NAGASANDRA, BANGALORE – 73

V Semester BCOM, Degree Examination, I CIA, August 2018

COMMERCE
5.4:COSTING METHODS
Time: 2 Hours Max Marks: 50

Instructions: 1) All answers should be completely in English.

2) Write the correct question number.

SECTION-A

I. Answer any Five question each carries Two marks (5x2=10)

a. What do you mean by job costing?
b. What do you mean by batch costing?
c. How do you calculate normal and abnormal loss amount? Mention the
formula
d. What is Process costing?
e. Give any two differences between job costing and batch costing
f. What is Normal wastage?
g. What do you mean by Scrap value?

SECTION-B

II. Answer any Two question each carries Six marks (2x6=12)

1. The following direct costs were incurred on Job No. 415 of standard Radio Company.
Materials Rs. 4010
Wages:
Department A- 60 Hours @ Rs. 3 Per hr.
Department B- 40 Hours @ Rs. 2 Per hr.
Department C- 20 Hours @ Rs. 5 Per hr.
Overhead expenses for these three departments were estimated as follows:
Variable overheads:
Department A- Rs. 5000 for 5000 labour hours
Department B- Rs. 3000 for 1500 labour hours
Department C- Rs. 2000 for 500 labour hours
Fixed overheads:
Estimated at Rs. 20000 for 10000 normal working hours.
 You are required to calculate the cost of Job 415 and calculate the price to give profit
of 25% on selling price.
2. Fifty units are introduced into a cost of 1 rupee each. The total additional expenditure
incurred in the process is Rs. 30 of the units introduced, 10% are normally spoiled in
the course of manufacture, these posses a scrap value of Rs. 0.25 each. Owing to an
accident, only 40 units are produced. You are required to prepare
Process account
Abnormal process account
3. Breifly explain the various types of costing methods

SECTION-C

III. Answer any Two questions each carries Fourteen marks ( 2x14=28)

4. The following expenses are relating to a job for year ended 31 st December 2014

PARTICULARS AMOUNT
Direct materials 3000
Direct wages 4000
Chargeable expenses 1000
Factory overheads 2000
Selling & distribution expenses 2000
Office overhead 3000
The selling price is Rs. 18000, Prepare a cost sheet for the job & estimate the price for the
year 2015.
If material, wages & expenses would been Rs.5000/-, 7000/- & 2000 respectively.
The overheads absorbed are factory overhead as a percentage of direct wages, selling and
distribution overhead & office overhead as a percentage of factory cost.
5. A product passes through three processes A B & C. The normal wastage of each
process is as follows Process A – 3%, Process B – 5% & Process C – 8%. Wastage of
process was sold at 0.25 per unit that of process B 0.50 P.U. and that of process C 1
Rs. P.U. 10000 units were issued to process A on 1/4/2017 at the cost of Rs. 1 P.U.
The other cost were as follows:

Particulars Process A Process B Process C

Sundry materials 1000 1500 5000
Labour 5000 8000 6500
Direct Expenses 1050 1188 2009
Actual output 9500 units 9100 units 8100 units
Prepare the process accounts assuming that there were no opening or closing stock. Also
give the abnormal wastage and abnormal gain account.
6. The following direct costs were incurred on Job No. 239 Of XYL Company limited.
 Materials Rs. 4010
Wages:
Department A- 60 Hours @ Rs. 30 Per hr.
Department B- 40 Hours @ Rs. 20 Per hr.
Department C- 20 Hours @ Rs. 50 Per hr.

Overhead expenses for these three departments were estimated as follows:

Variable overheads:
Department A- Rs. 15000 for 5000 labour hours
Department B- Rs. 4000 for 200 labour hours
Department C- Rs. 12000 for 300 labour hours
Fixed overheads:
Estimated at Rs. 40000 for 20000 normal working hours.

You are required to calculate the cost of Job 239 & calculate the price to give profit of
25% on selling price.

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