INSTITUTE OF INFORMATION TECHNOLOGY AND MANAGEMENT

Subject: COST ACCOUNTING Subject code: 110

Question bank Unit I FACULTY: SUNITHA RAVI

Numerical
Q1. Calculate a) cost of raw materials consumed b) total cost of production c) cost of goods sold d)
the amount of profit from the following details
Opening stock: Raw materials 5,000
Finished goods 4000
Closing stock: Raw materials 4,000
Finished goods 5,000
Raw materials purchased 50,000
Wages paid to labourers 20,000
Chargeable expenses 2000
Rent, rates and taxes 5000
Power 2400
Factory heating and lighting 2000
Factory insurance 1000
Experimental expenses 500
Sale of wastage of material 200
Office management salaries 4000
Office printing and stationary 200
Salaries of salesman 2000
Commission of travelling agents 1000
Sales 1, 00,000
Q. 2 The cost of sale of production A is made up as follows:
Materials used in manufacturing 5500
Materials used in packing material 1,000
Materials used in selling the product 150
Materials used in the factory 75
Materials used in the office 125
Labour required in production 1,000
Labour required for supervision of the management for factory 200
Expenses direct factory 500
Expenses indirect factory 100
Expenses office 125
Depreciation office building and equipment 75
Depreciation factory 175
Depreciation factory 350
Selling 500
Freight on materials 500
Advertising 125
Prepare a cost sheet. Assuming that all products manufactured are sold, what should be the selling
price to obtain a profit of 25% selling price?
Q3. Calculate the prime cost, factory cost, total cost of production and cost of sales from the
following particulars:
Raw material consumed 40,000
Wages paid to labourers 10,000
Directly chargeable expenses 2,000
Oil and waste 100
Wages of foreman 1,000
Storekeepers wages 500
Electric power 200
Lighting: Factory 500
Office200
Rent: Factory 2,000
Office1, 000
Repairs and renewals:
Factory plant 500
Machinery 1000
Office expenses 200
Depreciation:
Office premises 500
Plant and machinery 200
Consumable stores 1,000
Managers salary 2,000
Directors fees 500
Office printing and stationary 200
Telephone charges 50
Postage and telegrams 100
Salesmans commission and salary 500
Travelling expenses 200
Advertising 500
Warehouse charges 200
Carriage outward 150
Q.4 Calculate the value of inventory under perpetual inventory system using
a) FIFO
b) LIFO
c) HIFO
d) Weighted average stock method
Jan 2, Purchased 4000 units @ 4 per unit
Jan20, Purchased 500 units @ 5 per unit
Feb 5, Issued 2000 units
Feb 10, Purchased 6000 units @ 6 per unit
Feb 12, Issued 4000 units
March 2, Issued 1000 units
March 5, Issued 2000 units
March 15, Purchased 4500 units @ 5.50 per unit
March 20, Issued 3000 units
Q.5 Calculate the value of inventory under periodic inventory system
The physical inventory taken on June 30 show a balance of 1000 liters of chemical; Y in hand @ Rs 2.28 per
litre.
The following purchases were made during July:
July 1, 14,000 liters @ 2.30 per litre
July 7, 10,000 liters @ 2.32 per litre
July 9, 20,000 liters @ 2.33 per litre
July 25, 5,000 liters @ 2.35 per litre
A physical inventory on July 31 disclosed that there is a stock of 10,000 litres.
You are required to compute the inventory value on July 31, by each of the following methods:
a) FIFO
b) LIFO
c) Weighted average stock method
Q.6 Two components, A and B are as follows:
Normal usage 150 units per week
Minimum usage 125 units per week
Maximum usage 175 units per week
Reorder quantity A: 400 units
B: 600 units
Reorder period A: 4 to 6 weeks
B : 2 to 4 weeks
Calculate for each component:
a) Reorder level
b) Maximum level
c) Minimum level
d) Average stock level
Q. 7 Calculate the economic order quantity from the following particulars:
Annual consumption 1600 units
Cost of material per unit Rs 40
Cost of placing and receiving one order RS 50
Annual carrying cost of inventory 10% of inventory value
THEORY

8. Objectives and limitations of cost accounting
9. Importance of cost accounting
10. Classification of cost
a) Shut down and sunk cost
b) Product and period cost
c) Expired and unexpired cost
d) Fixed , variable and step cost
e) Opportunity cost
11 Methods of costing
12. Elements of cost