Question Bank
1. “Cost accounting is becoming more and more relevant in the emerging
economic scenario in India.” comment.
2. “Cost accounting system that simply records costs for the purpose of fixing
sale price has accomplished only a small part of its mission”–Explain.
3. “Selling price is always based on total cost”—comment.
4. State the steps involved in the installation of a costing system in a large
manufacturing company.
5. Cost accounting is a system of foresight and not a postmortem examination,
it turns losses into profits, speeds up activities and eliminates wastes.
Comment.
6. Explain the meaning of relevant cost in managerial decisions; Give examples.
7. State in differences between financial accounting and cost accounting.
8. What are the main characteristics of an ideal cost accounting system?
9. Write a note on cost control.
10.What is cost accounting? What are its objectives? In what respects does cost
accounting differ from financial accounting?
11.State the objectives of cost accounting briefly explain the advantages of cost
accounting.
12.“A Good system of costing must place the same emphasize on cost control as
on cost ascertainment”. Comment on this statement.
13.“Cost accounting is better understood as a cost control and cost reduction
exercise and not a more cost ascertainment process”. Discuss.
14. Define and explain the following terms with suitable examples:
a. Cost
b. Costing
c. Cost Accounting
d. Cost Accountancy
e. Cost Centre
f. Cost Unit
15.Explain classification of cost on various basis.
16.Discuss methods and techniques of cost accounting.
17.Distinguish between cost accounting and financial accounting. (Or emphasis
of cost accounting is different from financial accounting.
18.What is cost audit? What are the objectives and advantages of cost audit?
19. Explain the following concept with reference to overheads, with suitable
example:
a. Classification
b. Allocation
c. Apportionment
d. Absorption
e. Under and over absorption
20.Define budgetary control and state its advantages and disadvantages.
21.Define Marginal Cost. Discuss the importance of classifying expenses into
variable and fixed.
22.What do you understand by P/V ratio? Discuss the importance of P/V ratio
and state how P/V ratio can be improved?
23.Explain in brief all functional Budgets? Which functional budgets are most
commonly used by the management?
24.What are the advantages arising out of the budgetary control system? What
do you think are the essentials of an effective budgetary control system?
25. Distinguish between standard costing and budgetary control.
26.Write short notes:
a. Period cost
b. Product cost
c. Process costing
d. Operating costing
e. Break even analysis
f. Make or buy decision
g. Types of costing
h. Job costing
i. Cost audit
j. Profit Volume Ratio
k. Back flush accounting
l. Types of budget
m. Activity based costing
n. Inventory valuation
o. Labour Turnover
p. Zero based budgeting
q. Marginal coting
r. Controllable cost Vs. Uncontrollable cost
s. Types of variances