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Match the Pairs :
| Column 'A' | Column 'B' |
| (1) Plant Lost or Damaged | (a) `2/3 xx"Notional Profit"xx"Cash Received"/"Work Certified"` |
| (2) Plant Purchased | (b) No profit should be taken into Account |
| (3) Work Certified >`1/2` of Contract Price | (c) Credited to Contract Account |
| (4) Work Uncertified | (d) Debited to Contract Account |
| (5) Contract Less than 25% Complete | (e) Valued at Cost |
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Multiple Choice Question :
Target Costing = Selling Price (-) _______
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Multiple Choice Question :
__________ is a part of management strategy to focus on cost reduction and effective cost management.
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Multiple Choice Question :
In Activity Based Costing, ________are grouped into activities.
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Multiple Choice Question :
____________ provides an overall framework for considering total incremental costs over the life span of the product.
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Multiple Choice Question :
____________ is the standard way of comparing one product to another.
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State whether the following stntement is True or False :
Activity based costing is an alternative to process costing.
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State whether the following stntement is True or False :
A cost driver is an activity) which generates cost.
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State whether the following stntement is True or False :
Activity based costing is a complement to total quality management.
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State whether the following stntement is True or False :
Lite Cycle Costing is the process of compiling all costs that the owner or producer of an asset will incur over its life span.
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State whether the following stntement is True or False :
Bench-marking strives for continuous improvement.
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Match the Pairs :
| Column 'A' | Column 'B' |
| (1) Activit Based Costing | (a) Long-term Rewarding |
| (2) Life Cycle Costing | (b) Focus on Change |
| (3) Bench-marking | (c) Company puts the resources together |
| (4) Target Costing | (d) Cost Drivers |
| (5) Planning and Research Stage of Bench-marking | (e) Pre-active Cost Planning |
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Vaishali undertook a contract for the construction of house on 1.1.2017. The contract price was Rs. 22,50,000 The following details are available for 2017 :
| Particulars | (Rs.) |
| Materials purchased and issued | 3,60,000 |
| Materials issued from stores | 45,000 |
| Labour | 1,35,000 |
| Plant installed at site | 1,80,000 |
| Direct expenses | 90,000 |
| Establishment Charges | 22,500 |
| Materials returned to stores | 22,500 |
| Materials on hand at the end of the year | 9,000 |
| Plant in hand at the end of the year | 1,35,000 |
| Wages outstanding | 27,000 |
| Direct expenses outstanding | 36,000 |
| Work uncertified | 95,400 |
| Cash received (80% of work certified) | 9,00,000 |
Prepare the Contract Alc and show the relevant items in Balance Sheet.
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ABC Co. Ltd., Furnishes you with the following information for the year ended 31.03.2017 and 31.03.2018
| Year Ended | 31.03.2017(Rs.) | 31.03.2018(Rs.) |
| Material Issued | 13,000 | 24,700 |
| Sub-contract Charges | 4,500 | 20,000 |
| Work Certified during the year | 20,000 | 80,000 |
| Closing Stock of Material at Site | 3,000 | - |
The total Contract price is Rs. 1,00,000. The entire amount was received by 31.03.2018. As per the accounting policy adopted by the company, no profit is to be considered unless the value of work certified at the year end exceeds 25% of the Contract Price.
Prepare Contract Account for the year ended 31st March, 2~ 17 and 31st March, 2018.
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The Standard cost of a certain Chemical mixture is :
40% Material 'A' at Rs. 400 per tonne
60% Material 'B' at Rs. 600 per tonne
A standard loss of 10% is expected in production.
During a period there is used :
90 tonnes Material 'A' at the cost of Rs. 360 per tonne.
110 tonnes Material 'B' at the cost of Rs. 680 per tonne.
The weight produced is 182 tonnes of good production .
Calculate :
(a) Material Cost Variance, (b) Material Price Variance,
(c) Material Usage Variance, (d) Material Mix Variance,
(e) Material Yield Variance.
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The standard cost of a certain chemical mixture is :
35% Material 'A' at Rs. 25 per kg.
65% Material 'B' at Rs. 36 per kg.
A standard loss of 5% is expected in production.
During a period, the actual use was :
125 kg of Material 'A' at Rs. 27 per kg.
275 kg of Material 'B' at Rs. 34 per kg.
The Actual Output was 365 kg.
Calculate:
(a) Material Cost Variance (b) Material Price Variance
(c) Material Usage Variance (d) Material Mix Variance
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The following information is available from the books of a manufacturin company which uses three types of materials for production:
| Material | Standard | Actual | ||||
| Quantity (Kgs) | Price (Rs.) | Total (Rs.) | Quantity (Kgs) | Price (Rs.) | Total (Rs.) | |
| X | 2,500 | 6.00 | 15,000 | 2,000 | 6.00 | 12,000 |
| Y | 2,000 | 3.75 | 7,500 | 2,500 | 3.60 | 9,000 |
| Z | 1,500 | 3.00 | 4,500 | 2,000 | 2.80 | 5,600 |
| 6,000 | 6,500 | (Actual loss) |
||||
| Less: 10% Normal Loss | 600 | 1,100 | ||||
| 5,400 | 27,000 | 5,400 | 26,600 | |||
Calculate:
(a) Material Cost Variance,
(b) Material Price Variance,
( c) Material Usage Variance,
( d) Material Mix Variance,
( e) Material Yield Variance.
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The standard material inputs required for 1,000 kg of a finished product are given below :
| Material | Quantity (kg.) | Standard Rate per kg.(Rs.) |
| A | 450 | 20 |
| B | 400 | 40 |
| C | 250 | 60 |
| 1,100 | ||
| Less: Standard Loss | 100 | |
| Standard Output | 1,000 |
Actual produption in a period was 20,000. kgs. of the finished product for which the actual quantities of material used and the prices thereof are as under :
| Material | Quantity used | Actual Rate per kg. (Rs.) |
| A | 10,000 | 19 |
| B | 8,500 | 42 |
| C | 4,500 | 65 |
Calculate:
(1) Material Cost Variance,
(2) Material Price Variance,
(3) Material Usage Variance,
(4) Material Mix Variance
(5) Material Yield Variance.
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The standard mix of Product A2 is as follows :
| Kgs. | Material | Price per Kg.(Rs.) |
| 45 | X | 6 = 00 |
| 25 | Y | 4 = 50 |
| 30 | Z | 9 = 50 |
The standard loss in production is 10% of input. There is no scrap value. Actual Production for a month was 7,425 kgs. of A2. Actual Purchases and Usage of Material during the month were :
| Kgs. | Material | Price per Kg.(Rs.) |
| 4,200 | X | 6 = 00 |
| 1,700 | Y | 4 = 25 |
| 2,600 | Z | 9 = 75 |
Calculate:
(a) Material Cost Variance,
(b) Material Price Variance,
(c) Material Usage Variance,
(d) Material Mix Variance,
(e) Material Yield Variance.
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The Standard mix of a product is as follows :
| Material | Units | Price per Unit (Rs.) |
| A | 30 | 20 |
| B | 20 | 15 |
| C | 50 | 30 |
Standard Loss in Production - 10%
Actual Production - 8,000 units.
The actuaI purchases and consumption of materials during the month were:
| Material | Units | Price per Unit (Rs.) |
| A | 2,500 | 25 Ps. |
| B | 1,600 | 10 Ps. |
| C | 4,500 | 40 Ps. |
Compute the various 'Material Variances'.
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