Costs and Papers Intermediate Group

Pages: 45 (13105 words) Published: March 25, 2012
REVISED SYLLABUS 2008

TEST PAPERS
Intermediate Group II
QUESTION PAPERS FOR POSTAL STUDENTS ONLY (FOR JUNE/DECEMBER 2012)

THE INSTITUTE OF COST AND WORKS ACCOUNTANTS OF INDIA DIRECTORATE OF STUDIES © Copyright Reserved by the Institute of Cost and Works Accountants of India

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Test Papers — Intermediate Group II

PAPER 8 COST AND MANAGEMENT ACCOUNTING TEST PAPER — II/8/CMA/2008/T-1 Time Allowed : 3 hours Full Marks : 100

Attempt Question No. 1 which is compulsory and any five from the rest. 1. A. Match A with B for the following : A Differential cost analysis Scatter diagram Value analysis ABC Analysis Job Evaluation B Basis for remunerating employees Decision making Inventory management Splitting of semi variable cost Promotes innovation and creativity 1×5 = 5 1×5 = 5

B. State whether the following statements are True [T] or False [F] ii. A floor cleaner in a factory is an indirect labour

i. Unavoidable costs are irrelevant to a decision to accept or reject an order. iii. Total variable costs would be lower than the original budget, if the actual output is lower than the budgeted output. iv. Absorption costing considers both the variable and fixed costs as part of product costs v. A budget in which a responsibility center manager must justify each planned activity and its estimated total cost is known as Zero based budget C. Choose the correct answer for each of the following. Indicate working wherever required. 3×5 = 15 I. Insurance Premium is an example of a. b. c. d. Opportunity Cost Sunk Cost Committed cost Discretionary cost

Test Papers — Intermediate Group II

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II. The principal disadvantage of using the physical quantity method of allocating joint costs is that a. Costs assigned to inventories may have no relationship to their value b. Physical quantities may be difficult to measure c. Additional processing costs affect the allocation base d. Joint cost, by definition, should not be separated on a unit basis III. A fixed cost that would be considered a direct cost is a. A Store Manager’s salary when the cost object is a unit of product b. An Auditor’s Salary when the cost object is the Audit Department c. The Director’s fees when the cost object is the Production Department d. A Production supervisor’s Salary when the cost object is the Stores Department IV. A Ltd. Sells its products at ` 40/unit. In a period if the company manufactures and sells 12,000 units, it incurs a loss of ` 2/unit and if the volume increase to 18,000 units, it earns a profit of ` 3.50/unit. The break –even point in rupees is a. ` 5,70,000 c. ` 5,46,207 b. ` 1,98,000 d. ` 6,00,000

V. A company has a profit-volume ratio of 30%. To maintain the same contribution, by what percentage(%) must sales be increased to offset 10% reduction in selling price ? a. 10 c. 35 2. Short Notes : (Any three) 1. Matching Concept 2. Inter-firm Comparison 3. Cost Pools 4. CVP Analysis 5. Integrated Accounting System 3. Narrate the essential factors to be considered while designing and installing a cost accounting system. 15 b. 20 d. 50 3×5 = 15

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Test Papers — Intermediate Group II

4. What is uniform costing? Explain the advantages of having uniform costing in an industry also state the major hurdles in introducing a uniform cost system? 2+7+6 = 15 5. MSD Ltd. is experiencing a high labour turnover in recent years and management would like to know the loss suffered by Company due to such labour turnover. Following figures are available for your consideration : Sales Direct Materials Direct Labour Other variable expenses Fixed Overheads ` 1200 lakhs ` 300 lakhs ` 96 lakhs on 9,60,000 manhours ` 120 lakhs ` 160 lakhs

The direct manhours include 18,000 manhours spent on trainees and replacements, only 50 % of which were productive. Further, during the year 24,000 manhours of potential work could not be availed of because of delayed replacement. The cost incurred due to separations and replacements...