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NOTE: 1- All questions are compulsory.

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2- Figures to the right indicate marks.

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3- Working notes are forming part of your answers.

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Q1(a) Choose the correct alternative and rewrite it. (Any eight) (8)

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1- Budgetary control helps the management in…

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a- Obtaining bank credit

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b- Issue of shares

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c- Getting grants from government

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2- A key factor is one which restricts… DE

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a. The volume of production

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b. The volume of sales

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c. The volume of purchase

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3- The process of budgeting not helps in the control of

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a. Cost of production

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b. Capital Expenditure 28

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c. Debt payment
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4- If semi-variable cost at 60% level of production is Rs 40,000 and at 80% level

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is Rs 44,000. What will it be at 100% level of production?
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a. 45000
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c. 51000
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5- CVP analysis requires costs to be categarized as _____.

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a. Fixed or variable
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b. Direct or indirect
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c. Standard or actual
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6- Contribution - Fixed Cost = _______

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a. Sales
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b. Profit
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c. Variable cost
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a- Standard costing
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b- Marginal costing
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c- Process costing
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8- If material price variance is R.s. 3000 (A) and actual price is R.s. 1.5 & actual
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quantity is 1500 unit. The standard material price will be ___________.

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a- 2.5
3A

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b- 3.5
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c- 4.5
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9- A standard cost is ______.

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a- The total amount that appears on the budget for product costs

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b- A pre-determined cost which is calculated from management's standards

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of efficient operation

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c- The total number of units x the cost expected

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10- Sales quantity variance is equal to (______ Quantity - Revised Quantity) *

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Budgeted Price.

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a. Actual

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b. Standard

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c. Budgeted

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Q1(b) State whether following statements are True or False. (Any seven) (7)

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1- Budgetary control is costly for small organizations.
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D

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9

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2- Cash Budget shows budgeted receipts and payments. 8

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3- At BEP total cost is equal to total revenue.

6A
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4- Marginal cost is fixed cost. 28

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5

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5- At shutdown point operating loss is equal to loss due to shut down.
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6- Decision to accept or reject export order depends on fixed cost only.
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8D
5

7- Excess of actual cost over standard cost is a favourable variance.

3A
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8- Material mix variance arises due to change in rate.

89
DE
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9- Idle time variance is always favourable.

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10- Overheads include indirect material, labour and expenses.

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Q2-A Niranjan foods products limited has prepared the following Sales Budget for the (15)
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six months of 2023.

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89

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8A

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A

15

Months Sales (Units)

98
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7C

January 21,600
A

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01

6
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01

4C
55
3
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89
8A
5F

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AC

February 31,200
6A
8D

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01

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BD

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5F

March 24,400
AC
58
7C
8
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April 20,800
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May 19,600
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June 14,000
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A
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01
C

The inventory of finished products at the end of every month is equal to 25% of
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the sales estimate for the next month.

15

8D
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On 1 January 2023 there were 5,400 units of product on hand. There is no work
FC
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58

in process at the end of any month.

3A

15

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01

4C

Every unit of product requires two types of materials in the following quantities.
0

FC
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6A
15

Material A: 4 kg.
3A

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4C
55
20

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Material B: 5 kg.
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Material equal to 50% of the next month's consumption are to be in hand at the

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end of every month. Inventory of Material A and Material B on 1st January 2023

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6A

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was maintained on that basis.

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Budgeted prices for the purchase of material are

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Material A: 3 per kg.

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Material B: 2 per kg,

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Stock of Material A and B on 1st January 2023 was 48,000 kg. and 60,000 kg.

D
A

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01

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3

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4
A2
Prepare materials Budget for the first quarter of 2023 in a logical form showing

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C

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58

15

98
the quantities of each type of material to be purchased every month. Also prepare

56
47

01

4C

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93

FC
C5
Production and Purchase Budget. DE

C2

BD

8A
8

6A
15

3A

15
47
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4C

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55
20

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E
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AC
OR

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D

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Q2-B A company expects to have Rs. 37,500 cash in hand on 1 April, 2022 and requires (15)

93
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st

20

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5

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5F

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AC
58
you to prepare an estimate of cash position during the three months, April to June,
D

C
8

15
01

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9

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8

01

4C
C

3
2022. The following information is supplied to you :
A2

D0
BD

C5
89
DE
5F

C2

6A
98

Factory Office Selling

15

CB
3A
01
4C

47
28

55
C

20
Sales Purchases Wages Expenses Expenses Expenses
BD

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DE
A
6A

AC
58
5

7C
8

Rs. Rs. Rs. Rs. Rs. Rs.

1
4C

56
9
55

28

01
0

FC

93
E4
BD

C5
AC

8A
6A

C2

58
8D
5

February 75,000 45,000 9,000 7,500 6,000 4,500

3A
1
4C

9
55

47
93

01
D0

FC

A2
AC

89
DE
58

6A

C2
March 84,000 48,000 9,750 8,250 6,000 4,500
CB

98

15
01

1
55

47
28
93

FC
4

20
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AC

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A
58

April 90,000 52,500 10,500 9,000 6,000 5,250

A

15

7C
98
56
47

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4C

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93

D0

C
5

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May 1,20,000 60,000 13,500 11,250 6,000 6,570

C

A
58

6A

5F
CB

8D
3A

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47
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01

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55

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June 1,35,000 60,000 14,250 14,000 7,000 7,000

A2
89

A4
DE
8A

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C
15

CB
A

15

98
56
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28

Other Information :
20

FC
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9

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8A
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58

Period of credit allowed by supplier – 2 months

7C

i.
A

15
01

6
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28

01

4C
55
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E4

ii. 20% of the sales is for cash and period of credit allowed to customers for
D0
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8A
5F

C2

AC

6A
8D

15

CB

credit sales is one month

01

C9

47

55
93
A2

20

Delay in payment of all expenses – 1 month

BD

iii.
A4
DE
5F

AC
58
7C
8
1

iv. Income tax of Rs. 57,500 is due to be paid on June 15 , 2022.

4C

56
C9

28

th
01
D0

93
E4

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8A
6A

v. The company is to pay dividends to shareholders and bonus to workers of

5F

C2

8
CB

8D

15

3A
01

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47

Rs. 15,000 and Rs. 22,500 respectively in the month of April

A2
A4

20
BD

89
DE
5F

vi. Plant has been ordered to be received and paid in May. It will cost
7C
8
56

15
01
4C

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28

Rs. 1,20,000
C5

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20
BD

A
6A

5F

From the following particulars you are required to calculate:

8D
3A

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8
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C

9
55

Q3-A 1- Break Even sales (15)

FC

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2- Profit volume ratio

15

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3- Margin of safety for 2022

FC
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58

4- Sales to earn a profit of 10% on sales.

3A

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5- Profit when sales was Rs. 9,00,000.

0

FC
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89
C2

BD
6A

Particulars 2021 (R.s.) 2022 (R.s.)

15

3A

15
47

4C
55
20

Total cost 3,24,000 4,68,000

D0
89
DE

AC

6A
7C

Sales 3,60,,000 5,40,000

15

CB
55
93
E4

20

OR
A4
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Q3-B From the following particulars, find the most profitable product mix and prepare (15)

2
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8

15
1
4C

47
a statement of profitability of that product mix:

D0

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DE
8A
6A

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15
Particulars Product Product Product

01

9
55

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FC
A4

20
BD
A B C

AC

DE
8A
5

7C
6

1
4C

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55

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D0

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2
Units Budgeted to be produced and sold 1,800 3,000 1,200

A
58

6A

5F
CB

D
A

98
01

01
55

8
3
Selling Price per unit Rs. 60 55 50

FC

4
A2
9

A4
C2

BD
C

DE
58

15

98
56
47

01

4C

28
Requirement per unit:

93

FC
C5
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BD

8A
8

6A
15

3A

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28
Direct Material 5 Kg 3 Kg 4 Kg

4C

C9
55
20

D0
89
E
8A

AC

5F
D

15

CB

98
56
C9

Direct Labour 4 hrs 3 hrs 2 hrs

7
8

01
93
E4
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20

FC
5

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5F

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AC
58
D

C
8

Variable Overheads Rs. 7 Rs. 13 Rs. 8

15
01

56
9

47
8

01

4C
C

3
A2

D0
BD

C5
89
DE
5F

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6A
Fixed Overheads Rs. 10 Rs. 10 Rs. 10
98

15

CB
3A
01
4C

47
28

55
C

20
BD

A4
DE
A
6A

Cost of Direct Materials per Kg. Rs. 4 Rs. 4 Rs. 4

AC
58
5

7C
8
1
4C

56
9
55

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01
0

FC

93
E4
BD

C5
AC

8A
Direct Labour hour rate Rs. 2 Rs. 2 Rs. 2
6A

C2

58
8D
5

3A
1
4C

9
55

47
93

01
D0

FC

Maximum Possible units of Sales 4,000 A2

5,000 1,500
AC

89
DE
58

6A

C2
CB

98

15
01

1
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93

All the three products are produced from the same direct material using the same
FC
4

20
C2

BD
AC

DE
A
58

15

7C
types of machines and labour. Direct labour, which is the key factor, is limited to
98
56
47

01

4C

28
93

D0

C
5

E4
DE

18,600 hours.
C2

A
58

6A

5F
CB

8D
3A

Q4-A From the following particulars, calculate material variances including mateial (15) 98
47
28

01

1
55

D0

FC

A2
89

A4
DE
8A

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sub-variances. The standard mix required for a product is, Material A - 60% at
C
15

CB
A

15

98
56
C9

47
28

standard price Rs. 40 per kg and Material B-40% at standard price Rs. 60 per kg.
3
20

FC
C5
9

A4
DE
8A
5F

BD

Normal Loss is 10% of total input. Actual output obtained during the period was
58
7C

15
01

6
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28

01

3,600 units for which Actual consumption of materials are:

4C
55
3
E4

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BD

89
8A
5F

C2

AC

6A

Material A 2,550 kgs @42 per kg

8D

15

CB
01

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47

55

Material B-1,750 kgs @ 59 per kg.

93
A2

20
BD

A4
DE
5F

AC
58
7C

OR
8
1
4C

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01
D0

93
E4

Q4-B Shruti Ltd. has furnished the following information for the month of May,2022. (15)
C5
8A
6A

5F

C2

8
CB

8D

15

3A

Particulars Budget Actual

01

C9
55

47
A2
A4

20
BD

89
DE
5F

Fixed overheads (Rs.) 40000 47300

7C
8
56

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01
4C

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C5

E4

Variable overheads (Rs.) 64000 73100

20
BD

A
6A

5F

8D
3A

7C
8

Hours 8000 8600

01
C

9
55

FC

E4
A2
89

A4

BD
AC

Output (units) 400 425

15

8D
5

98
56

01
C
93

Calculate the following variances:

FC
C5

A2
A4

BD
58

1- Fixed overhead variance

3A

15

98
56
01

4C

FC

2- Fixed overhead volume variance

C5
89
C2

BD
6A
15

3A

15

3- Fixed overhead expenditure variance

47

4C
55
20

D0
89
DE

4- Variable overhead variance

AC

6A
7C

15

CB

5- Variable overhead expenditure variance

55
93
E4

20

A4
AC
58
8D

7C

56
01

93
4
A2

C5
DE

35802 Page 4 of 5
C2

58
98

3A
7
28

01
FC

E4

89
8A

C2
8D

15
C9

7
E4
A2

20

D015FC98A28DE47C2015893AC556A4CB
5F
 FC DE 15 55 BD
98 47 89 6A 01
A2 C2 3A 4C 5F
5F 8D 01 C5 BD C9
C9 E4 58 56 01 8A
8A 7C 93 A4 5F 28
28 20 AC CB C9 DE
DE 15 55 D0 8A 47
4 7C 89
3A
6A 1 5F 28 C2
A2
20 4C DE 01
8D C9 58
Q5-B
C5
Q5-A
15 BD 47

35802
E4 89 56 01 8A C2 93
7 3A A4 5F 28 01
AC
C2
01 C5 C BD C9 DE 58 55
58 56 8 47 93 6A
E4 01 A2 C2 4C
7 93 A4 5F 8D 01
AC
C2
01
AC C BD C9 E4 58 55 BD
01
58 55 8A 7C 93 6A
6A 01 AC 4C 5F
93 4C 5F 28 20 C9 BD
20 AC C9 DE 15 55
8A
15 55 BD
8 47 89 6A 28 01
89 6A 01
A2 C2 3A 4C 5F
5 C DE
a- Limiting factor

3A 4C 8D 01 C 5 BD 9
b- Break even chart

C5
FC
9 E4 58 56 0 8 47
BD 9 1 A2
e- Causes of Variance

56 0 8 A 7C 3 A 4 5 8
C2
A F D 01
d- Zero based budgeting

15 C E
Write short notes (any three)

A4
FC
28
DE
20
15 C 55
CB
98 47 58
CB D0 93
D0 98 47 89
3
6A 1 5
A2
8
C2 AC
15 A2 C2 A 4C FC D 01
58 55
FC 8D 01 C5 BD 9 8
E4
7 9 6A
A 3
c- Disadvantage of standard costing

98 E4 58 56 0 1 C A 4C
A2 7C 93
AC
A4 5 FC
28
DE
20
15 C 55 BD
8D 20 CB
9 8 6 01
15 55 D0 8A 47 93
E4 8 6 C A
A4 5F
OR

Page 5 of 5
7C 93 A4 15 28 20 C CB C9
**************

20 AC CB FC DE 15 55 D0 8A
15 55 D0 98 47 89 6A 1 5 28
89 6A 1 5F
A2 C2 3A 4C F C9 D
3A 4C 8D 01 C5 BD
C5 BD C 98 E4 58 56 01 8A2
5

D015FC98A28DE47C2015893AC556A4CB
56 0 A 7C 93 A4 8D
1- Write advantages and disadvantages of marginal costing.

A4 15 28 20 AC CB FC
CB FC DE 15 55 D0 9 8
E4
7C
98 89 6A 1 A2
2- Distinguish between marginal costing and Absorption costing.

47 3 5 8
D0 A C2 4C
Paper / Subject Code: 85602 / Cost Accounting - IV

15 28 AC FC DE
FC DE 01
58 5 56
BD 9 8A 47
98 47 9 A 01 2 C2
A2 C2 3A 4C 5F 8D 01
8D 01 C5 BD C9 E4 58
E4 58 56 0 8A 7C
7C 93 A4 15 28 20
20 AC CB FC DE 15
15 55 98 47 89
89 6A
D0 A 2 C 3A
15 2
(7)
(8)

3A 8 0 C
(15)

4C FC DE 15
C5 BD 98 47 89
56 01 A2 C2 3A
A4
CB
5F 8 D 015 C5
C9 E4 89 56
D0 8A 7C 3 A
15 28 20 AC
FC DE 15 55
98 4 89 6A