KSLU Solved Question Papers
Cost Accounting
Previous Year Question Paper with Solution
B.Com. LL.B. (Five Years) · Sem 3
2022 Apr Examination
munotes.in
Mumbai
B.Com. LL.B. (Five Years) Sem 3 Cost Accounting 2022 Apr Question Paper with Solutions
First published on munotes.in on 21 October 2026.
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Contents
The questions below are the paper as Karnataka State Law University set it at the 2022 Apr examination, in the order it was set.
MarksPage
MarksPage
The Paper as Set
The questions in this volume are the questions asked at the 2022 Apr examination, reproduced as Karnataka State Law University set them, in the order it set them. Long reading passages are shortened to their first and last lines and our summary; the original paper prints them in full. Only the answers are ours. See the original question paper.
Duration 3 hours · Total marks 80 · 20 questions answered
Instructions printed on the paper
- N.B. (1) Answer all five units. (2) One essay type question and short note/Problems is compulsory from each unit. (3) Figures to the right indicates Mark. (4) Answer should be written only in English.
How to use this volume
Solve the paper first, under exam conditions and against the clock. Then read the answers here and mark your own. Reading a solution before attempting the question feels productive and teaches very little, because recognising an answer is not the same as being able to write one.
Q1
Unit I
(a)Explain various steps involved in the installation of Cost Accounting System.[10]
Answer
For full marks, cover: what installing a cost accounting system means; the preliminary study of the business; the steps of installation in order (objectives, organisation, cost centres and units, method and technique, treatment of each element, records and forms, reports, reconciliation, staff); the difficulties and how they are overcome; and a conclusion.
Meaning
Installing a cost accounting system means setting up the procedure, records and reports of costing. Through them a business finds and controls the cost of its products, jobs or services. A system that fits one business may not fit another. So the system must be designed after studying the business it is meant for.
Preliminary study
Before any step is taken, the cost accountant studies:
- The nature of the business and the products made.
- The size of the business and the number of departments.
- The process of manufacture, from raw material to finished goods.
- The existing records, especially the financial accounts.
- The information management needs, and how often it needs it.
Steps in installing the system
- Fix the objectives. Decide what the system must achieve: finding the cost of each product, fixing prices, controlling costs or all of these. The design follows from the objectives.
- Study the organisation. Find out the lines of authority and who is responsible for each cost. Each cost centre must have a manager who can control its costs.
- Choose cost centres and cost units. Divide the factory into cost centres, such as departments, machines or processes. Fix the cost unit, such as a tonne of cement, a job, a batch or a kilowatt-hour.
- Choose the method of costing. The method follows the type of production. Job costing suits printing and repairs. Process costing suits chemicals, cement and sugar. Batch, contract and operating costing suit other trades.
- Choose the technique. Decide whether to use historical costing, standard costing, marginal costing or budgetary control.
- Classify and code costs. Classify costs into materials, labour and overheads, and into direct and indirect. Give each a code so that costs are collected correctly.
- Lay down the treatment of materials. Fix the procedure for purchase, receipt, storage and issue, the stock levels and the method of pricing issues, such as FIFO or weighted average.
- Lay down the treatment of labour. Fix time keeping and time booking, the wage system, the treatment of idle time and overtime, and the charging of wages to jobs.
- Lay down the treatment of overheads. Fix how overheads are collected, apportioned to cost centres and absorbed into products, and how under- or over-absorption is dealt with.
- Design the forms and records. Prepare simple forms, such as material requisitions, job cards, time cards and stores ledgers. Too many forms make the system costly.
- Fix the reports. Decide what reports go to which manager and how often: cost sheets, variance reports and idle time reports.
- Provide for reconciliation. Arrange for the cost accounts to be reconciled with the financial accounts, or for an integrated system that keeps one set of books.
- Train and involve the staff. Explain the system to managers and workers. Their co-operation is essential, because they record the data.
- Introduce and review the system. Start in stages if needed, and review the system regularly so that it keeps pace with changes.
Difficulties in installation, and how they are met
- Opposition from staff. People see the system as extra work or as a check on them. Explaining its purpose and involving them in its design reduces opposition.
- Lack of co-operation from managers. Top management must support the system and act on its reports.
- Cost of the system. A system that is too elaborate costs more than it saves. It should be simple and in proportion to the size of the business.
- Shortage of trained staff. Training must be given before the system starts.
- Doubts about its benefit. Early, useful reports build confidence in the system.
An example
A small printing press decides to install costing. Its objective is to price each order correctly. Each order is a job, so job costing is chosen. The cost centres are composing, printing and binding. Paper is issued on requisitions and priced at weighted average. Workers fill in job cards showing the hours on each order. Overheads are absorbed at a rate per machine hour. A cost sheet is prepared for every job, and the price is quoted on it. In this way the general steps become a working system.
Main steps at a glance
| Stage | What is decided |
|---|---|
| Study | Business, products, process, records, needs |
| Framework | Objectives, organisation, cost centres, cost units |
| Method | Job, process, batch, contract or operating costing |
| Technique | Historical, standard, marginal, budgetary |
| Elements | Treatment of materials, labour and overheads |
| Stage | What is decided |
|---|---|
| Records and reports | Forms, reports, reconciliation |
| People | Training, co-operation, review |
Conclusion. A cost accounting system is installed after a careful study of the business. The installer fixes objectives, cost centres and cost units, and chooses a method and technique. He lays down the treatment of materials, labour and overheads, and designs simple forms and useful reports. It works only if the system is simple, suited to the business and supported by the people who keep it.
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