B.Com DCM2103 Cost Accounting

Description

SESSION	JULY-AUG 2025
PROGRAM	BACHELOR OF COMMERCE (B COM)
SEMESTER	III
COURSE CODE & NAME	DCM2103 COST ACCOUNTING

 

 

Set – 1

 

Q1. Explain the following concepts: 10

1. Historical Costing 5
2. Standard Costing 5

Ans 1.

1. Historical Costing

Historical costing is one of the most fundamental concepts in cost accounting. It refers to the method of determining costs based on actual expenditure incurred during production or service delivery. Under this system, all expenses related to materials, labor, and overheads are recorded after they have been incurred, and the total cost of a product or job is calculated accordingly. This approach relies on past data rather than estimates or predetermined figures, providing a factual record of the organization’s spending pattern.

The historical costing system is particularly useful for maintaining accurate cost records and analyzing the efficiency of past operations. Since it records actual costs, it helps management evaluate

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Q2. In manufacturing its products, a company uses two types of raw material, A and B, with respect to which the weekly details are as follows:

1. Normal Usage 300 units
2. Maximum usage of 450 units
3. Minimum usage of 150 units
4. Reorder Quantity for A: 2,400 units and for B: 3,600 units.
5. Reorder period for A: 4 to 6 weeks and for B: 2 to 4 weeks.

Calculate the stock levels for each type of raw material A and B- (1) Reorder Level, (2) Minimum Stock Level, (3) Maximum Stock Level, (4) Average stock level      2.5 x 4      

Ans 2.

Given (per week for both A & B)

Normal usage = 300 units

Maximum usage = 450 units

Minimum usage = 150 units

Re-order quantity: A = 2,400 units, B = 3,600 units

Re-order period: A = 4 to 6 weeks, B = 2 to 4 weeks

Average

 

Q3. If a worker takes 60 hours, for which the standard time is 75 hours, what will be his income under the Halsey Plan and the Rowan Plan? His hourly wages are Rs. 15, and he receives a 50% bonus for his time saved under the Halsey plan. He gets Rs. 12 per day for dearness allowance on an hourly basis. There are 8 working hours a day.  5+5

Ans 3.

Given

• Standard time,  hours
• Actual time,  hours
• Time saved,  hours
• Hourly wage rate,  per hour
• Dearness Allowance (DA) = ₹12 per day, paid hourly
• Working hours per day = 8 ⇒ DA per hour

DA for actual

 

 

Set – 2

 

Q4. The following information is available for Department X of Ravi Ltd:

Direct material Rs. 1,00,000

Direct wages Rs. 2,00,000

Other direct expenses Rs. 50,000

Total overhead allocated to this department is Rs. 50,000

The following information is available regarding job 001 completed in Department X:

Direct material cost Rs. 2,000

Direct labour cost Rs. 3,000

Direct expenses Rs. 400

Find out the overhead amount absorbed on job 001 under each of the following methods:

(a) Percentage on the Direct material cost basis.

(b) Percentage on the Direct labour cost basis.

(c) Percentage on the Prime cost basis.       

Ans 4.

Given (Department X totals)

• Direct Material (DM) = ₹1,00,000
• Direct Labour (DL) = ₹2,00,000
• Other Direct Expenses (DE) = ₹50,000
• Overheads (OH) allocated to Dept X = ₹50,000

Prime Cost (Dept X) =

 

Q5. Explain the following:

1. Contract Price.
2. Escalation clause
3. Work certified
4. Work uncertified 2.5 x 4    

Ans 5.    

1. Contract Price

Contract price refers to the total amount agreed upon between the contractor and the contractee for the completion of a specific contract. It represents the consideration payable to the contractor for completing the work according to the agreed terms, quality, and time schedule. The contract price is generally fixed at the time of signing the agreement, but in certain cases, it may vary depending on clauses relating to cost fluctuations or performance bonuses. The amount includes all expenses such as materials, labor, and overheads, along with the contractor’s profit margin. In long-term projects like building construction or bridge works, the contract price serves as the basis for determining progress payments, profits, and performance evaluation. It ensures clarity between the parties about total project costs and payment terms,

 

Q6. In process A, 10,000 units were put into process for Rs. 10,000. The amount of wages and manufacturing expenses was Rs. 14,000 and Rs. 4,415, respectively. The cost of other material was Rs 12,000. Normal wages were 5% of input. Wastage is sold @ Rs 0.08 per unit. The actual production is 9,600 units. Calculate the following:

1. Abnormal gain/loss.
2. Cost of production. 5+5

Ans 6.

Given

Input units

Material = ₹10,000;

Wages = ₹14,000; Mfg. OH = ₹4,415;

Other material = ₹12,000

Total process cost (debits)