Pune University BE (Mechanical) Costing and Cost Control Question Papers

B.E. (Mechanical S/W) COSTING AND COST CONTROL (2008 Pattern) (Sem. – II) (Elective – IV) (Self Study)

Time :3 Hours]                                                                                              [Max. Marks :100

Instructions to the candidates :

1)            Answer any three questions from each section.

2)            Answer to the two sections should be written in separate books.

3)            Neat diagram must be drawn whenever necessary.

4)             Pigures to the right indicate full marks.

5)            Assume suitable data, if necessary.

SECTION – I

QI) a) Define cost and explain how the costs are classified.

b) Distinguish between financial accounting 8 cost accounting.

OR

Q2) a) Prepare cost statement of the M/s Ravishankar 8 Co. From the following information extracted from the records of the M/s Ravishankar 8 Co. [8] Stock position of the firm

Particulars

1-4-2010 (Rs)

31-3-2011 (Rs)

Stock of raw materials

80,000

1,00,000

Stock of finished goods

2,00,000

3,00,000

Stock of work in progress

20,000

28,000

 

Particulars

Rs.

Particulars

Rs.

Indirect labour

1,00,000

Administrative

expenses

2,00,000

Oil

20,000

Electricity

60,000

Insurance on fixtures

6,000

Direct labour

6,00,000

Purchase of raw Material

8,00,000

Depreciation on machinery

1,00,000

Sales

commission

1,20,000

Factory Rent

1,20,000

Salaries of salesmen

2,00,000

Property tax on building

22,000

Carriage outward

40,000

Sales

24,00,000

 

State and explain limitations of financial accounting?

Q3) a) Explain in detail elements of cost also distinguish between direct cost and indirect cost with examples.                                                                       [8]

b)  What do you understand by direct expenses? What are their

characteristics?                                                                                                    [8]

OR

Q4) a) State the meaning and scope of cost accounting.                                       [4]

b)            Are direct expenses more important than indirect expenses? Explain [4]

c)            Define and explain in details the following with suitable examples [8] Manufacturing overheads

Indirect labour cost

Sales and distribution overhead

Q5) a) State the basis of apportionment of expenses of following service departments.    [8]

i)            Maintenance Deptt.                     ii)      Payroll 8 time keeping Dept.

i)            Personnel dept.                             iv)     Store keeping dept.

i)            Purchase dept.                              vi)     Weltare dept.

i)            Internal transport dept.

b)           What do you understand by classification, allocation and apportionment in relation to overhead expenses? Explain.                                                                         [10]

OR

Q6) A company has three production departments (MI, M2 and AI) and three service department, one of which Engineering service department, servicing the MI and M2 only. The relevant information is as follows:                                                                                        [18]

Production departments

Product X

Product Y

MI

10 Machine hours

6 Machine hour

M2

4 Machine hours

14 Machine hours

AI

14 Direct Labour hours

18 Direct Labour hour

 

The annual budgeted overhead cost for the year are

Production departments

Indirect Wages (Rs)

Consumable Supplier (Rs).

M1

46,520

12,600

M2

41,340

18,200

A1

16,220

4,200

Stores

8,200

2,800

Engineering Service

5,340

4,200

General Service

7,520

3,200

 

Depreciation on Machinery (Rs.)                         39,600

Insurance of Machinery (Rs.)                                7,20019

Insurance of Building (Rs.)                                   3,240

(Total building insurance cost for M1 is one third of annual premium)

Power (Rs.)                                                               6,480

Light (Rs.)                                                                5,400

Rent (Rs.)                                                                  12,675

(The general service deptt. is located in a building owned by the company).

It is valued at Rs. 6,000 and is charged into cost at notional value of 8%

per annum. This cost is additional to the rent shown above

The value of issues of materials to the production departments are in the

same proportion as shown above for the Consumable supplies.

The following data are also available :

Department Book value Machinery

(Rs.)

Area (Sq. ft.)

Effective

H.P.

hours

production

Direct

Labour hour

Capacity

Machine

hour

M1

1,20,000

5,000 50

2,00,000

40,000

M2 90,000

6,000

30

1,50,000

50,000

A1 30,000

8,000

05

3,00,000

 
Stores 12,000

2,000

   
Engineering

Service

36,000 2,500 10    
General

Service

12,000 1,500    
           
a)                 Prepare a overhead analysis sheet, showing the bases of apportionment of overhead to departments.

b)                 Allocate service department overheads to production department ignoring the apportionment of service department costs among service departments.

 

c)            Calculate suitable overhead absorption rate for the production departments.

d)            Calculate the overheads to be absorbed by two products, X and Y.

SECTION – II

Q7) What is by-product and how is it different from joint product? What are the various methods of accounting for by-product? Explain each of the methods. [18]

OR

Q8) a) Discuss the distinguishing features of process cost system.         [10]

b) What are the methods of apportioning joint costs? Explain any one in brief.        [8]

Q9) a) A company produces a single article and sells it at Rs. 10 each. The marginal cost of production is Rs. 6 each and total fixed cost of the concern is Rs. 400/ annum.       [8]

Construct a breakeven chart and show the following :

Breakeven point

Margin of safety at sale of Rs. 1,500 Angle of incidence

Increase in selling price if breakeven point is reduced to 80 units. b) State the limitations and uses of breakeven charts.                                                                                     [8]

OR

Q10)a) Explain — margin of safety shows the financial strength of a business. [8]

b)            CVP analysis is a useful technique for managerial decision-making. Discuss.            [8]

Q11)a) Distinguish between standard cost and estimated cost? Explain the advantages and limitations of standard costing.                                                                        [8]

b) Explain why marginal cost is decision making tools for management? State its usefulness and limitations.                                                                                          [8]

OR

Q12)Write a short note (Any Two)                                            [16]

a)            Activity based costing

b)            Techniques of marginal costing

c)  Basis of standard costing

1 thought on “Pune University BE (Mechanical) Costing and Cost Control Question Papers”

Leave a Comment