Questions and Answers of Cost Accounting

Each of the following is a method by which to allocate joint costs except. (a). Relative sales value (b). Relative profitability (c). Relative weight, volume (d). Average unit cost
Explain the difference between a main product and a by-product.
How can the income from the sale of by-products be shown on the income statement?
Department I of Coromandel Chemicals conducts a process which requires mixing of materials and cooking of the mixture in batches of 1,000 lbs each. Cooking results in 10 per cent loss of weight of
Product Z is obtained after it passes through three distinct processes. The following information is obtained from the accounts for the month ending December 31, 2008. 1,000 units at Rs. 3 each
Does the showing of income from by-products on the income statement influence the unit cost of the main product?
Joint costs are most frequently allocated based upon relative.(a). Profitability (b). Conversion costs (c). Sales value (d). Prime costs.
The finished product of a factory has to pass through three Processes A, B and C. The normal wastage of each process is 2% in A, 5% in B and 10% in C. The percentage of waste is computed on the
What is the difference between physical quantity method and sales value method?
In order to compute equivalent units of production using FIFO method of process costing, work for the period must be broken down to units.(a). Completed during the period and units in ending
Define and explain the term joint products and by-products. Enumerate the method which may be employed in costing joint product.
From the industries listed below, choose the one most likely to use process costing in accounting for production costs: (a). Road builders (b). Electrical contractor (c). Newspaper
What are transferred-in costs as used in a process cost accounting system?(a). Labour that is transferred from another department within the same plant instead of hiring temporary workers from the
A product, which uses 100 tons as input per month passes through two Processes. The details of cost in Process 1 for April 2003 are:The total loss in Process 1 is 2% of input, and the scrap is 8% of
The units transferred in from the first department to the second department should be included in the computation of the equivalent-units divisor for the second department for which of the following
The product of a manufacturing concern passes through two Processes A and B and then to finished stock. It is ascertained that in each process 5% of the total weight is lost and 10% is scrap, which
Explain with an example the concept of equivalent production for valuation of work-in-progress.
Define joint products and by-products. Explain the various bases available for apportionment of joint costs to joint products.
Purchased materials added in the second department of a three department process that do not increase the number of units produced in the second department would.(a). Not change the amount
XYZ Ltd. manufactures and sells three chemicals produced by consecutive processes known as X,Y and Z. In each process, 2% of the total weight put in is lost and 10% is scrap, which from processes X
A Product passes through three processes. Figure relating to production for the 6 months of 2005 are as follows: Management expenses were Rs. 17,500, selling expenses Rs. 10,000 and interest on
Distinguish between normal and abnormal wastage of materials with specific reference to their accounting treatment and control.
Purchased materials added in the second department of a three-department process that increase the number of units produced in the second department would always. (a). Change the direct labour
What are equivalent units of production? Mention two principal methods of calculating equivalent units.
The percentage of completion of the beginning work-in-process inventory should be included in the computation of the equivalent units of production for which of the following methods of process
Explain briefly the procedure for the valuation of work-in-progress.
In the computation of manufacturing cost per equivalent unit, the weighted-average method of process costing considers.(a). Current costs only. (b). Current costs plus cost of ending
Mention the different methods of by-product cost accounting.
In a given process-costing system, the equivalent-units divisor is computed for the weighted-average method. With respect to conversion costs, the percentage of completion for the current period only
Process 2 receives units from Process 1 and after carrying out work on the units transfers them to Process 3. For the accounting period the relevant data were as follows:The costs of the period were
The following data relate to Process Y for accounting period 2. At the beginning of period 2, there were 800 units partly completed which had the following values:During the period 4,300 units
Calculate the estimated cost of production of by-products X and Y at the point of separation from the main product.Selling expenses amount to 25% of total works cost, that is, including both
A company manufactures products A, B, and C from a joint process. Additional data are as follows:Derive the values for the lettered spaces. Units produced Joint costs Sales value
What do you understand by operating costing? In what industries is this costing applied?
A Truck starts with a load of 10 tonnes of goods from station P. It unloads 4 tonnes at station Q and rest of the goods at station R. It reaches back directly to station P after getting reloaded with
Write notes on.(i). Transport-costing (ii). Power house costing(iii). Canteen costing.
Distinguish between operating costing and operation costing.
During June 2007, the following transactions took place in XYZ Co. Ltd. You are required to enter the transactions in the financial and cost books. (i) Materials purchased: (a) Credit
What is non-integral accounting system?
The following figures have been extracted from the cost records of a manufacturing unit: Finished products: Entire output is sold at a profit of 10% on actual cost from work-in-progress. Other
What are cost control accounts? Describe their advantages?
As at 31st March, the following balances existed in a companys cost ledger:During the next three months the following items arose: You are required to write up the accounts and schedule the
The cost ledger of a company shows the following balances as on January 1, 2007. Work-in-progress control A/c Finished stock ledger control A/c Works overhead suspense A/c Office and administration
Mention the principal ledgers maintained in financial accounts and cost accounts.
In the course of physical verification of stores as on 31st March 2007, following differences are revealed in case of AB Ltd.Prepare journal entries in the cost ledger to give effect to the above
What do you understand by integrated accounts, and what are the principles involved? State the advantages of Integrated accounts.
What is an integrated accounting? State its advantages.
What do you understand by the integrated accounting system? State its advantages and prerequisites.
Distinguish between Interlocking and Integration System of cost and financial accounts?
Explain the accounts kept in Integrated Accounting System.
State the advantages of integrated cost and financial accounts.
Explain the basic requirements of an Integrated System of Accounting.
What is integrated accounting? Briefly describe the merits of integration.
Discuss the distinguishing features of a process cost system?
M/s Indu Industries Ltd. are the manufacturers of moonlight torches. The following data relate to manufacture of torches during the month of March 2007:Prepare Cost Sheet showing the cost and the
Explain the nature of single costing.
The following details have been obtained from the cost records of Comet Paints Limited: Prepare a production account giving the maximum possible break-up of costs and profit. Stock of raw
Describe briefly the procedure of presenting costs under single costing. Explain giving an example.
The Managing Director of a small manufacturing concern consults you as to the minimum price at which he can sell the output of one of the departments of the company which is intended for mass
The following is the summarised Trading and Profit and Loss A/c of K. Waterproof Manufactures, Ltd., for the year ending 31st march, 2007 in which year 800 waterproofs were sold by the said
Explain the nature of operation costing.
Baluja Shoe Company manufactures two types of shoes A and B. Production costs for the year ended 31st December 2008 were as follows:There was no work-in-progress at the beginning or at the end of the
Meera Industries Limited is a single product organisation having a manufacturing capacity of 6,000 units per week of 48 hours. The output data vis-à-vis different elements of cost for three
The following information for the year ended 31st December, 2008 is obtained from the books and records of a factory:Factory overheads are 80% of wages. Office overheads are 25% of factory cost and
In a manufacturing company, a product passes through 5 operations. The output of the 5th operation becomes the finished product. The input, rejection, output and labour and overheads of each
Xavier company manufactures many products. Each product passes through two production departments, which have the following cost structures: (a). Calculate the unit cost of each of these jobs on
The following information for the year ending December 31, 2001 is obtained from the books and records of a factory:(i). Consolidated completed jobs acount,(ii). Consolidated work-in-progress
(i). What is the nature of job costing? How are the costs recorded on job orders? (ii). Explain the meaning of contract costing and batch costing.
Which of the following production activities would be most likely to employ job order costing? (a). Ship building (b). Candy manufacturing (c). Toy manufacturing (d). Crude oil
Indicate how you would deal with the following items: (a). Plant and machinery pruchased and used on contract work. (b). Amounts received from contractee. (c). Materials lying unused
A factory uses a job costing system. The following data are available form the books at the year ending 31st March 2002. Required:(a). Prepare a cost sheet indicating the prime cost, works cost,
In job-order costing, the basic document to accumulate and ascertain the cost of each order is the.(a). Purchase order (b). Requisition sheet (c). Invoice (d). Job cost sheet
Honesty Engineering Works has a machining shop in which it manufactures two auto parts, P1 and P2 out of forging F1 and F2. For the quarter ending December 2003, following cost data are available:You
(i). Discuss the implications of cost-plus contracts from the viewpoint of:(a). Manufacturer (b). Customer(ii). What is the relevance of the escalation clause provided in a contract?
Which of the following will not be used in job-order costing? (a). Standards. (b). Marginal costing. (c). Averaging of direct labour and material rates. (d). Factory overhead
Describe briefly the nature of accounting problems associated with job costing.
Engineers Ltd. undertook several contracts during the year 2001. The following information relate to contract No. 107: The contract took 13 weeks on its completion. The values of loose tools and
A manufacturing company has an installed capacity of 1,20,000 units per annum. The cost structure of the product manufactured is an under: The capacity utilisation for the next year is estimated
How will you treat profit on incomplete contracts in cost accounts?
The following is the summarised information relating to contract accounts number 100: Included in the above information are wages Rs. 3,500, materials Rs. 4,000 and other expenses Rs. 2,500
What do you understand by cost-plus contract and Escalation clause in contract costing?
ABC Ltd. began to trade on 1st January, 2006. During 2006 the company was engaged on only one contract of which the contract price was Rs. 5,00,000. Of the plant and materials charged to the
Explain the following: (i). Notional profit in contract costing. (ii). Retention money in contract costing.
Compute a conservative estimate of profit on a contract (which is 80% complete) from the following particulars. Illustrate at least four methods of computing the profit: (i) Total expenditure to
Discuss the process of estimating profit/loss on incomplete contracts.
A contractor commenced work on a particular contract on 1st April, 2001. He closes the books of accounts for the year on 31st December of each year. The following information is revealed from his
SV construction Ltd. have obtained a contract for construction of a bridge. The value of the contract is Rs. 12 lakhs and the work commenced on 1st October, 2001. The following details are shown in
Kapoor Engineering Company undertakes a long-term contract which involves the fabrication of prestressed concrete blocks and the erection of the same on consumer's site. The following is
Pioneer Construction Company Ltd. obtained a contract for the erection of a multi-storey building. Building operations started in July 2001. The contract price was Rs. 9,00,000. On 30th June 2002,
A contractor has entered into a long-term contract at an agreed price of Rs. 1,75,000 subject to an escalation clause for materials and wages as spelt out in the contract and corresponding actual are
The following information relates to a building contract for Rs. 10,00,000. The value of plant at the end of 2001 and 2002 was Rs. 7,000 and Rs. 5,000 respectively. Prepare: (i). The
ABC Company produces two types of stereo units. Activity data follows: Required: (i). Calculate the consumption ratios for each activity. (ii). Group activities based on the
ABC company has been incurring two types of overhead costs-material handling and quality inspection. The costs expected for these categories for the coming year are as follows: The company
What is Activity-Based Costing? Why is it needed?
Assume that firm makes four products A, B, C and D. Data for the past period are as follows: Direct labour costs Rs. 7 per hour: Find the unit production cost.(a). Using conventional
What is a cost driver? What is the role of cost driver in tracing costs to products?
Explain the steps in applying Activity-Based Costing (ABC) in a manufacturing Company.
How are activities grouped in a manufacturing company?
Distinguish between activity-based costing and traditional costing system.
Define unit level activities, batch level activities, product level activities and facility level activities.

Showing 700 - 800 of 1110