jcfi(OI
( Simultaneous Equations) ~ cfiT ~ ~ ~ ~ _BT7@ qJT ~

~:-

PTO.
506 14

,:ft- ~ '3IR ~ llTf

20~ 10~
~ 30~ 40~
20~ 50~ 20~
cnf 10~

(ii) ~ ~ ~ ~ ~ ~ <fit ~ t500 t-, ~ ~ <fit ~ ~300

~ 31\'{ ~ ~. ~ 31\'{ 3tR ~ i:f ~: 4, 5 31\'{ 3 "'Eiit ~ ~·. ~
t, ~ ~ ~ <fit ~ ~ cf'QT mTrrl (15)

3. ( &) ~ ~ ~ (Job Costing) ~ ~ ~ ( Contract Costing) ~ ~ ~

3l'& ~? (5)

(~) XYZ ~ i:f ~ Pt...,~~a GIHcfil~ ~ 3l1tlR ~ ~ ~ ( Cost Sheet).

~~:
20,000

16,000
~ ~ <!icfil<!i4i
~100
~~~~~
t60 ~ 'ifcf <fit ~ i:f 10,000 ~

tl5,000

.~5,000

tl0,000

~~~<fit~ tl,00,000

~10
~ ~ ~ ~ q'if ~

14Pt.no, dncta~,e ~l,10,000

.r.tiR~~~~'q'{-a;qNf
~25,600

~ q'if -;s~it.1-1 ~ "<{'{ ~

~10,000
506 15

· ?25,000

?15,000

?40,000

?25,000

?50,000

?80,000

(10)

1J11f ~ ~ ~lmRR ~~~

~<R'Q,~ i\;-~~~ &rnfflct;T'3'\Ttl11T
~~~ 3fl"{~~~ 300 f<t-.lft. 10 80~

~~ltxo3fl"{~~~ 100 f<t".lft. 10 90~

~~~~ 5 ~iui ell@T~~ !,1@~'1120 ~ctt~~cfiffl~~~'IR

~ti
~ ~ Pl;;:i1¥1R ~: -

~cfifml@ ?21,00,000

~qif~ 2 ,00 ,000 fc¼icll<tllc:<

?10 ,000

?9,000

f30 ,000 "Sna cfl't

PTO.
506 16
.
<60 m ~ clil ~ ~ 6 fctiJ\Jik< m ~
<18 ,000 ,mt ~

<24,000

~ 100 Mcfi"~ <80

<30 ,000 ffl ll16

~ ~ cfis<f<:( cfil ~ ~ cliT 5 fflffif cfi~:11.:t cfi" ~ ~ ~ m ~ t, ~ cfi" ~.

Gf« s,tic..:tliHki ITT 1lf ~ qj{'Ju+f(q~q ~25,000 cliT 31RfRcffi ~ 31ft, ~ ~ ~
<15,000 "ST~~~~ ~I

~ ~~ ~"q( 20 ~clil~~clil~'((q"ffit ~dcfi( 15 fflffif_

t, "ffi~-~ ~~~1:ffmcfit~ ~~dfctit'fl'lk< ~Gffiffi~
qf(iU("1'1 ~ W ~ ~I {15)

iiflft ~ (Opening)~ (750 ~) <15 ,000

~~'T1f!3'T:

~ 100 ~

66.666 ~

33.333 fflffif
<120,350

<31,120

<37 ,450
506
I
_.,_
17
ffl fcmRr 1r1t san: .
~
so~·
~
60 ~

~
30 ~

.~~mf.r~~cfiT 10 ~i (inRT ~~ ~~~~~ctr·

11l lcrii~qy •)

7,500

(iii) 1J_&-4i'cfi-i fcrcRur, ( Statement of evaluation) ·

.(iv) mm Z<mlr, (Process account)

(v) ~ mf.rZ<m1T, (Normal loss account) ~

(vi) 3fijl'll..q ~ ~ ( Abnormal Iosse gain account) I

· (15)

PTO.
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18
506 .
'!"' ~ i'\- 1 ¢, 2022 'Iii'!"' 31¥" '!F t,m, ~,ITT@~ ;i 31 -.w4, 2023
~ ~Rt~-a mM4illl ~ t : -
t7 ,75 ,000
. ~w~~~
tl0,75,000
~~~llm~
t20,000 ~'lll6
. ;~\N!Pt~ ~ ~ 11m ~
t2,80,000
• ~:ni:ePtqi ~ "
t75,000
~w~
t6,50,000
~w ~~~ctl~ (1.1.22 ~)
•
fi,00,000
~~qil~
. t15 ,000 ~ 'llT6 ·
. ~i(q($;jl°{ qiT ~
t22,00,000
• . ~~~

31¥" 'f> ~ ~ f<li'1711( G;lic qi! 3''.J'llf.ld -all<R 5 <ri t ~ -all<R 'f> 3@ i\i 'Wfi!
~ ~ rso ,000 t I TI3 ,500 <lit ,ITT@ ~ lll'ffil 31:i"'!'f"' 'Tif '1f ~ ,10 ,000 i\i ilsi\
-.,f 1 31¥" ~ <30 "1J;i 'R""""' ¥• 31.3.23 'Iii """"'" 'iiFf qi!~ ,21 ,50 ,000 "'·
~ 3'll'llful<I 'iiFf <lit ,ITT@ <30 ,000 a,iss\ '1f >Ill G;lic 'R '!."''18 iilu\-'fflr 1ilfu <fi
3'1tlR 'R Wll'II = t1 'f'<Ol{<n<. ffi Wl'I qi! ,lt flr.ml' ~ ~ 31¥"-..\ 1tfil t1
'l)'ill> 31¥" ""1'l'l ~ ,M <fi ~ t, ~ i'\- f.1..,F,mlla ,al\ll¼! \;Ill@( qi! ar,flR

~ t, ~ 30.6.2023 Wfi ~
~ cfil "RI~~~~~~:-
"'

t15 ,000

tS0,000

t20,000

31¥" - ~ ~ ~ 31.3.23 'Iii - ,M-.f.\ ,ri 'f> ~ -q\ ,tg 1!ol <ii@,( ~ -atf.1-
't\j -.IN 'f> ~ <lit "'1"1'l! ~I ( 15)
506
19

5. (3r) dnqi(6~ij ~ cfi1f/3TIUcfi ~(absorption)~~ cfiRUT ~? ffl ~ ~ ~-

~ mw cfi! ~4cM~~~~? (5)

(Gf} '-?ct1<!\d i.')<.qicfi-1 ~ (Integral system of accounting)~ ~&.ffi;lf{t.la ~ ~ ~

~$1F<l~lfi1im~:

~500,000

(ii) 'jl@R f<fiiu ~ ~ (70 ~ ~)

~150,000

~40,000

(iv)~ (so ~ ~ "CR)

~800,000
- (5)

_ (~) ~--1.?ch'l<l\d i.')<.qicfi-1 ~- (Non integral System of accounting) ~ ~ ~

$1 ~~"'~
lfl l~'l."11'{ :

(i} ~ ~30,000

(ii)cWrcfil.~~~ ~20,000

(iii)~ qif ~
~80,000

(~~ 3UU~cfil~ fcl~'fful IDU, ~~~~cfil~~ ctil<Mllf

~ •~~~~cfil~~~~f<fiiu~~t) (s)

(5)

('ar) ~ 31k ~ "ctil" m cfffi '~ ~ ~· ~ ri 'tR ~ ~-

~, (5)

PT.O.
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20
506
(~) ~ ~Pl2s~mmrm~ 31~, 2023 cfil"~~~~ (s,00,000 $I'm
-mtt1

~ ~ ~ iitl'1q-illl ~ 3TIUR lR ~.f<rcR'cJT ~ ~ 3tR ~ ffl ~ ~

~·~ ~:

(70,000
~. 1FU ~ cfiT ~

(40,000 -:
3lfuco ~ ~ Sl:lll~f.lq-; 3ftq,(~&_ij
.
;,;;-

, ~ ffl ~ ~ '1@-4~1~ (150,000

"'
(120,000
mml ffl ~ '1@-4~1~
·C:--

mmfffl~~.:m\'~l'N~lR~ · (50,000

-
(100,000
~ffl~~~~
""'~,..-. (s)
~ ~'1141iit'1 (~ ffl ~ ~)
(10,000

(5000)