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Process and Operation Costing Question 1.Explain the “Equivalent Production.” [CA Inter Nov. 2013, 4 Marks]Answer:Equivalent Production:When opening and closing stocks of work-in-process exist, unit costs cannot be computed by simply dividing the total cost by total number of units still in process. We can convert the work-in-process units into finished units called equivalent production units […]
Job and Contract Costing Question 1.What Is meant by Job Costing? Give example of (any four) industries where it is used. [CA Inter May 2001, Nov. 2016, 4 Marks]Answer:Job costing is the category of basic costing methods which is applicable where the work consists of separate contracts, jobs or batches, each of which is authorised […]
Unit and Batch Costing Question 1.Explain ‘Job Costing’ and ‘Batch Costing’. [CA Inter May 2Q01, May 2018, 5 Maris]Answer:Job costing: Job costing is the category’ of basic costing methods which is applicable where the work consists of separate contracts, jobs or batches, each of which is authorised by specific order or contract. According to this […]
Cost Accounting System – CA Inter Costing Study Material Question 1.Explain integrated accounting system and state its advantages. fCA Inter Nov. 2019, May 2019, May 2015, May 2012, May 2010, 5 Marks]Answer:Integrated Accounting System:Integrated Accounting System is a system of accounting, where the cost and financial accounts are kept in the same set of books. […]
Cost Sheet – CA Inter Costing Study Material Question 1.State the names of cost heads in a cost sheet on the basis of functions and define all the cost heads. [ICAI Module]Answer:The costs as classified on the basis of functions are grouped into the following cost heads in a cost sheet:(i) Prime Cost(ii) Cost of […]
Activity Based Costing (ABC) – CA Inter Costing Study Material Question 1.Explain Activity Based Budgeting. [CA Inter Nov. 2018, 5 Marks]Answer: Activity Based Budgeting analyse the resource input or cost for each activity. It provides a framework for estimating the amount of resources required as per the budgeted level of activity. Actual results can be […]
Overheads: Absorption Costing Method – CA Inter Costing Question Bank Question 1.Distinguish between Fixed overheads and Variable overheads. (May 2010, 2 marks)Answer:Fixed Overheads Vs. Variable OverheadsFixed overheads are not affected by any variation in the volume of activity, e.g., managerial remuneration, rent etc. These remain the same from one period to another except when they […]
Employee Cost – CA Inter Costing Study Material Question 1.Distinguish between ‘Direct and Indirect labour costs’. [CA In ter Nov. 2001, 2 MarksjAnswer:Direct Labour Cost is the cost of benefits paid or payable to the employees which can be directly attributed to a cost object in an economically feasible manner. This can be easily identified […]
Material Cost – CA Inter Costing Study Material Inventory Control Levels:Re-order Level (ROL): It is the level at which fresh order needs to beROI. = Max. Consumption × Max. Re-order PeriodOrMin. Stock Level – (Avg. Consumption × Average Re-order period!Safety Stock – Avg. lead time consumptionRe-order period is also known as Lead Time Re-order Quantity/Economic […]
Introduction to Cost and Management Accounting Question 1.What is Cost Accounting? Enumerate its important objectives. [CA Inter May 2016, May 2010, May 2008, Nov. 2002, May 2001, 3 Marks]Answer:Cost Accounting is defined as “the process of accounting for cost which begins with the recording of income and expenditure or the bases on which they are […]