Register Number :

Name of the Candidate :

5 6 2 3
M.Com. (Accounting and Finance)
DEGREE EXAMINATION, 2009
( SECOND YEAR )
( PAPER - X )

650. COST CONTROL TECHNIQUES

December ]

[ Time : 3 Hours
Maximum : 100 Marks
SECTION - A

(5 8 = 40)

Answer any FIVE questions.

All questions carry equal marks.
1. Explain the concept of value analysis as a
technique of cost reduction.
2. Differentiate between production and
productivity. Which would you prefer to
improve in your organisation and why ?
3. What do you understand by Performance
Budgeting ? Explain its main features.
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4. Discuss the limitations of standard costing.
5. Discuss briefly three bases normally followed
in pricing inter - department transfers of
product.
6. From the following information, calculate
material mix variance.

5
12. The following data are available from the
records of a company :
Rs....

Variable Cost

Sales

Fixed cost
Materials

Standard
Quantity
(Units)

60

40

60,000
30,000
15,000

Actual

Price
Quantity
(per unit ) (Units)
10
5

Price

( per unit )

50

12

50

(a) Calculate the p/v ratio ; Break - even point

and margin of safety at this level.
(b) Calculate the effect of 10 % increase in
sale price.
(c) Calculate the effect of 10 % decrease in

7. From the following particulars, calculate :

(i)

Break - even point in terms of sales value

and in units.

(ii) Number of units that must be sold to

earn a profit of Rs. 90,000

sale price.
13. What do you mean by transfer pricing ? Briefly
describe the methods that are used by
companies to mitigate problem of transfer
pricing.

Rs....

Fixed Selling Overheads Cost

Fixed Factory Overheads Cost

60,000
12,000

4
SECTION - B

Answer any THREE questions.

All questions carry equal marks.
9. What is the difference between cost control
and cost reduction ? Enumerate some of the
possibilities in reducing the cost of a product
and outline a programme for cost reduction.
10. Describe the essential steps of a Budgetary
Control system.
11. The information regarding the composition and
the weekly wage rates of labour force engaged
in a job scheduled to be completed in 30
weeks are as follows :
Standard
Category of
workers

Rs....

(3 20 = 60)
Variable Manufacturing
cost per unit

12

Variable selling cost per unit

Selling price per unit

24

8. A manufacturing company finds that while the

cost of making a component No. 051 in its
own workshop is Rs. 8 each, the same is
available in market at Rs. 650 with an
assurance of continuous supply. Give your
suggestion whether to make or buy this
component. Give also, your views in case the
supplier reduces the price from Rs. 650 to
Rs. 550. The cost data is as follows :

Actual

No. of Weekly wage No. of Weekly wage

rate per
rate per
workers
workers
worker Rs.
worker Rs.

Skilled

75

60

70

70

Semi - skilled

45

40

30

50

Unskilled

60

30

80

20

Rs.
Materials
Direct labour
Other variable expenses
Depreciation and
other fixed expenses

300
200
100

Total

800

200

The work was completed in 32 weeks.

Calculate various labour variances.

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