4

Register Number :

Rs.10 per unit. The budgeted variable cost of

production was Rs.4 per unit and fixed costs
were budgeted at Rs.20,000, planned income
being Rs. 10,000 per month. Because of
shortage of raw materials, the plant could
produce only 4,000 units and the cost of
production was increased by 50 paise per unit.
Consequently the selling price was raised by
Re.1 per unit. To modify production processes
in order to meet material shortage, the
company incurred an expenditure of Rs. 1,000
in Research and Development. Set out a
performance budget and a summary report.

12. From the data given below, calculate the

material price variance, the material usage
variance and material mixture variance.
Consumption per 100 units of product

Material

A
B

Standard

40 units
@Rs. 50 per unit

60 units
@ Rs. 40 per unit

Actual

50 units
@ Rs. 50 per unit.

60 units
@ Rs. 45 per unit.

Name of the Candidate :

4558

M.Com. (ACCOUNTING AND FINANCE

DEGREE EXAMINATION, 2007

( SECOND YEAR )
( PAPER - X )

650. COST CONTROL TECHNIQUES

December ]

[ Time : 3 Hours

Maximum : 100 Marks

SECTION A

(5 8 = 40)

Answer any FIVE questions.

All questions carry equal marks.

1. Enumerate the advantages of value analysis.

2. D e f i n e b u d g e t a r y c o n t r o l a n d s t a t e i t s
objectives.
3. Describe the managerial uses of variance
analysis.

4. What are the limitations of break even

analysis ?

Turn over

5. With the help of following information

calculate :
(a) Labour cost variance.

6. Calculate productivity per machine hour from

the following information.

September

Production
(Units)

Machine Hours.
Used

39,900

4,200

44,100

Direct material cost per unit

20,000

8. Listout the objectives underlying transfer prices.

SECTION B

(3 20 = 60)

Answer any THREE questions.

All questions carry equal marks.

9. Differentiate between cost reduction and cost

control. What are the major areas in which
cost reduction is usually possible ?

3,500
4,900

7. From the following data, calculate the breakeven point.

Selling price per unit.

If sales are 20% above the break-even point,

determine the net profit.

Actual hours : 50 @ Rs. 4 per hour.

August

Fixed overheads (total)

Standard hours : 40 @ Rs. 3 per hour.

35,000

Variable overhead per unit

(c) Labour efficiency variance.

July

Direct labour cost per unit

Direct expansion per unit

(b) Labour rate variance.

Month

Rs.

Rs.

20
8

10. Discuss the major factors that should be

considered in selecting the appropriate method
of valuation of inventories.

11. The following data relate to a company which

had a profit plan approved for selling 5,000
units per month at an average selling price of

Turn over

13. The Containers and cases private limited

producers and markets industrial containers and
packing cases. Due to competion, the company
propose to reduce the selling price. If the
present level of profits is to be maintained,
indicate the number of units to be sold if the
proposed reduction in selling price is

13. The Containers and cases private limited

producers and markets industrial containers and
packing cases. Due to competion, the company
propose to reduce the selling price. If the
present level of profits is to be maintained,
indicate the number of units to be sold if the
proposed reduction in selling price is

(a)

(b)

and (c)

5%

10%

(b)

15%

The following additional information is

available :
Present sales
turnover
(30,000 units)
Variable costs
(30,000 units)
Fixed cost
Net profit

(a)

Rs.

Rs.

3,00,000
1,80,000

70,000

2,50,000

50,000

and (c)

5%

10%
15%

The following additional information is

available :
Present sales
turnover
(30,000 units)
Variable costs
(30,000 units)
Fixed cost
Net profit

Rs.

Rs.

3,00,000
1,80,000

70,000

2,50,000

50,000