INSTITUTE OF MANAGEMENT SCIENCES, JAMMU

COST ACCOUNTING
Course No: UBBATC-301
Time allowed-2.5 Hours Maximum Marks-80
Important Instructions.
1. The maximum marks for the above questions paper is 80 marks.
2. The students are directed to attempt only 50% of the maximum marks i.e
at least 40 marks.
3. You may attempt:-
Section A – Only 2 questions of 3 marks each.
Section B – Only 3 questions of 7 marks each.
Section C – Only 1 question of 15 marks.
SECTION-A
Note: Each question carries (3) marks.
1. Enlist any two objectives of Standard Costing.
2. How is normal loss treated in process cost accounts?
3. What do you mean by cost sheet?
4. What is contribution?
5. Calculate Profit Volume Ratio. Sales 200000, Variable cost 50000, Fixed
Cost 30000.

SECTION-B
Note: Each question carries (7) marks. (5*7=35)

6. What do you mean by process costing? In which type of industries

process costing is used.
7. Define the following terms:
A) Material Variance
B) Labour variance
C) Overhead Variance
8. What is Cost Accounting? Discuss its advantages and limitations of Cost
accounting.
9. What is meant by Break-Even Analysis? Discuss its assumptions and
limitations of this techniques.
10.The Vardhman ltd. Manufacturers one product. A summary of its
activities for the year 2016 is given below:
Sales (80000 units) 800000 : Finished goods 31-12-201 (34000
units)
Material Inventory 1-1-2016 40000 : Material Purchased 152000
Material Inventory 31-12-2016 32000: Direct Labour 145000
W.I.P. 1-1-2016 55000 : Manufacturing Overheads 108000
W.I.P.31-12-2016 72000 : Selling Expenses 50000
Finished goods 1-1-2016 (16000 units) 64000: General Expenses 40000
Prepare a statement of Cost and Profit.

SECTION-C
Note: Each question carry 15 Marks.

11. Distinguish between Cost accounting and Financial Accounting. Discuss

the limitation of financial accounting and how they can be overcome with
cost Accounting.
12. Mr. Gopal furnishes the following data relating to the manufacturer of a
standard product during the month of April, 2017:
Raw material Consumes 15000: Administration Overheads 20% on work
cost. Direct labour charges 9000: Selling Overheads 0.50 per unit
Machine Hour worked 900: Units Produced 17100
Machine Hour Rate 5 : Units sold 16000 @ 4 per unit.
You are require to prepare a cost sheet from the above, showing; (a) the
cost of Production per unit. (B) The profit per unit sold and profit for the
period.
13.What is the meaning and importance of standard costing? Discuss the
preliminary steps for establishing a system of standard costing.
14.What do you understand by the term “cost-volume profit’’ analysis? Why
is this relationship important in business management? Explain the
advantages and limitation of marginal costing.