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Subject: Cost Accounting

Topic: Theory Questions - Set 1 By: Questionscastle Academic Team Document Code: CA/IPCC/CST/0003

Chapters Covered
Material Cost Labour Cost Overheads

Material Cost Q 1. What is purchase requisition? Give a specimen form of purchase requisition. (CA Inter Nov 1998) Q 2. Q 3. Q 4. Q 5. Q 6. Q 7. Q 8. Q 9. Write note on Bill of Material. (CA Inter May 1998, May 1987) Distinguish between Re-order Level and Re-order Quantity. (CA PE II May 2003) What is Economic Order Quantity? (CA Inter May 1994) What is material handling cost? How will you deal it in cost accounts? (CA Inter May 1999) Differentiate between scrap and defectives and how they are treated in cost accounting. (CA PCC Nov 2008) Discuss the treatment of spoilage and defectives. (CA PCC May 2007) How are normal and abnormal losses of material arising during storage treated in cost accounting? (CA Inter May 2001) Explain the difference between the continuous stock taking and perpetual inventory. (CA Inter May 1992)

Labor Cost Q 1. Distinguish between: Direct and Indirect Labor costs. Q 2. Q 3. Q 4. (CA Inter Nov 2001) What do you mean by time and motions study? Why is it so important to management? (CA Inter May 1999) What is idle time? Explain the causes leading to idle time and its treatment in cost accounts. (CA Inter May 1993, May 1994, May 2000) What is overtime premium? Explain the treatment of overtime premium in cost accounting. Suggest steps for controlling overtime. (CA Inter Nov 1995, PE II Nov 2004, CA PCC May 2008) What is impact of Labor Turnover on a manufacturing organizations working? (CA Inter Nov 1998, CA PE II Nov 2003) Discuss the three methods of calculating Labor Turnover. (CA PE II Nov 2004, CA PE II Nov 2007) Discuss the Gantt task and bonus system as system of wage payment and incentives. (CA PE II Nov 2004)

Q 5. Q 6. Q 7.

Overheads Q 1. Distinguish between: Allocation and apportionment of overheads.

Q 2.

Q 3. Q 4. Q 5. Q 6.

Q 7.

Q 8. Q 9.

(CA Inter May 1994, PCC May 2008) Discuss in brief three main methods of allocating support department cost to operating departments. Out of these three which method is conceptually preferable? (CA Inter Nov 1999) What is blanket overhead rate? In which situations, blanket rate is to be used and why? (CA Inter May 1999, PCC Nov 2007) Explain single and multiple overhead rates. (CA Inter Nov 2000) Explain fringe benefits. (CA Inter Nov 1998, Nov 1999) How would you treat the following cost accounts: 1. Employee Welfare cost 2. Depreciation (CA Inter May 1996) What is notional rent of a factory building? Give one reason why it may be included in cost accounts. (CA Inter Nov 1995) Define administration overheads and state briefly the treatment of such overheads in cost accounts. (CA Inter Nov 1996) Define selling and distribution overheads. Discuss the accounting for selling and distribution overheads. (CA Inter Nov 1999, May 2002, PE II May 2006)

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