UNIT 1 cost accounting Notes pdf PDF

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UNIT -1

Faculty-Junaid Ahmed

SUBJECT- COST A/C

Course-B.com 4th Sem

One liner question and answer Syllabus- Definition, Nature, scope, significance and function of cost accounting, Cost Center ,system and element of cost, Material ,labour and overhead allocation, apportionment and absorption of overheads

1. Costing is a technique of (ascertaining cost) 2. Cost accountancy is the science, art and

if a cost accountant.(practice) (Management.)

3. Cost accounting serves the information needs of 4. Cost accounting provides data for

decision making.(managerial) of financial accounting. (Limitations)

5. Cost accounting has been developed because of

6. The method of costing used in a refinery is (process.) 7. For the goods Transport Company

is the suitable cost unit.(per ton km)

8. The cost which does not change due to change in volume of production is called (fixed cost) 9. An item of cost that is direct for the business may be 10. All costs are

for another business.(indirect)

controllable (not)

11. The aggregate of indirect material indirect labour and indirect expenses together is called (overheads) 12. Chargeable expenses are an example cost.(direct) 13. cost are cost which are ascertained after they have been incurred. (Historical) 14. Cost accounting is a separate of accounting. (branch) 15. costs are partly fixed and partly variable in relation to output.(Semi variable) 16. Fixed cost per unit

with increasing output. (decreases)

17. Differential cost is the change in the cost due to change in----from one level to another.(activity) 18. Management accounting is primarily concerned with(Management). 19. In Cost Accounting stock are valued at

only(cost).

20. Profit is the resultant of two varying factors viz

and

(sales and cost).

21. cost are historical costs which are incurred in the past (Sunk). 22. A responsibility centre in which a manager is responsible for costs only is called (cost center). 23. costs are not considered for decision making because all past costs are not relevant.(Sunk) 24. expenses are not included in the cost sheet.(Notional) 25. Store Ledger is kept and maintained in( Cost Office)

.

26. Goods Received Note is prepared by the (Receiving Department) .

27. Transfer of surplus material from one job or work order is recorded in(Material transfer note . 28. is discount allowed to the bulk purchaser .( Quantity Discount,) 29. is a document which records the return of unused materials(Material return Note). 30. Overheads are an aggregate of(Indirect material Indirect Labour and Indirect Expense 31. Administration overheads are usually absorbed as a percentage of(Works Cost) . 32. The difference between actual and absorbed factory overhead is called (under or over absorbed overheads) . 33. The term used for charging of overheads to cost units is known as (absorptions) . 34. The difference between practical capacity and the capacity based on sales expectancy is known as (idle capacity) . 35. The rate is computed by dividing the overheads by the aggregate of the productive hours of direct workers. (direct labour hour,) 36. Under or over absorption of overheads arises only when overheads are absorbed by (predetermined overheads rates) . 37. Overhead incurred ` 16,000 and overhead absorbed ` 15,300. There is under absorption of 700` . 38. In Absorption Costing cost is added to inventory. (fixed Cost) 39. Re-order level is calculated as:( Maximum consumption x Maximum re-order period) 40. Economic order quantity is that quantity at which cost of holding and carrying inventory is:( Minimum and equal) 41. ABC analysis is an inventory control technique in which:( Inventory is classified into A, B and C Category with A being the lowest quantity, highest value) 42. In case of rising prices (inflation), FIFO method will:( provide highest value of closing stock and profit) 43. In case of rising prices (inflation), LIFO will:( provide lowest value of closing stock and profit) 44. Calculate Re-order level from the following: Consumption per week: 100-200 units Delivery period: 14-28 days(800) 45. Calculate EOQ (approx.) from the following details: Annual Consumption: 24000 units Ordering cost: Rs. 10 per order Purchase price: Rs. 100 per unit, Carrying cost: 5%(310). 46. From the following information, calculate the extra cost of material by following EOQ: Annual consumption: = 45000 units Ordering cost per order:= Rs. 10 Carrying cost per unit per annum: = Rs. 10 Purchase price per unit = Rs. 50 Re-order quantity at present = 45000 units There is discount of 10% per unit in case of purchase of 45000 units in bulk.(2290)...