6

(iv) Profit when sales are Rs. 2,50,000 ;

(v)

Margin of safety at a profit of

Rs. 50,000

and (vi) Variable costs of the two periods.

Register Number :
Name of the Candidate :

1 6 2 3
M.Com. (Accounting & Finance)
DEGREE EXAMINATION, 2009
( SECOND YEAR )

13. Discuss the various cost based methods used

for the determination of transfer prices.

( PAPER - X )

650. COST CONTROL TECHNIQUES

May ]

[ 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. Define budgetary control and state its
objectives.
3. Describe the managerial uses of variance
analysis.
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4. What are the limitations of break even

analysis ?

11. From the budgeted and actual sales for July

in respect of three products given below, you
are required to calculate sales variance :

5. What do you mean by transfer pricing ? What

are its objectives ?
6. Calculate productivity per machine hour
from the following information :
Month

Production Machine Hours

(Units)
used

January

17,500

1,750

February

19,950

2,100

March

22,050

2,450

7. Standard mix for production of X

Actual

Budgeted
Sales
Units
price Rs.

Units

Sales
price Rs.

5,000

500

5,000

500

4,000

600

6,000

625

3,000

700

4,000

675

Product

12,000

15,000

12. The sales turnover and profit during two years

were as follows :
Profit
Sales
Rs.
Rs.
2003 1,50,000 20,000
Year

Material - A : 60 tonnes @ Rs. 5 per tonne.

Material - B : 40 tonnes @ Rs. 10 per tonne.

2004 1,70,000 25,000

Actual mixture being :
Material - A : 80 tonnes @ Rs. 4 per tonne.
Material - B : 70 tonnes @ Rs. 8 per tonne.

You are required to calculate :

(i)

P/V ratio.

(ii)

Break - even point.

(iii) The sales required to earn a profit

of Rs. 40,000 ;
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4
SECTION - B

3
(3 20 = 60)

Answer any THREE questions.

All questions carry equal marks.
9. Discuss the role of a cost accountant in
increasing the productivity of a manufacturing
unit to which he is attached.
10. The following data relate to a company which
had a profit plan approved for selling 7,500
units per month at an average selling price of
Rs. 15 per unit. The budgeted variable cost
of production was Rs. 6 per unit and fixed
costs were budgeted at Rs. 30,000, planned
income being Rs. 15,000 per month. Because
of shortage in raw materials, the plant could
produce only 6,000 units and the cost of
production was increased by 075 per unit.
Consequently the selling price was raised by
Rs. 150 per unit. To modify production
process in order to meet material shortage,
the company incurred an expenditure of
Rs. 1,500 in Research and Development. Set
out a performance budget and a summary
report.

Calculate :
(a)

Material price variance.

(b) Material sub - usage variance

and (c)

Material mix variance.

8. From the following data, calculate break even point expressed in terms of units and
also the new break - even point if selling
price is reduced by 10 % :
Fixed expenses :
Rs.....
Depreciation

- 1,00,000

Salaries

- 1,00,000

Variable expenses :
Materials -

Rs. 3 per unit

Labour

Rs. 2 per unit

Selling price Rs. 10 per unit.

Turn over