Solapur University Question Paper
M.Com. (Part – I) (Sem. – II) (New) Examination, 2014
ADVANCED COSTING (Paper – II) (Gr. b)
Day and Date : Monday, 21-4-2014 Max. Marks : 50
Time : 11.00 a.m. to 1.00 p.m.
N.B. : 1) All questions are compulsory.
2) Figures to the right indicate full marks.
3) Use of calculator is allowed.
1. Choose correct alternatives from given : 10
1) The technique of decision making by comparing total cost and total revenue
of different alternatives is called __________ costs.
A) Deferential B) Total
C) Works D) Standard
2) Final output of accounting and costing functions is called ____________
A) Policy B) Total cost
C) Report D) Finished product
3) The costing technique that considers all fixed cost as period cost is
____________
A) Differential cost B) Marginal costing
C) Absorption costing D) Relevant cost
4) If change is made in the level or pattern or method of production the resulting
increase in total costs is called _____________
A) Incremental cost B) Historical cost
C) Marginal cost D) Standard cost
5) The formula for profit volume ratio is ____________
A) Sales
Variable cost + sales
B) Sales
Sales − variable cost
C) Variable cost
Fixed cost + profit D) Contribution per unit
Fixed cost
SLR-NN – 44 -2-
6) A ____________ is vehicle carrying information to those who need it.
A) Budget B) Marginal Cost
C) Report D) Cost Sheet
7) Margin of safety means ____________
A) Total credit sales – Break even sales
B) Total cash sales – Break even sales
C) Total sales – Break even sales
D) Total sales + Break even sales
8) If the total cost at the 90% level of activity is Rs. 1,60,000 and at 100%
capacity is Rs. 1,80,000, the Rs. 20,000 is the _____________ cost.
A) Marginal B) Differential
C) Variable D) Budgeted
9) ____________ is plan covering all phases of operations for a definite period
in the future.
A) Reporting B) Budget
C) Marginal cost D) Opportunity cost
10) Budgets which relates to the individual functions in an organisation are known
as _____________ budget.
A) Fixed B) Flexible
C) Master D) Functional
2. Write short notes on : 10
1) Types of report
2) Opportunity cost.
3. A) P/V Ratio is 60% and marginal cost of product is Rs. 50. What will be the
selling price ? 5
B) A company produces and sells 100 units product A per month at Rs. 20.00.
Marginal cost per unit is Rs. 12.00 and fixed costs are Rs. 300 per month. It
is proposed to reduce the selling price by 20%. Find the additional sales units
required to earn the same profit as before. 5
-3- SLR-NN – 44
4. A company wishes to arrange overdraft facilities with its Bakers during the period
April to June when it will be manufacturing most for stock. Prepare cash budget
for the above period from the following data, indicating the extent of bank facilities
the company will require at the end of each month.
Month Sales Purchases Wages
February 1,80,000 1,24,800 12,000
March 1,92,000 1,44,000 14,000
April 1,08,000 2,43,000 11,000
May 1,74,000 2,,46,000 10,000
June 1,26,000 2,68,000 15,000
50% of credit sales are realised in the month following sales and the remaining
50% in the second month following. Creditors are paid in the month following the
month of purchase. Wages are paid on 1st and 16th day of every month. Cash at
bank on 1st April Rs. 25,000. 10
OR
Draw flexible Budget for overhead expenses on the basis of the following data
and determine the overhead rate per hour at 70%, 80% and 90% capacity level.
Particulars At 80% capacity
Rs.
Variable overheads :
Indirect labour 12,000
Indirect materials 4,000
Semi variable overheads
power (70% variable) 20,000
Repairs and maintenance
(60% fixed) 2,000
Fixed overheads :
Depreciation 11,000
Insurance 3,000
Others 10,000
Total overheads 62,000
Estimated direct labour hours : 1,24,000 hours. 10
SLR-NN – 44 -4-
5. Following information has been available from the cost records of Bad Luck
company manufacturing spare parts X and Y.
Particulars Cost per unit
Rs.
Direct materials : X 8
Y 6
Direct Wages X 24 hrs. @ 25 paise per hour
Y 16 hrs. @ 25 paise per hour
Variable overheads 150% of wages
Fixed overhead Rs. 750
Selling price of X Rs. 25
Selling price of Y Rs. 20
The Directors want to be acquainted with the desirability of adopting any one of
the following alternative sales mixes in the budget for the next period.
a) 250 units of X and 250 units of Y
b) 400 units of Y only
c) 400 units of X and 100 units of Y
d) 150 units of X and 350 units of Y.
State which of the alternative sales mixes you would recommend to the
management. 10
OR
From the following information, calculate Break even point, and turnover required
to earn a profit of Rs. 36,000
Fixed overheads Rs. 1,80,000
Variable cost per unit Rs. 2
Selling price per unit Rs. 20
If the company is earning a profit of Rs. 36,000 express the margin of safety
available to the company. 10
_____________________
M.Com. (Part – I) (Sem. – II) (New) Examination, 2014
ADVANCED COSTING (Paper – II) (Gr. b)
Day and Date : Monday, 21-4-2014 Max. Marks : 50
Time : 11.00 a.m. to 1.00 p.m.
N.B. : 1) All questions are compulsory.
2) Figures to the right indicate full marks.
3) Use of calculator is allowed.
1. Choose correct alternatives from given : 10
1) The technique of decision making by comparing total cost and total revenue
of different alternatives is called __________ costs.
A) Deferential B) Total
C) Works D) Standard
2) Final output of accounting and costing functions is called ____________
A) Policy B) Total cost
C) Report D) Finished product
3) The costing technique that considers all fixed cost as period cost is
____________
A) Differential cost B) Marginal costing
C) Absorption costing D) Relevant cost
4) If change is made in the level or pattern or method of production the resulting
increase in total costs is called _____________
A) Incremental cost B) Historical cost
C) Marginal cost D) Standard cost
5) The formula for profit volume ratio is ____________
A) Sales
Variable cost + sales
B) Sales
Sales − variable cost
C) Variable cost
Fixed cost + profit D) Contribution per unit
Fixed cost
SLR-NN – 44 -2-
6) A ____________ is vehicle carrying information to those who need it.
A) Budget B) Marginal Cost
C) Report D) Cost Sheet
7) Margin of safety means ____________
A) Total credit sales – Break even sales
B) Total cash sales – Break even sales
C) Total sales – Break even sales
D) Total sales + Break even sales
8) If the total cost at the 90% level of activity is Rs. 1,60,000 and at 100%
capacity is Rs. 1,80,000, the Rs. 20,000 is the _____________ cost.
A) Marginal B) Differential
C) Variable D) Budgeted
9) ____________ is plan covering all phases of operations for a definite period
in the future.
A) Reporting B) Budget
C) Marginal cost D) Opportunity cost
10) Budgets which relates to the individual functions in an organisation are known
as _____________ budget.
A) Fixed B) Flexible
C) Master D) Functional
2. Write short notes on : 10
1) Types of report
2) Opportunity cost.
3. A) P/V Ratio is 60% and marginal cost of product is Rs. 50. What will be the
selling price ? 5
B) A company produces and sells 100 units product A per month at Rs. 20.00.
Marginal cost per unit is Rs. 12.00 and fixed costs are Rs. 300 per month. It
is proposed to reduce the selling price by 20%. Find the additional sales units
required to earn the same profit as before. 5
-3- SLR-NN – 44
4. A company wishes to arrange overdraft facilities with its Bakers during the period
April to June when it will be manufacturing most for stock. Prepare cash budget
for the above period from the following data, indicating the extent of bank facilities
the company will require at the end of each month.
Month Sales Purchases Wages
February 1,80,000 1,24,800 12,000
March 1,92,000 1,44,000 14,000
April 1,08,000 2,43,000 11,000
May 1,74,000 2,,46,000 10,000
June 1,26,000 2,68,000 15,000
50% of credit sales are realised in the month following sales and the remaining
50% in the second month following. Creditors are paid in the month following the
month of purchase. Wages are paid on 1st and 16th day of every month. Cash at
bank on 1st April Rs. 25,000. 10
OR
Draw flexible Budget for overhead expenses on the basis of the following data
and determine the overhead rate per hour at 70%, 80% and 90% capacity level.
Particulars At 80% capacity
Rs.
Variable overheads :
Indirect labour 12,000
Indirect materials 4,000
Semi variable overheads
power (70% variable) 20,000
Repairs and maintenance
(60% fixed) 2,000
Fixed overheads :
Depreciation 11,000
Insurance 3,000
Others 10,000
Total overheads 62,000
Estimated direct labour hours : 1,24,000 hours. 10
SLR-NN – 44 -4-
5. Following information has been available from the cost records of Bad Luck
company manufacturing spare parts X and Y.
Particulars Cost per unit
Rs.
Direct materials : X 8
Y 6
Direct Wages X 24 hrs. @ 25 paise per hour
Y 16 hrs. @ 25 paise per hour
Variable overheads 150% of wages
Fixed overhead Rs. 750
Selling price of X Rs. 25
Selling price of Y Rs. 20
The Directors want to be acquainted with the desirability of adopting any one of
the following alternative sales mixes in the budget for the next period.
a) 250 units of X and 250 units of Y
b) 400 units of Y only
c) 400 units of X and 100 units of Y
d) 150 units of X and 350 units of Y.
State which of the alternative sales mixes you would recommend to the
management. 10
OR
From the following information, calculate Break even point, and turnover required
to earn a profit of Rs. 36,000
Fixed overheads Rs. 1,80,000
Variable cost per unit Rs. 2
Selling price per unit Rs. 20
If the company is earning a profit of Rs. 36,000 express the margin of safety
available to the company. 10
_____________________
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