MCom Part II SEM III 2022 2023 Jul 2023 ADV,ACCTG,CORP.ACCT & FIN.MGMT.ADVANCED COST ACCOUNTING Question Paper - Mumbai University | munotes

Questions asked in this paper

1. Q1 All questions are compulsory
2. Q2 Figures to the right indicate full marks Q-1 From the following information relating to KKN Company Ltd. Prepare Process Cost Account for Process HI for the year 2022. (15) Opening Stock IN Process II 5,000 units of Rs.36,000 Transfer from Process II 2,13,000 units of Rs.8,27,000 Direct Material added in Process HI Rs. 4,01,800 Units Transferred to Process 1,89,000 units Degree of Completion: There was a normal loss of 5% production and unit scraped were sold at Rs. 1.50 Q-1 Prepare a statement of equivalent production, statement of cost, process account from the following information using average costing method. (15) Opening Stock 50000 Units During the period 1,50,000 units were Material Rs. 25,000 completed and transferred to Process II Overheads Rs. 25,000 Degree of completion ct Code: 72211 A: Advanced Accounting, Corporate Accounting and Financial Management : Advanced Co
3. Q2 ABC limited is following activity-based costing. Budgeted overheads and cost driver volumes are as follows: (15) Material 11,59,400 No. of orders 2200 14,40,000 No. of machine hours 48000 Actual: The company has produced a batch of 7,500 components. Its material cost was Rs. 4,00,000 and labour cost is Rs. 7,00,000 Usage activities of the said batch are as follows: Quality control inspection- 84 and Machine hours- 5,400
4. Q1 Cost driver rates that are used tracing appropriate amount of overheads to the said
5. Q2 Total cost of batch of 7500 components
6. Q2 BBQ company has six departments A, B, C, D, E and F. Under traditional method they have allocated manufacturing overhead using one cost pool based on direct labour hours. The accounting staff has provided the following estimates applicable to traditional and ABC allocation of manufacturing costs for the year: (15) Management is assessing if ABC should be used, and has determined that Department C used the following: 25 setups, 60 inspections, 900 production runs, 4,500 maintenance hours and 1800 direct labour hours during the year
   • A. Using traditional allocation, how much overhead cost is allocated to Dept. C?
   • B. Using ABC, how much overhead cost is allocated to Dept. C? ct Code: 72211 A: Advanced Accounting, Corporate Accounting and Financial Management : Advanced Co
7. Q3 (a). A and B are two divisions of a company. A makes a single product, which it sells only to B for incorporation into B’s products. The relevant costs and revenues are: (07) Quantity (Units) Cost to A (after deducting | Revenue of B What is the appropriate transfer price per unit between division A and B. and how many units should be produced?
8. Q3 (b) A company has two department, Department ‘A’ and Department ‘B’ Division A has a budget of selling 2,00,000 units of a particular component X to fetch a return of 20% on the The following particulars of division ‘ A’ are also known: Plant and Equipment’s Rs. 6,00,000 However, there are certain constraints in marketing and only units of the component ‘X’ can be directly sold to the market at the proposal price. It has been gathered that the balance 50,000 units of component ‘X’ can be taken up by Division ‘B’. Division ‘A’ wants a price of Rs. 4 per unit of but Division ‘B’ is prepared to pay Rs. 3 per unit of Division ‘A’ has another option on hand, which is to produce only 1,50,000 units of component ‘X’. This will reduce the holding of assets by Rs. 2,00,000 and fixed overhead by Rs. 25,000. You are required to advise the most profitable course of action for Division ‘ A’
9. Q3 (a) Star Company Ltd has three divisions P,Q and R. Following are the details of their performance for a period: (07)
   • a. You are required to comment on the performance of three divisions on the basis of Return on Investment
   • b. Using the information given above and assuming a cost of capital of 10%. Find the RI of various divisions and comment on their performance ct Code: 72211 A: Advanced Accounting, Corporate Accounting and Financial Management : Advanced Co
10. Q3 (b). The Diamon Designer Ltd is segmented into two divisions, Interior and Exterior Selected data from the divisions financial statement are given below: (08) Income before interest and 15,20,000 You are required to:
11. Q1 Calculate the ROI for the two divisions and the RI taking a capital charge of 15% Which is the most profitable division?
12. Q2 What will be RI if Cost of Capital Charge of 10%
13. Q4 (a) State whether following statements are true or false: (any7) 7 marks
14. Q1 Transfer price will act as a check on supplier’s prices
15. Q2 Under actual cost of production method transfer price will be determined based on the cost of production arrived as in traditional method of valuation of inventory
16. Q3 divisional profit less cost of capital employed
17. Q4 Marketing department is a cost centre
18. Q5 Traditional method of overhead allocation is more accurate than ABC Costing
19. Q6 ABC costing is used only to allocate the direct cost
20. Q7 ABC costing focuses on reducing costs and improving processes
21. Q8 The sale value of units of abnormal loss is credited to the abnormal loss account
22. Q9 Invisible waste has no sale value
23. Q10 The unrealized profit in closing stock is eliminated by creating a stock reserve in respect of the stock lying in a process
24. Q4 (b) Multiple Choice Questions: (any 8) 8 marks
    • c. co-ordination of divisional objectives
    • d. all of the above
25. Q2 Market price affected by
    • b. government policy
    • c. organizational policy
    • d. all of the above ct Code: 72211 A: Advanced Accounting, Corporate Accounting and Financial Management : Advanced Co
26. Q3 Responsibility centre concerned with profit is
    • a. cost centre
    • b. profit centre
    • c. revenue centre
    • d. budget centre
27. Q4 Profit centre is evaluated by
    • a. cost variance
    • b. profit margin
    • c. EVA
28. Q5 Cost allocation basis in activity-based costing should be
    • a. cost drivers
    • b. cost pools
    • c. activity centres
    • d. resources
29. Q6 ABC is
    • a. of accounting for material
    • b. amethod of allocating indirect cost
    • c. another name of benchmarking
    • d. acost objects
30. Q8 Process cost is based on the concept of
    • a. Average cost
    • b. Marginal cost
    • c. Standard cost
    • d. Differential cost
31. Q9 Which of the following does not use process costing?
    • a. Oil refining
    • c. Sugar
    • d. Aircraft manufacturing
32. Q10 Abnormal gains are equal to

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