# Cwa Test Paper

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REVISED SYLLABUS – 2008

REVALIDATION TEST PAPERS
INTERMEDIATE Group II

THE INSTITUTE OF COST ACCOUNTANTS OF INDIA DIRECTORATE OF STUDIES © Copyright Reserved by the Institute of Cost Accountants of India

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Questions to the Revalidation Test Paper — Intermediate-Group-II

PAPER - 8 COST AND MANAGEMNET ACCOUNTING
QUESTIONS TO REVALIDATION TEST PAPER-RV/08/CMA/2010
Time Allowed : 3 Hours Answer Question No. 1 which is compulsory and five from the rest. 1. (a) State whether the following statements are True (T) or False (F)-Give reasons : (i) ABC analysis is made on the basis of unit prices of materials. (ii) Cost of tube used for packing tooth paste is indirect material cost. (iii) Value analysis helps in cost control. (iv) No distinction is made between direct and indirect materials in Process Costing. (v) Cost industry makes use of output costing. (b) Match the following correctly : Merit rating Flexible budget Differential cost analysis Debenture interest Angle of incidence Pure finance not included in cost Profitability rate Evaluation of a job Liquidity Considers costs by behavior Decision taking Budgetary control Basis for remunerating employees (10 marks) Full Marks : 100

(5 marks)

(c) Choose the correct answer from the answers given for each of the following questions. Indicate workings briefly : (i) A worker has a time rate of Rs. 15/hr. He makes 720 units of a component (standard time:5 minutes/unit in a week of 48 hours. His total wages including Rowan bonus for the week is —————. (A) Rs. 792 (B) Rs. 820 (C) Rs. 840 (D) Rs. 864. (ii) A television company manufactures several components in batches. The following data relates to on component : Annual demand : 32,000 units; Set-up cost per batch : Rs. 120. Annual rate of interest : 12%; Cost of production per unit : Rs. 16. The Economic Batch Quantity is ___________ units (A) 2,500 (B) 4,000 (C) 3,000 (D) 2,000 (iii) A company has annual turnover of Rs. 200 lakhs and an average C/S ratio of 40%. It makes 10% profit to sales before charging depreciation and interest which amount to Rs.10 lakhs and Rs. 15 lakhs respectively The annual fi xed cost of the company is ___________. (A) Rs. 85 lakhs (B) Rs. 75 lakhs (C) Rs. 60 lakhs (D) Rs. 55 lakhs. (iv) Sales for two consecutive months of a Company are Rs. 3,80,000 and Rs.4,20,000. The Company’s net profits for these months amounted to Rs. 24,000 and Rs. 40,000 respectively. There is no change in C/S ratio or fixed costs. The C/S ratio of the Company is ___________. (A) 1/3 (B) 2/5 (C) 1/4 (D) None of these.

Questions to the Revalidation Test Paper — Intermediate-Group-II (v) In activity based costing, costs are accumulated by (A) Cost objects (C) Cost Pool (B) Cost benefit analysis (D) None of the above

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(10 marks) (5 marks)

2. (a) What is idle time? Explain the causes for idle time.

(b) A worker takes 6 hours to complete a job under a scheme of payment by results. The standard time allowed for the job is 9 hours. His wage rate is Rs.15 per hour. Material cost of the job is Rs.120 and the overheads are recovered at 15% of the total direct wages. Calculate the factory cost of job under A] Rowan and B] Halsey system of incentive system. (10 marks) 3. (a) Distinguish between ‘allocation and apportionment’ of overheads. (5 marks)

(b) A machine was purchased on 1st January, 2007 for Rs. 5 lakhs. The total cost of all machinery inclusive of the new machine was Rs. 75 lakhs. The following further particulars were available. Expected life of the machine – 10 years Scrap value at the end of the life – Rs. 5,000 Repairs and maintenance for the machine during the year Rs. 2,000 Expected number of working hours of the machine per year 4,000 Insurance premium annually for all machines Rs. 4,500 Power consumption for the machine per hour @ Rs. 5 @ per unit = 25 units Area occupied by the machine – 100 sq feet Area occupied by other machines – 1,500 sq. feet Rent per month of the department Rs....