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Refer/WI/ACAD/18
Q1. Explain Normal Loss and Abnormal Loss and its treatment in Process Costing. Give example to
support your answer.
Q2. Discuss the various components of Cost Sheet. Also give a Proforma of a Cost sheet of a
manufacturing company.
Q6. JP Limited ,manufacturers of a special product, follows the policy of EOQ for one of its
components. The component’s detail are as follows:
Purchase price per component 200
Cost of an order 100
Annual cost of carrying one unit in inventory 10% of Purchase Price
Total cost of inventory and ordering per annum 4000
The Company has been offered a discount of 2% on the price of the component provided the lot size is
2000 components at a time.
You are required to (a) Compute EOQ (b) Advise whether the quantity discount offer can be accepted.
(Assume that the inventory carrying cost does not vary according to discount policy). (c) Would your
advise differ if the company is offered 5 % discount on a single order?
Q7. From the following information, prepare a cost sheet for period ended on 31st March 2006.
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Profit on cost 20%
Q8.The product of a company passes through three distinct processes to completion. From past experience
, it is ascertained that normal wastage in each process is as under:
4000units were initially introduced in process A at a cost of Rs.13560. The output of each process was as
under
Process Output in Units
A 3850
B 3600
C 3500
Prepare process accounts and also workout the sale price per unit of finished stock so as to realise 20 %
profit on selling price.
Q9. The information given below has been taken from the records of an engineering works in respect of
Job No.309
Material 4000
Wages:
Department A 50 hrs at 5 per hour
Department B 50 hrs at 2 per hour
Department C 30 hrs at 7 per hour
Fixed expenses 20000 for 10000 working hours. Calculate the cost of Job 309
Q10. In a factory three process are employed. The output of process A is transferred to B and of B to C. It
has been experience that wastage in process A is 2 % , process B is 5 %, process C is 10 %. The scrap
value of wastage in process A and B is 200 per hundred units and process C 500 per hundred units.
Supplementary Questions:
Q1. The following information is given to you from which you are required to prepare Cost
Sheet for the period ended on 31St march 2006:
Consumable material:
Opening stock 20,000
Purchases 1,22,000
Closing stock 10,000
Direct wages 36,000
Direct Expenses 24,000
Factory overheads 50 % of direct wages
Office and administration overheads 20% of works cost
Selling and distribution expenses 3 per unit sold
References:-
1. MY Khan, PK Jain , The Mc Graw Hill Companies & Fourth Edition, ‘Management
Accounting’.
2. Dr. S.P.Gupta ,Sahitya Bhavan Publications, Management Accounting.
3. Ravi M Kishore, Taxmann’s, Cost Accounting and Financial Management.
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