REVISED SYLLABUS 2008
TEST PAPERS
Intermediate
Group II
QUESTION PAPERS FOR POSTAL STUDENTS ONLY
(REVISED/ JULY 2009)
THE INSTITUTE OF COST AND WORKS
ACCOUNTANTS OF INDIA
DIRECTORATE OF STUDIES
Test Papers — Intermediate Group II
PAPER 8
COST AND MANAGEMENT ACCOUNTING
TEST PAPER — II/8/CMA/2008/T-1
Time Allowed : 3 hours Full Marks : 100
1. A. Match A with B for the following :
A B
Differential cost analysis Basis for remunerating employees
Scatter diagram Decision making
Value analysis Inventory management
ABC Analysis Splitting of semi variable cost
Job Evaluation Promotes innovation and creativity
B. State whether the following statements are True [T] or False [F]
i. Unavoidable costs are irrelevant to a decision to accept or reject an order.
ii. A floor cleaner in a factory is an indirect labour
iii. Total variable costs would be lower than the original budget, if the actual output
is lower than the budgeted output.
iv. Absorption costing considers both the variable and fixed costs as part of product
costs
v. A budget in which a responsibility center manager must justify each planned
activity and its estimated total cost is knows as Zero based budget
C. Choose the correct answer for each of the following. Indicate working wherever
required.
1. Insurance Premium is an example of
a. Opportunity Cost
b. Sunk Cost
c. Committed cost
d. Discretionary cost
Test Papers — Intermediate Group II 3
II. The principal disadvantage of using the physical quantity method of allocating
joint costs is that
a. Costs assigned to inventories may have no relationship to their value
b. Physical quantities may be difficult to measure
c. Additional processing costs affect the allocation base
d. Joint cost, by definition, should not be separated on a unit basis
III. A fixed cost that would be considered a direct cost is
a. A Store Manager’s salary when the cost object is a unit of product
b. An Auditor’s Salary when the cost object is the Audit Department
c. The Director’s fees when the cost object is the Production Department
d. A Production supervisor’s Salary when the cost object is the Stores
Department
IV. A Ltd. Sells its products at Rs. 40/unit. In a period if the company manufactures
and sells 12,000 units, it incurs a loss of Rs 2/unit and if the volume increase to
18,000 units, it earns a profit of Rs. 3.50/unit. The break –even point in rupees is
a. Rs. 5,70,000 b. Rs. 1,98,000
c. Rs. 5,46,207 d. Rs. 6,00,000
V. A company has a profit-volume ratio of 30%. To maintain the same contribution,
by what percentage(%) must sales be increased to offset 10% reduction in selling
price ?
a. 10 b. 20
c. 35 d. 50
2. Short Notes : (Any four)
1. Matching Concept
2. Inter-firm Comparison
3. Cost Pools
4. CVP Analysis
5. Integrated Accounting System
3. Narrate the essential factors to be considered while designing and installing a cost
accounting system.
4. What is uniform costing? Explain the advantages of having uniform costing in an
industry also state the major hurdles in introducing a uniform cost system?
5. MSD Ltd. Is experiencing a high labour turnover in recent years and management
would like to know the loss suffered by Company due to such labour turnover.
Following figures are available for your consideration :
Sales Rs. 1200 lakhs
Direct Materials Rs. 300 lakhs
Direct Labour Rs. 96 lakhs on 9,60,000 manhours
Other variable expenses Rs. 120 lakhs
Fixed Overheads Rs. 160 lakhs
The direct manhours include 18,000 manhours spent on trainees and replacements,
only 50 % of which were productive. Further, during the year 24,000 manhours of
potential work could not be availed of because of delayed replacement. The cost
incurred due to separations and replacements amounted to Rs. 2 lakhs.
On the basis of above data, prepare comparative statement showing actual profit
vis-à-vis the profit which would have been realized had there been no labour
turnover.
6. TATA Ltd. Uses a historical cost system and absorb overheads on the basis of
predetermined rate. The following data are available for the year 2008-09.
Manufacturing overheads –
Amount actually spent Rs. 1,27,500
Amount absorbed Rs. 1,12,500
Cost of goods sold Rs. 4,03,000
Work-in-progress Rs. 93,000
Stock of finished goods Rs. 1,24,000
Using two methods of disposal of under absorbed overheads (normal & abnormal
reasons) show the implication on the profit of the company under each method.
7. Birla Construction Ltd. undertook a contract for Rs. 15,00,000 on 1st April 2008.
On 31st March 2009, when the accounts were closed, following details were
available :
Materials purchased 3,00,000
Work certified 6,00,000
Materials on hand on 31st March 2009 75,000
Machinery purchased 1,50,000
Cash received 4,50,000
Wages paid 1,35,000
Work uncertified 45,000
General expenses 30,000
Wages accrued 15,000
Depreciation on machinery is to be charged @ 10% per annum. However, this contract
contains an escalation clause as under :
“In the event of price of materials and rate of wages increase by more than 5%, then the
contract price will be increased accordingly by 30% of the rise in the cost of materials and
wages beyond 5% in each case.”
It is found that after signing the agreement the price of materials and wage rate increased
by 20%. The value of the work certified does not take into account the effect of the
above clause. Prepare the contract account giving the effect of the above escalation.
PAPER 8
COST AND MANAGEMENT ACCOUNTING
TEST PAPER — II/8/CMA/2008/T-2
Time Allowed : 3 hours Full Marks : 100
1. A. Match A with B for the following :
A B
Relevant cost Pure finance not included in cost
Debenture interest Helps in comparing cost
Uniform costing Contract costing
Escalation clause Job evaluation
Point rating Decision making
B. State whether the following statements are True [T] or False [F]
i. Chief accountant’s salary is an administrative overhead cost.
ii. Cost drivers are Accounting techniques used to control costs
ii. An accounting system that collects financial and operating data on the basis of
the underlying nature and extent of the cost drivers is called Target Costing.
iv. Blanket rate is used to carry out adjustment for the difference between overheads
absorbed and overheads incurred.
v. Operation budgets normally cover a period of one year or more.
C. Choose the correct answer for each of the following. Indicate working wherever
required.
I. Which of the following is true with respect to direct cost ?
a. They are incurred for the benefit of cost centers
b. They are incurred as a direct consequence of a decision
c. They can be economically identified with the item being costed
d. They can be controlled immediately when it is incurred.
Test Papers — Intermediate Group II 7
II. In which of the following situations does the break even point (in units) increase ?
a. When unit variable costs increase and sales price remain unchanged
b. When unit variable costs decrease and sales price remain unchanged
c. When unit variable costs remain unchanged and sales price increases
d. When unit variable costs decrease and sales price increases
III. If there is a change in cost due to change in the level of activity or pattern or
method of production, it is known as :
a. Controllable cost
b. Semi-variable cost
c. Discretionary cost
d. Differential cost
IV. MJ Ltd. Has an annual fixed cost of Rs. 1,90,000. IN the year 2008-09 sales
amounted to Rs. 7,50,000 as compared with Rs. 6,00,000 in the year 2007-08
and the profit for the year 2008-09 was more than the profit for 2007-08 by Rs.
52,500.
If there is a reduction of selling price by 10% in the year 2009-10 and the company
desires to earn the same amount of profit as in 2008-09, the required sales volume
would be
a. Rs. 9,45,000
b. Rs. 5,60,000
c. Rs. 6,84,000
d. Rs. 7,55,000
V. AB Ltd. Is planning to produce a new model of calculator. The potential demand
for the next year is estimated to be 1,75,000 units. The company has the capacity
to produce 7,00,000 units and could sell 1,75,000 units at a price of Rs. 625 per
calculator. The demand would double for every decrease of Rs. 75 in the selling
price. The company expects a minimum margin of 20%.
At full capacity level, the target cost per unit will be (2)
a. Rs. 475
b. Rs. 440
c. Rs. 380
d. Rs. 500.
2. Discuss different methods of Transfer Pricing
3. Explain normal wastage, abnormal wastage and abnormal gain and state, how
they should be dealt in process cost accounts.
4. Discuss briefly the principles to be followed while taking credit for profit on
incomplete contract.
5. From the following particulars, find the most profitable product mix and prepare a
statement of profitability of that product mix :
Product A Product B Product C
Data for Standard Cost/unit :
Direct Materials (Rs.) 8.00 24.00 16.00
Variable Overheads (Rs.) 2.40 1.60 4.00
Direct Labour :
Department Rate /hr. (Rs.) Hours Hours Hours
1 0.40 22.40 12.80 24.00
2 0.80 4.00 4.80 8.00
3 0.40 12.80 6.40 24.00
Data from current budget :
Production / year (units in thousands ) 8 4 4.8
Selling price/unit (Rs.) 40 54.40 72
Fixed overhead p.a. Rs. 1,60,000
Possible sales for the year 2009 9.6 5.6 7.2
(units in thousands)
All the three products are produced from the same direct material using the same type
of machine and labour. However, the type of labour required by department 2 is in
short supply and it is not possible to increase the manpower of this department beyond
its present level.
6. A plant is capable of operating 5400 machine hours during a month interchangeable
for nay one or more products Alpha, Beeta or Gama. The following details are
ascertained :
Test Papers — Intermediate Group II 9
Products No. of units per 100 machine hrs. Material cost per unit (RS.)
Alpha 90 1.8
Beeta 45 2.7
Gama 22.5 4.5
Additional information :
a. Labour cost/ mc. Hr Rs. 1.8
b. Variable overhead / mc. Hr. Rs. 2.7
c. The fixed cost of the department p.m. is Rs. 9,000
d. The share capital is Rs. 4,86,000 and the expected ROI is 20% (before taxation)
e. All financial expenses are included in the cost
The following two proposals are to be considered :
i. To fix the selling price by adding 20% on costs.
ii. To use marginal costing technique for price fixation.
Evaluate the aforesaid two proposals and select the best proposal.
7. A company present the following cost estimates for three prospective plants A,B
and C.
Plant A Plant B Plant C
Annual fixed cost (Rs.) 60,000 1,08,000 1,20,000
Variable cost per unit (Rs.) 2.50 2.20 2.10
Annual capacity (Units) 75,000 1,20,000 1,50,000
a. Calculate the range of output over which each of the plants would be economical.
b. If sales are steady at 1,00,000 units p.a. and the unit selling price is Rs. 4/unit,
what will be the profits earned with each of the plants? Assume that Plant A
can be worked double shift with an additional expenses of 10% in fixed costs
and 5% in variable costs of all units.
PAPER 8
COST AND MANAGEMENT ACCOUNTING
TEST PAPER — II/8/CMA/2008/T-3
Time Allowed : 3 hours Full Marks : 100
1. A. Match A with B for the following :
A B
By product cost accounting Activity based costing
Cost objects Cost control
Standard costing Semi-variable cost
Electricity charges Stepped cost
Supervisors’ salary Reverse cost method
B. State whether the following statements are True [T] or False [F]
i. Equivalent units of production is used in Process Costing to provide a means of
apportionment of costs to normal loss units.
ii. Direct labour cost is both product cost and prime cost.
iii. Staples to fix the fabric to the seat of a chair will be treated as an indirect cost.
iv. Opportunity costs are irrelevant to decision making problem.
v. Comparing actual results with a budget based on achieved volume is possible
with the use of a Flexible budget.
C. Choose the correct answer for each of the following. Indicate working wherever
required.
I. Which of the following factors need to be considered in a make or buy decision ?
a. The differential cost of making and buying the item
b. The capability of the company to make the item in terms of capacity
c. The availability of outside suppliers who can deliver the same in terms of
quantity, time and quality
d. All of the above
II. Sagar Ltd. Has budgeted the factory overhead for the year 2008-09 as RS. 8,00,000
for production department – A. The factory o/h incurred during the year was
Rs. 6,84,500. During the year the company has absorbed Rs. 6,84,000 of factory
o/h on a budgeted labour hours of 50,000. The actual labour hour worked for
the year is
a. 45,000 hours
b. 42,781 hours
c. 42, 719 hours
d. 42,750 hours
III. The yield of certain process is 85%, te by-product is 10% and normal loss is 5%
of its main product. 10,000 units of materials are put in the process and its cost
is Rs. 30/unit and other expenses amounted to Rs. 25,400, 30% of which was
accounted for by power cost. It is the practice of the company that the power
cost is chargeable to the main-product and the by-product in the ratio of 5:3.
The cost of the by-product is
a. Rs. 36,309 b. Rs 38,282
c. Rs. 32,636 d. Rs. 36,712
IV. If the sales manager of a company accepts a rush order that will result in higher
than normal manufacturing cost, these additional costs are charged to the sales
manager because the authority to accept or decline the rush order was given to
the sales manager. This type of accounting system is known as
a. Responsibility accounting b. Functional accounting
c. Historical accounting d. Reciprocal allocation
V. Ram Ltd. Is currently operating at 80% capacity level. The production under
normal capacity level is 1,50,000 units. The variable cost /unit is RS. 14 and the
total fixed costs are Rs 8,00,000. If the company wants to earn a profit of RS.
4,00,000, then the price of the product /unit should be
a. Rs. 37.50 b. Rs. 38.25
c. Rs. 24.00 d. Rs. 34.50
2. Difference between :
a) Financial Accounting & Cost Accounting
b) Absorption Costing & Marginal Costing
c) Job Costing & Batch Costing
d) Forecast & Budget
3. There is generally a difference between financial profits and cost profits. Explain
this statement and give reasons for such difference.
4. What is Performance Budget? “The concept of performance budget relates to greater
management efficiency especially in government organizations”. Explain.
5. The following data are available for a manufacturing company for a yearly period :
(Rs. Lakhs)
Fixed expenses :
Wages and salaries 8.55
Rent, rates and taxes 5.94
Depreciation 6.66
Sundry administrative expenses 5.85
Semi variable expenses (at 50% capacity)
Maintenance and repairs 3.15
Indirect labour 7.11
Sales department’s salaries, etc. 3.42
Sundry administrative expenses 2.52
Variable expenses (at 50% capacity)
Materials 19.53
Labour 18.36
Other expenses 7.11
Total cost 88.20
Assume that the fixed expenses remain constant at all levels of production; semi-variable
expenses remain constant between 40% and 60% of capacity, increasing by 10% between
60% and 80% capacity and by 15% between 80% and 100% capacity.
Test Papers — Intermediate Group II 13
Sales at various levels are :
(Rs.lakhs)
50% capacity 90
60% capacity 108
75% capacity 135
90% capacity 162
100% capacity 180
Prepare a flexible budget for the year at 70% and 90% capacities and estimate the
profit at these levels of output.
6. Compute the missing data indicated by the question marks from the following :
Particulars Product X Product Y
Sales quantity:
Budgeted (units) ? 480
Actual (Units) 600 ?
Price / unit
Budgeted (Rs. ) 14.40 18.00
Actual (Rs.) 18.00 24.00
Sales volume variance (Rs.) 1440 F
Sales value variance (Rs.) ?
Sales mix variance for both the product together was Rs. 450 F.
7. Two products M & N are obtained in a crude form and require further processing at
a cost of Rs. 7 for M and Rs. 6 for N/unit before sale. Assuming a net margin of 25% on
cost, their sale prices are fixed at Rs. 20 and Rs. 15/unit respectively. During the period,
the joint cost was Rs. 1,00,000 and the outputs were 12,00 units for M and 9,000 units
for N.
Ascertain the joint cost/unit.
PAPER 8
COST AND MANAGEMENT ACCOUNTING
Time Allowed : 3 hours Full Marks : 100
1. A. Match A with B for the following :
A B
Transfer pricing Control of inventory
Cost of floppy disc Identified with a specific cost unit
JIT system Profit earning capacity
Direct expense Administration overhead
Angle of incidence Measurement of divisional performance
B. State whether the following statements are True [T] or False [F]
i. Management accounting is primarily concerned with the reporting of business
activities for a company as a whole.
ii. Variable costs are only relevant costs.
iii. A company’s approach to a make or buy decision involves an analysis of avoidable
costs.
iv. The system of identification and communication that signals the manager when
his attention is needed is known as Management by Exception.
v. The cash budget includes Operating supplies.
C. Choose the correct answer for each of the following. Indicate working wherever
required.
I. Which of the following is true regarding contract costing ? (4)
a. both work certified and work uncertified are valued at cost price
b. both work certified and work uncertified are valued at market price
c. both work certified and work uncertified are valued at contract price
d. work certified is valued at contract price whereas work uncertified is valued at
cost price
Test Papers — Intermediate Group II 15
II. Company has a profit volume ratio of 25%. To maintain the same contribution, by
what percentage must sales be increased to offset 15% reduction in selling price?
a. 40.00
b. 50.00
c.112.50
d. 75.00
III. B Ltd. Has budgeted the factory overhead for the month of June 2009 as Rs.
16,50,000 for production department – P. the factory overhead incurred during
the month was Rs. 16,20,300. During the month the company has absorbed Rs.
16,07,100 of factory overhead on a budgeted labour hours of 50,000. The actual
labour hour worked for the month is
a. 48,700 hrs. b. 49,100 hrs.
c. 48,500 hrs. d. 49,800 hrs.
IV. The yield of a certain process is 80%, the by-product is 16% and normal loss is
4% of its main product. 5000 units of material are put in process and its cost is
Rs. 24.80/unit and other expenses amounted to Rs. 15,150, 40% of which was
accounted for by power cost. It is the practice of the company that the power
cost is chargeable to the main-product and the by-product in the ratio of 3:2.
The cost of the by-product is
a. Rs. 24,606
b. Rs. 55,660
c. Rs. 26,727
d. Rs. 22,264
V. A Ltd. Manufactures and sells product “C”. the sale price /unit of the product
is Rs. 60. The company will incur a loss of Rs. 6.00/unit if it sells 6,000 units and
if the volume is raised to 10,000 units, the company will make a profit of Rs.
4.00/unit. The break-even point in units is
a. 7,000
b. 7,895
c. 7,985
d. 8,975
2. Short Notes : (any four)
1. Escalation Clause
2. Bill of Materials
3. Equivalent Production
4. Reverse Cost Method
5. Principal Budget Factor
3. How would you treat the following in costing (a) Bad debt, (b) Material handling
expenses, (c) After sales service cost, (d) major repairs to equipment to prolong its
useful life, (e) transport cost.
4. What do you understand by Equivalent Production? Discuss different methods of
pricing for valuing the equivalent units.
5. Asha Ltd., a manufacturer, follows the policy of EOQ for one of its components.
The component’s details are as follows:
Purchase price per component Rs. 100
Cost of an order Rs. 50
Annual cost of carrying one unit in inventory Rs. 10 % of Purchase price
Total cost of carrying of inventory and ordering cost
Per annum Rs. 1000
The company has been offered a discount of 1% on the price of the component
provided the lot size is 500 components at a time.
a. Calculate the EOQ
b. Advise whether 2% quantity discount offer can be accepted.
Would your advise differ if the company is offered 5% discount on a single order?
6. The finished product of a manufacturing company passes through three processes,
viz. I, II and III. The normal wastage in each process is 5%, 7% and 10% for the
processes I,II and III respectively. The scrap generated out of wastage has a sale
value of 70 paise/unit, 80 paise/unit and Re. 1/unit in the processes I,II, and III
respectively. The output of each process is transferred to the next process and the
finished output emerges from the process III are transferred to stock. There was no
stock of W-I-P in any process in a particular month. The details of cost data for the
month are given below :
I II III
Materials used (Rs.) 1,20,000 40,000 40,000
Direct labour cost (Rs.) 80,000 60,000 60,000
Production expenses (Rs.) 40,000 40,000 28,000
Output in units (actual) 38,000 34,600 32,000
40,000 units of Raw material was introduced at process I at cost of Rs. 3,20,000.
Prepare the process accounts.
7. A manufacturer presents the following information for the year ended 31st
March 2009 :
Material cost Rs. 43,200
Labour cost Rs. 86,400
Fixed overhead Rs. 43,200
Variable overheads Rs. 21,600
Units produced 7,200 units
Selling price /unit Rs. 30
The available capacity is 12,000 units per year. The firm has an offer for the additional
production of 3,000 units which can be sold at Rs. 24/unit. It is expected that by
accepting this offer there will be a saving of Re. 0.6/unit in material cost on all units
manufactured, the fixed overhead will increase by Rs. 12,000 and the overall efficiency
will drop by 2% on all production.
Advise whether the offer is acceptable or not.
PAPER 9
OPERATION MANAGEMENT AND INFORMATION SYSTEM
TEST PAPER — II/9/OMIS/2008/T-1
PART - A
(Operation Management)
Time Allowed : 3 hours Full Marks : 100
Answer Q1 and any two of the remaining :
1. (a) Indicate whether the following statements are True/False
i) Breakdown maintenance is a part of planned maintenance.
ii) Work Study is a generic term for those techniques , particularly Method study
Work measurement.
iii) Human Resource Planning is balancing human resources acquired required
in an organization.
iv) Factor Comparison is a method of Value Analysis
v) Conveyors create a relatively fixed route
vi) A.B.C classification method is a method of inventory control
vii) Linear Programming can solve problems involving variables not capable of
being expressed in quantitative terms.
viii) Forging is the process of pouring molten metal into prepared Cavity.
ix) Industrial Engineering is a line function.
x) Modem converts the digital signal to analog signal.
(b) Fill in the blanks with the more suitable word from the pair give below :
i) AFTWAYS is a system of (Value Analysis/Job Analysis)
ii) Plant layout is a affair. (dynamic/static)
iii) are used to pick up and move materials in different routes.
(Conveyors/Industrial trucks)
Test Papers — Intermediate Group II 19
iv) Optimum Capacity is rate of output at which there is to change the
size of the plant.(incentive/ no incentive)
v) Value Analysis is a method of . (Cost control/cost reduction)
vi) SQC is a method of control.(quantity/quality)
vii) Acceptance number is the maximum number of items in a
sample.(good/defective)
viii) CPM is used in jobs.(repetitive/non repetitive)
ix) Under input-output analysis only input is treated as scarce.
(labour/capital)
x) Labour Rate Variance is Actual Rate minus Standard Rate multiplied
by hours. (Actual/Standard)
2. Write short notes on the following :
a) Zero Base Budgeting.
b) JIT
c) Economics of Quality
d) Work Simplification
e) Lead time
3. (a) Define obsolescence. State the factors that determine obsolescence. (2+5)
(b) What is maintenance? What types of losses may arise due to poor maintenance?
(8)
4. (a) Define work sampling. Write down the formula indicating terms used for
determining the sample size.
(b) In a sampling study , a machine is found to be idle 20% of the total time available
for operation. Find out how many observations are required to arrive at a more
accurate estimate with a confidence level of 95% and +/- 5 % error limit.
(c) State the limitations of Work Sampling. (5+5+5)
5. Machine A and B are both capable of manufacturing a particular product, compare
as follows :
Machine 1 Machine 2
Investment Rs 100,000 Rs150,000
Int. on borrowed Cap. 9% 9%
Operating Cost per hr. Rs.12 Rs.10
Production per hr. 5 pieces 9 pieces
Hrs. worked 4000 per year 4000 per year
a. Which machine is suited for regular production?
b. If only 5000 pieces are produced in a year, which machine would give lower
cost of production?
c. For how many pieces of production per year would the cost of machine be same?
(5+5+5)
6. (a) Write full description of the following :
i. NITIE
ii. ISO
iii. BPE
iv. BEP
v. SD
b. Name five general purpose machines.
c. Name five computerized techniques for Plant Layout.
PART - B
(Information Systems)
Time Allowed : 3 hours Full Marks : 100
Answer Q No. 1 and any two of the remaining :
1. Write short notes on:
a. Debugging
b. Protocol
Test Papers — Intermediate Group II 21
c. Artificial Intelligence
d. Outsourcing
e. ALU (5×4)
2. (a) What is a Decision Support System? Illustrate with diagram.
(b) Mention the main components of DSS. (10+5)
3. Define communication. What are the different modes of communication? (3+12)
4. (a) What is Information? How does it differ from Information System.
(b) Describe the characteristics of an Information System. (3+5+7)
PAPER 9
OPERATION MANAGEMENT AND INFORMATION SYSTEM
TEST PAPER — II/9/OMIS/2008/T-2
PART - A
(Operation Management)
Time Allowed : 3 hours Full Marks : 100
Answer Q No. 1 and any two of the remaining :
1. (a) What is the differecne between :
i) Job Analysis and Job Evaluation
ii) Cost control and cost reduction.
iii) Casting and forging
iv) Sales turnover and labour turnover
v) EOQ and BEP (4× 5)
2. (a) Tick the most suitable alternative:
i) Time Study aims
A) to check what the worker is doing during the work
B) to find the time taken by a worker to do the job
C) to find out the time required to do a job
D) to determine how to do a job
ii) Work Study aims at
A) increasing work load
B) equitable distribution of work
C) reducing production cost
D) determine right man for right job
iii) Normal time means
A) time required by a qualified worker to do a job under normal circumstances
B) how much time should be taken to get incentive
Test Papers — Intermediate Group II 23
C) time to do a job
D) time required by any person to do a job
iv) Job evaluation determines
A) relative worth of job holders
B) relative worth of various jobs
C) time taken for a job
D) bonus
v) Factor comparison Method is used in
A) Time Study
B) Method Study
C) Value Analysis
D) Job Evaluation
2. Define incentive. What are the characteristics of a sound incentive plan? (10)
3. (a) Write full description of the following:
i) SQC
ii) MBO
iii) IE
iv) MH
v) AFTWAYS
(b) i) What is plant layout? What are its objectives?
ii) While designing Layout what factors should be kept in mind? (10)
4 (a) Distinguish between Quality of Design and Quality of Conformance
(b) Discuss the benefits of an effective Quality Control Programme
(c) What causes variations in Quality? (15)
5. (a) A factory has capacity to provide 3999 hours per week. The plant can produce
Product A and Product B. Annual costs are Rs 15000. Maximum possible sales
were estimated to be 5000 units for Product A and 4000 units of Product B.
Other information available are as follows:
Product A Product B
Variable Cost per unit 9 12
Selling Price per unit 15 18
Hours required per unit 5 6
Find out product mix that will maximize profit.
(b) Discuss the managerial uses of Break-even Analysis. (8+7)
6. (a) A workshop has 25 identical machines. The failure pattern of the machines are
as follows :
Elapsed time after maintenance Probability of failure
attention(in month)
1 .20
2 .16
3 .16
4 .15
5 .15
6 .20
It costs Rs. 1600 to attend a failed machine and rectify the same. Compute the yearly
cost of servicing the broken down machine.
(b) Differentiate between preventive and breakdown maintenance. (8+7)
PART - B
(Information Systems)
Time Allowed : 3 hours Full Marks : 100
Answer Q1 and any two of the remaining :
1. Write short notes on:
i. Virtual Memory
Test Papers — Intermediate Group II 25
ii. Expert System
iii. Fascimile(fax)
iv. Data
v. Outsourcing (5×4 )
2. (a) How do you define MIS. Discuss some applications of MIS.
(b) What should be the characteristics of a good Management Information Systems.
3. (a) How has Information System evolved over years?
(b) Discuss the factors that led to growth of Business Development System. (8+7)
4. (a) Define Operating System. State the functions of a Operating System.
(b) How a Operating System may be classified?
(c) What is bootstrapping? (5+7+3)
PAPER 9
OPERATION MANAGEMENT AND INFORMATION SYSTEM
TEST PAPER — II/9/OMIS/2008/T-3
PART - A
(Operation Management)
Time Allowed : 3 hours Full Marks : 100
Answer Q No. 1 and any two of the remaining :
1. (a) Match the terms shown in (A), with their relevant terms of (B)
A B
1) ZBB a) Moves materials of different size and
weight within a fixed area.
2) Lathe b) Japanese technology
3) MRP c) Cost Reduction
4) Steel Rolling d) General purpose machine
5) Heating and cooling operations e) Its essence lies in two questions-Why
and What if cutting across all functions
6) Crane f) Demand for a product or service has to
be justified each time budget is
prepared.
7) Activity sampling g) nnealing
8) BPR h) Fabrication
9) Value Analysis i) Bill of Materials
10) JIT j) Work measurement technique
(b) Indicate whether the following statements are True/False :
i. BMT is a work measurement technique. (T)
ii. Process Layout is useful when standardized products are manufactured.(F)
iii. Gantt’s Plan does not consider the element of security for workers.(F)
Test Papers — Intermediate Group II 27
iv. X-R chart is a Quality Control tool. (T)
v. Scheduling involves close co-ordination with Sales Department. (T)
(c) What do following abbreviations stand for?
i. ROR
ii. EBQ
iii. CORELAP
iv. BIS
v. CPM
2. (a) Point out the basic objectives of scheduling.
(b) Five jobs are required to be processed through two machines 1and 2 sequentially.
The table below gives the processing times in hours:
Job A B C D E
Machine 1 2 7 5 6 5
Machine 2 4 8 8 7 3
What is the minimum total time for completion of all jobs?
For what period, if any, Machine 2 remains idle?
When does Job B gets completed? (5+10)
3. (a) What are the factors that influence a business forecast?
(b) Estimate the number of scooters to be sold in a town with population of 12 lacs
with help of following data.
Population(in lacs) (X) 4 6 7 10 13
No. of scooters (Y) 5500 6600 5700 9000 10500
4. (a) PMT Ltd requires 6000 pieces of components to be purchased in a year. Purchase
price is Rs.6 per piece and ordering cost has been estimated to be Rs. 120. Carrying
cost was estimated at 0.25% of the value of inventory held.
Calculate the optimum size of each order.
Based on above calculation, how many orders are required to be placed in a
year? (6+2)
(b) Two alternative methods A and B using different machine set ups may be
employed to manufacture a product using a particular machine tool .Operating
cost is Rs. 200 (including wages) per hour. Which method is more suitable for
regular production based on following information :
Method A Method Y
Product 6000 pieces 7500 pieces
Cost of machining 350 1500
Production rate 15 per hour 18 per hour
Would your answer be same if only 1500 pieces are to be manufactured?
5. (a) Define Motion Study. Explain the steps involved in carrying out Motion Study.
(2+7)
(b) Describe Ergonomics (6)
6. (a) Describe the salient features of 100% Inspection vis-à-vis Sampling Inspection
(b) What are the causes of variation in quality.
(c) What does a Control Chart consists of? Show with a diagram. (6+5+4)
PART - B
(Information Systems)
Time Allowed : 3 hours Full Marks : 100
Answer Q1 and any two of the remaining :
1. Match Column 1 with most suitable terms in column 2.
Column 1 Column 2
a) Scanner i) Programming Language
b) Magnetic Tape ii) Provides information about location of
a document.
c) C++ iii) Batch Control
d) Microsoft Excel iv) Input Device
e) URL v) Spreadsheet package
f) BUS vi) Control Total
g) Input Control vii) Stores incoming message
h) Processing Control viii) Sends mail to address of the receiver
i) Mail Box ix) Output Device
j) Mail Server x) Common communication channel
(b) tate whether the following statements are TRUE/FALSE :
i. PASCAL is a 4th Generation Language (T)
ii. OCR is a Output device. (F)
iii. HLL converts source program into Machine Language Program. (F)
iv. BASIC is suitable for both scientific and commercial applications. (T)
v. Testing is done before debugging. (F)
(c) State the full form of :
i) EFT
ii) SET
iii)DHTML
iv)BIT
v) AI
2. (a) Write short note on RDBMS. Illustrate with a diagram.
(b) State the advantages of DBMS. (8+7)
3. (a) What criteria should be considered while selecting a ERP Package?
(b) Explain the stages involved in ERP implementation. (5+10)
4. (a) What is an e-mail?
(b) What is the function of a modem?
(c) What is use of Fibre-optics technology?
(d) What are the functions of ALU?
(e) Outline the activities of an Information System.
PAPER 9
OPERATION MANAGEMENT AND INFORMATION SYSTEM
TEST PAPER — II/9/OMIS/2008/T-4
PART - A
(Operation Management)
Time Allowed : 3 hours Full Marks : 100
1. (a) State the uses of the following devices :
i. Industrial trucks
ii. Jib crane
iii. Belt conveyors
iv. Lathe
v. Honing machine
(b) Fill in the blanks with more suitable words from the alternatives given in
brackets :
i) Yield variance is difference between Actual loss and Standard loss
multiplied by average input price (actual / standard).
ii) budget provide a basis for determining costs anticipated at
different levels of activity. (fixed / flexible).
iii) Material handling is an integral part of process.(manufacturing
/ sales) process.
iv) The effective capacity is influenced by forecasts of . (demand
/ supply)
v) PERT is designed for projects.(repetitive / non-repetitive) projects.
vi) Process layout is suitable in case of processes. (repetitive / nonrepetitive)
processes.
vii) The optimum lot size of production is known as (EOQ/EBQ)
viii) Productivity can be measured by dividing Profit /Capital
employed. (Gross /Net)
ix) Inspection is an important tool of (quality control / work
measurement)
x) Slack variable represents capacity.(used /unused)
(c) State whether the following statements are True / False.
i) Synthetics is a work measurement technique. T
ii) The Scanlon plan is a wage incentive scheme. T
iii) PFD allowance is expressed as a percentage of normal time. F
iv) Labour card is prepared by dispatching department to book the labour
involved in each operation. F
v) Z Chart is used in Quality Control. F
2. (a) Distinguish between a job shop and a flow shop.
(b) A machining centre in a job shop of a local fabrication company has five
unprocessed jobs remaining at a particular point in time. The jobs are labeled
1,2,3,4 and 5 in the order they enter the shop. The respective processing time
and due dates are given in the time table below :
Job number Processing time (days) Due date
1 11 61
2 29 45
3 31 31
4 1 33
5 2 32
The production manager and the marketing manager of the job shop have different
opinion on customer service . The production manager feels that for certain jobs
delays are inevitable in the basic structure of the job shop working the loss as Rs . 50
per day of delay with respect to delivery date.
The marketing manager feels delay would cost the organization Rs 1000 per day of
delay.
Examine the three commonest sequencing rules and state sequencing rule that
would satisfy the organization requirement best. (5+10)
3. Write short notes on:
(a) FMS
(b) Difference in Pert and CPM
(c) Production and productivity.
4. (a) Product A has a Mean Time Between Failures(MTBF) of 40 Hrs. and Mean Time
To Repairs(MTTR) of 5 Hrs. Product B has an MTBF of 50 hrs. and has an MTTR
of 2 hrs.
i) Which product has higher reliability?
ii) Which product has higher maintainability?
iii) Which product has greater availability? (3+3+4)
(b) Discuss the points to be considered while designing a Maintenance programme
for an organization?
5. (a) What is Human Resource Planning? Explain the steps involved in HRP.
(b) State the importance of HRP to an organization. (3+3+9)
6. (a) How do you classify Waste? Discuss the features of an effective Waste Disposal
System. (3+6)
(b) How can an organization control pollution? (6)
PART - B
(Information Systems)
Time Allowed : 3 hours Full Marks : 100
Answer Q No. 1 and any two of the remaining :
1. (a) Fill in the blanks :
i) is the contraction of the term Binary Digit
ii) An extra bit in a byte that enables the computer to check for internal errors is
called bit.
iii) rate is the number of signal transitions per period of time.
iv) Laser printer is a printer.
v) The range of frequencies available for data transmission is called .
(b) State the full form of—
i) EDI
ii) SDLC
iii)MODEM
iv)HLL
v) ROM
(c) State whether the following statements are True /False:
i) Power Point is not a spread sheet software. (T)
ii) Analytical model representing Information differs from actual system. (T)
iii) Only executable files can be infected by virus. (F)
iv) Real Time Processing do not have fixed time constraints. (F)
v) Cryptography maintains confidentiality in the information between sender
and receiver. (T)
(d) Match Table A with most suitable alternative in table B.
Table A Table B
a) DBA i) facilities communication between
networks.
b) Router ii) introduced into a computer system as a
foreign body
c) Ring iii) is a logical error that creeps into a program
inadvertently.
d) irus iv) is a computer network in which all stations
are equal.
e) Bug v) is responsible for defining , organizing,
and use of database in a company.
2. (a) What factors affect security of a computer system in an organization?
(b) How would you minimize the risks associated with computer security?
3 (a) What do you mean by a feasibility study in relation to development of an
information system?
(b) Explain why information system die. (9+6)
4. Write short notes on :
i) Dot matrix printer
ii) Synchronous communication
iii) BIOS
iv) Audit Charter
v) EIS (5×3)
PAPER 10
APPLIED INDIRECT TAXATION
TEST PAPER — II/10/AIT/2008/T-1
Time Allowed : 3 hours Full Marks : 100
Answer any five questions
1. (a) Briefly explain any two of the following with reference to the Central Excise
Rules, 2002 :
(i) Assessee
(ii) Daily stock account
(iii) Large tax payer (2×2 = 4)
(b) What are the basic conditions for levy of duty under section 3 of the Central
Excise Act, 1944? (3)
(c) Explain whether assembling amounts to manufacture. (3)
(d) Write a short note on ad-valorem rate. (3)
(e) Discuss briefly the validity of the following statements with reference to the
CENVAT Credit Rules, 2004 :
(i) Basic excise duty credit can be utilized for payment of basic excise duty and
education cess and secondary and higher education cess.
(ii) CENVAT credit on inputs lying in stock or in process or contained in the
final product shall be reversed when the final product is subsequently
exempted unconditionally in terms of an exemption notification issued under
section 5A of the Central Excise Act, 1944. (3×2 = 6)
(f) State briefly whether the following circumstances would constitute
“manufacture” for purposes of section 2(f) of the Central Excise Act, 1944 :
(i) Both inputs and the final product fall under the same tariff heading under
the first schedule to the Central Excise Tariff Act, 1985 (Tariff Act.)
(ii) Inputs and final product fall under different tariff headings of the Tariff Act.
(2×2 = 4)
2. (a) XYZ Corporation is engaged in the process of mixing alumunium paste,metal
lacquer and thinner resulting in the production of alumunium paint having a
shelf life of 8-10 hours. Discuss briefly with reference to the provisions of the
Central Excise Act,1944 whether it amounts to manufacture. (4)
(b) How are the goods manufactured in the Free Trade zone but sold in Domestic
Tariff Area is subjected to levy of excise duty? (3)
(c) State the difference between “Exempted Goods” and “Nil rate” goods. (4)
(d) Define the Classification Code used for the purpose of Exciseable Goods as per
the Central Excise Act, 1944. (2)
(e) Define “Normal Transaction Value” as per the Central Excise Valuation
(Determination of Price of Excisable Goods) Rules,2000. (2)
(f) State the difference between CENVAT Credit on Capital Goods and CENVAT
Credit on Input. (5)
3. (a) ABC Ltd. Transfers 200 kgs of Product Z to its depot on 1.5.2008. On that dte,
there has been no sale from the depot. However, Product Z has been sold from
the depot at the nearest point of time i.e., 25.4.08. The sales details on that date
were as follows :
(i) 800 kgs @ Rs.25 per kg.
(ii) 80 kgs @ Rs.32 per kg
(iii) 100 kgs @ Rs.27 per kg
(iv) 700 kgs @ Rs.32 per kg
Determine the Transaction value. (4)
(b) Determine the cost of production on manufacture of the undermentioned product
for the purpose of captive consumption in terms of Rule 8 of the Central Excise
Valuation Rules,2000 :
Direct Materials Rs.11,600; Direct Wages and Salaries Rs.8,400; Works overheads
Rs.6,200; Quality Control Costs Rs.3,200; Research and Development Cost
Rs.2,400; Administrative overheads Rs.4,100; Selling and Distribution Costs
Rs.1,600; Realizable value of scrap Rs.1,200.
Administrative overheads are in relation to production activities. Material cost
includes excise duty Rs.1,600. (10)
(c) Define “Time of Removal” and “Transaction Value” as per the Central Excise
Valuation ( Determination of Price of Excisable Goods) Rules, 2000. (6)
4. (a) Explain briefly with reference to the provisions of the Customs Act, 1962 the
following :
(i) Appointment of officers of customs
(ii) Tariff value
(iii) India
(iv) Foreign Going Vessel or aircraft
(v) Person-in-Charge (5×2 = 10)
(b) Write a note on “Project Imports” and “Eligible Projects” under the Customs
Tariff Act, 1975 enumerating the eligible projects and the minimum investment
criteria, if any. (6)
(c) State the difference between Transit and Transhipment of Goods. (4)
5. (a) XYZ Industries Ltd., has imported certain equipment from Japan at an FOB cost
of 2,00,000 Yen (Japanese). The other expenses incurred by M/s. XYZ Industries
in this connection are as follows :
(i) Freight from Japan to India Port 20,000 Yen
(ii) Insurance paid to Insurer in India Rs.10,000
(iii) Designing charges paid to Consultancy firm in Japan 30,000 Yen
(iv) M/s. XYZ Industries had expended Rs.1,00,000 in India for certain
development activities with respect to the imported equipment
(v) XYZ Industries had incurred road transport cost from Mumbai port to their
factory in Karnataka Rs. 30,000
(vi) The Central Board of Excise and Customs had notified for purpose of section
14(3)* of the Customs Act, 1962 exchange rate of 1 Yen = Rs.0.3948. The
inter bank rate was 1 Yen = Rs.0.40
(viii) M/s XYZ Industries had effected payment to the Bank based on exchange
rate 1 Yen = Rs. 0.4150
(viii) The commission payable to the agent in India was 5% of FOB cost of the
equipment in Indian Rupees
Arrive at the assessable value for purposes of customs duty under the Customs
Act, 1962 providing brief notes wherever required with appropriate assumptions.
(12)
(b) Write short notes on (i) All Industry Rates (ii) Brand Rates (iii) Special Brand
Rates (6)
(c) What is “Expor” for the purpose of Duty Drawback under the Customs Act,1962.
(2)
6. (a) Mr. B, an Indian Resident, aged 60 years, returned to India after visiting Germany
on 15/8/08. He had been to Germany on 5/8/08. On his way back to India he
brought the following goods with him :
i) His personal effects like clothes, etc. valued at Rs. 60,000
ii) 1 litre of wine worth Rs. 2,000
iii) A video cassette recorder worth Rs. 11,000
iv) A microwave oven worth Rs. 22,000
If the basic customs duty is 30%, what is the duty payable? (8)
(b) Is there any difference between “Baggage” and “Bona fide Baggage”? (4)
(c) Write a short note on “Warehousing period” under Section 61 of the Customs
Act,1962. (4)
(d) Write short note on Special Economic Zone (4)
7. (a) State briefly whether the following services under the Finance Act, 1994, relating
to service tax, are taxable services.
(i) Services provided in the State of Rajasthan by a person having a place of business
in the State of Jammu and Kashmir.
(ii) Services provided from India for use outside India.
(iii) Service provided from outside India and received in India by an individual,
otherwise than from purpose of use in business or commerce.
(iv) Service provided to an Export oriented unit. (2×4 = 8)
(b) An automobile authorized service station provides free service to our customers
for which we get reimbursement from the manufacturers. Are they liable to pay
service tax? (4)
(c) A cable operator charges Rs.10,000 for his services, which includes entertainment
tax of Rs.2,000 paid on behalf of his client. Compute the value of taxable service
and service tax liability. (4)
(d) A beauty parlour charges Rs.1,00,000 from a client for providing beauty treatment
service, the breakup of the bill is as follows :
i) Labour and facility charges Rs.60,000
ii) Value of cosmetics and toilet preparations consumed in providing the service
Rs.30,000
iii) Value of cosmetics and toilet preparations sold to the client Rs.10,000
Compute the amount of service tax to be charged to the client. (4)
8. (a) Define ‘Appropriate State’ (3)
(b) ‘Central Government can become a dealer, but the state government cannot-is
the statement correct? Give reasons. (3)
(c) Arun sells his land along with the standing crops and trees for Rs.20 lakhs. Sales
tax officer wants to assess for sales tax the value of standing crops and trees.
Comment. (4)
(d) Is transfer of property in goods without consideration chargeable to CST? (2)
(e) Define “Goods of Special Importance” as per the CST Act. (3)
(f) Sales tax payable on product ‘A’ if sold within State of Punjab is 2%. If the
product is sold in Inter-State sale, what will be the Central Sales Tax payable if :
i) Buyer furnishes C form
ii) Buyer does not furnish any form
iii) Buyer furnishes H form
iv) Buyer furnishes D form?
9. (a) Discuss the liability to pay VAT for (i) an existing dealer (ii) a new dealer
(b) Treatment of Export sales and sales to units located in Special Economic Zones.
(c) What is works contract?
(d) State the distinction between ‘Zero rated sale’ and ‘exempt sale’.
(e) What are the records and accounts to be maintained under VAT? (5×4 = 20)
PAPER 10
APPLIED INDIRECT TAXATION
TEST PAPER — II/10/AIT/2008/T-2
Time Allowed : 3 hours Full Marks : 100
Answer any five questions
1. (a) Comment whether the following process amounts to manufacture or not, with
reasons :
i) Recording of audiocassettes on duplication music system.
ii) Crushing of betel nuts into smaller pieces and sweetening the same with
essential/non-essential oils, menthol, sweetening agents, etc. (2×2 = 4)
(b) State who will be considered as the manufacturer as per Sec.2(f)of the Central
Excise Act,1944 :
i) A person supplying raw material for getting the goods manufactured on
independent job-work basis.
ii) A customer gets the goods manufactured according to his designs and
specifications or with his name or trade name. (2×2 = 4)
(c) Define “Factory” as per the Central Excise Act,1944. (2)
(d) Discuss whether the cost of containers, supplied by the buyer, form the part of
the transaction value of the article? (3)
(e) Determine the value on which excise duty is payable in the following instances :
i) A Ltd. Sold goods to B Ltd. at a value of Rs.100 per unit. In turn B Ltd. sold
the same to C Ltld. at a value of Rs.110 per unit. A Ltd. and B Ltd. are
related, whereas B Ltd. and C Ltd. are unrelated.
ii) A Ltd. sells motor spirit to B Ltd. at a value of Rs.31 per litre. But motor spirit
has administered price of Rs.30 per litre, fixed by the Central Government.
2. (a) The cum-duty price of the product is Rs.6,50,696. It includes sales tax @ 4% and
excise duty @ 16%(plus 2% Education Cess and 1% SHEC). Find out the assessable
value and excise duty and sales tax. (6)
(b) Mr.Z is providing taxable as well as exempted services. The value of taxable
services is Rs.10 lakhs while that of exempted services is Rs.20 lakhs. All the
inputs/input services used by him are commonly used in providing taxable as
well as exempted services. The total input credit is Rs.2 lakhs. Find the amount
payable by Mr.Z. (6)
(c) What are the documents on the basis of which CENVAT credit can be availed?
(8)
3. (a) Explain the difference between Special Audit u/s 14A and u/s 14AA of the
Central Excise Act,1944. (10)
(b) Briefly state the provisions relating to exemptions available for small scale units
under the Central Excise Act,1944. (10)
4. (a) Define “Identical Goods” and “ Similar Goods” (3)
(b) Write short note on “Declaration to be furnished by the Importer under Rule
11” of the Customs Rules. (3)
(c) Write a short note on distinction between Clearance for Goods for home
consumption and clearance of goods for warehousing. (6)
(d) State the difference between the provisions of Sec.74 and Sec.75 of the Customs
Act,1962, relating to duty drawback. (8)
5. (a) What is the General Free Allowance to an Indian resident or a foreigner residing
in India returning from countries other than Nepal, Bhutan, Myanmar or China?
(8)
(b) An Indian resident, aged 18 years, having gone to China on tour on 15.04.2008
purchased refrigerator of Rs.20,000 and a vaccum cleaner of Rs.5,000 and brings
the same to India. What is the duty payable if :
i) He returns to India on 17/04/2008
ii) He returns to India on 20/04/2008 (8)
iii) What do you understand by temporary detention of baggage? (4)
6. (a) Write short notes on :
i) Free allowance to professionals in respect of their professional equipment
ii) Free allowance to tourists. (3×2 = 6)
Test Papers — Intermediate Group II 43
(b) Write a short note on Import and Export through courier. (4)
(c) What is the relevant date for determination of rate of duty for Export goods?
(2)
(d) Expand the acronyms: (i) BIN (ii) DGFT (iii) DEPB (3)
(e) Define Re-import of Goods under the Customs Act,1962 (5)
7. (a) Briefly state the provisions under the Service Tax Rules, 1994 relating to filing of
returns and also state any late fee payable for delay in filing of returns. (4)
(b) Answer the following with reference to the Finance Act, 1994 as amended relating
to applicability of service tax :
(i) Sale of lottery tickets.
(ii) Depository services and Electronic Access to Securities Information Services
(EASI) provided by the Central Depository Services India Ltd.
(iii) Services provided by educational institutions like IIMs by charging a fee from
prospective employers like corporate houses regarding recruiting candidates
through campus interviews. (2×3 = 6)
(c) Answer the following with reference to the Finance Act,1994 and the Rules
made thereunder relating to Service Tax : (2 ½×4 =10)
i) Intimation regarding charge in details furnished by an Assessee in
Form ST-I
ii) Cancellation of Registration Certificate
iii) Adjustment of excess amount paid towards service tax liability for the
subsequent period
iv) Clearing and Forwarding Agents Services.
8. (a) Define “ Sale Pr.ice” as per the Central Sales Tax Act,1956 (5)
(b) Define “ Sale or Purchase in the course of Inter-state trade” as per the Central
Sales Tax Act,1956 (5)
(c) Determine the central sales tax liability from the following data when a sale is
effected from Faridabad to Lucknow: (a) Invoice no.: 00708374 (b) Basic price:
Rs.3,00,000 (c) Excise duty: 16% ad valorem (d) CST: as applicable under’c’forms
(e) Trade discount: 8% (f) Cash discount: 2% (g) Quantity supplied: 10,000 kgs
(h) Quantity rejected by buyer within 3 days of delivery: 1000 kgs (i) Quantity
returned by buyer after 6 months of despatch: 1000 kgs. (10)
9. (a) “VAT avoids cascading effect of tax” – Justify. (5)
(b) A dealer purchased 11,000 kgs of inputs on which VAT paid @ 3% was Rs.3,000.
He manufactured 10,000 kgs of finished products from the inputs. 1,000 kgs.was
the process loss. The final product was sold at uniform price of Rs.10 per kg., as
follows: Goods sold within the State:4,000 kgs. Finished prodeuct sold in the
course of inter-state sale against C form-2,500 kgs. Goods sent on stock transfer
to consignment agents outside the State-2,000 kgs. Goods sold the Government
department outside the State-1,500 kgs. There was no opening or closing stock
of inputs. WIP or finished product. The State VAT rate on the finished product
of dealer is 12.5%. Calculate the liability of VAT and CST. Find VAT credit
available to dealer and tax required to be paid in cash. (15)
PAPER 10
APPLIED INDIRECT TAXATION
TEST PAPER — II/10/AIT/2008/T-3
Time Allowed : 3 hours Full Marks : 100
Answer any five questions
1. (a) How will the value of excisable goods be determined when price is not the sole
consideration for sale? (6)
(b) Can transit insurance be allowed as deduction as being part of transportation
cost? (2)
(c) How is the value of excisable goods determined in case of Depot transfer? (4)
(d) Asha Ltd. supplies raw material to a job worker K Ltd. After completing the
job-work, the finished product of 5,000 packets are returned to Asha Ltd. putting
the retail sale price of Rs.20 on each packet. The product in the packet is covered
under the MRP provisions and 40% abatement is available on it. Determine the
assessable value under Central Excise Law from the following details: (8)
i) Cost of raw materials supplied Rs. 30,000
ii) Job worker’s charges including profit Rs. 10,000
iii) Transportation charges for sending the raw material to the job worker
Rs. 3,000
iv) Transportation charges for returning the finished packets to Asha Ltd.
Rs. 3,000
2. Under the context of CENTRAL EXCISE ACT, 1944
(a) Does the following process amounted to manufacture or not : (3×2 = 6)
(i) Preparing masala powder by grinding and mixing of various spices
(ii) Crushing betel nuts into smaller pieces and sweetening the same with
essential/non-essential oils, menthol, sweetening agents, etc.
(b) State whether the following is manufacture or not : (3×2 = 6)
(i) Assembling of platform, load cells and indicator system, which became a
“WEIGH BRIDGE”.
(ii) ABC Ltd. is engaged in the process of mixing alumunium paste, metal lacquer
and thinner resulting in the production of alumunium paint having a shelf
life of 8-10 hours.
(c) Determine the value on which excise duty is payable : (4×2 = 8)
(i) P Ltd. sold goods to Q Ltd. at a value of Rs.500 per unit. In turn Q Ltd. sold
the same to R Ltd. at a value of Rs.600 per unit. If P Ltd. and Q Ltd. are
related, whereas Q Ltd. and R Ltd. are unrelated?
(ii) Indian Oil sells motor spirit to Hero Ltd. at a value of Rs.36 per litre. But
motor spirit has administered price of Rs.30 per litre, fixed by the Central
Government.
3. (a) Kareena Ltd. supplies raw material to a job worker Varun Ltd. After completing
the job work, the finished product of 10,000 packets are returned to Kareena
Ltd. putting a retail sale price as Rs.30 on each packet. The product in the packet
is covered under MRP provisions and 40% abatement is available on it. Determine
the assessable value under the Central Excise law from the following details:
Cost of Raw materials supplied Rs.60,000; Job worker’s charges including profit
Rs.20,000; transport charges for sending the raw materials to the job worker
Rs.5,000; transport charges for returning the finished product to Kareena Ltd.
(8)
(b) Define “Inputs” as per Central Excise Act, 1944 (4)
(c) The CENVAT Credit of the duty paid on inputs “ used in or in relation to” the
manufacture of final product is allowed. Elucidate this statement. (4)
(d) Examine giving reasons as to whether the manufacturing company X, and its
customer company Y are “related persons” for the purpose of valuation of
excisable goods, under the following circumstances :
i) Some directors of X are also directors of Y
ii) Y is a distributor of X but not a relative of X. (4)
4. (a) What is the taxable event under Customs?
(b) Explain the provisions under Customs Act relating to duty on “Pilfered Goods”.
(c) Write short notes on the following :
i) Levy of customs duty on goods derelict, wreck, jetsam, etc.
ii) Power to make rules for denaturing or mutilation of goods
Test Papers — Intermediate Group II 47
(d) M/s SAS imported 10000 citizen calculators model No. CT 500 of Chinese origin
from Singapore and declared value to be US$0.90 per piece in the Bill of Entry.
The customs authorities enhanced the value to be US$ 1.80 per piece on the
basis of price list of citizen calculator and contemporaneous imports at the same
value. Is the action of Customs justified.
5. (a) Discuss the includibility or otherwise to the assessable value under the Customs
Ac 1962 of the following payments made by the importer to the overseas supplier
of second hand plant in India :
(i) Dismantling charges for removing the second hand plant at the supplier’s
place an shipping to Indian importer.
(ii) Fees for supervision of erection and commissioning of plant in India. For this
purpose the foreign supplier deputed their technician in India.
(iii) Payments for tools, dies and moulds (imported along with plant) for use in
connection with the manufacture of excisable goods on successful
commissioning of the plant.
(iv) Lump sum payment and annual royalty for transfer of technical know-how
for manufacturing goods.
(b) ‘A’ imports by air from USA a Gear cutting machine complete with accessories
and spares. Its HS classification is 84.6140 and Value US $ FOB 20,000.
Other relevant date/information :
(1) At the request of importer, US $ 1,000 have been incurred for improving the
design, etc. of machine, but is not reflected in the invoice, but will be paid by the
party.
(2) Freight - US $ 6,000.
(3) Goods are insured but premium is not shown/available in invoice.
(4) Commission to be paid to local agent in India Rs.4,500.
(5) Freight and insurance from airport to factory is Rs.4,500.
(6) Exchange rate is US $ 1 = Rs. 42.
(7) Duties of Customs: Basic - 30% CVD - 14%.
Compute (i) Assessable value (ii) Customs duty.
6. (a) Write short notes on : Refund of export duty (4)
(b) Mention the supplies eligible for “Deemed Exports” (8)
(c) State the circumstances on which Duty Drawback is not eligible. (8)
7. In the context of Service Tax Laws, (4+6+6+4=20)
(a) Mention any four types of services on which there is a general exemption
available from the levy of service tax.
(b) Discuss whether the following persons are liable to apply for registration under
the service tax law and if yes, by which date :
(i) A provider of taxable service, whose aggregate value of taxable service is
Rs.8,01,000 as on 1.1.09
(ii) A provider of taxable service, who has provided services as follows: Aggregate
value of services upto 31/5/08 (i.e.before the service became taxable)
Rs.5,00,000. Aggregate value of taxable services from 1.6.07 to 31.3.09
Rs.7,99,000
(c) Give the due dates for payment of service tax in the following cases :
(i) M/s. X Ltd. a company, receives a payment of services provided in April’07
on 29th February, 09.
(ii) M/s YZ & Co. a partnership concern, receives payment of services provided
in April’07 on 15th March ’09.
(d) A cable operator charges Rs.20,000 for his services, which includes entertainment
tax paid Rs.4,000 paid on behalf of his client. Compute the value of taxable
service and service tax liability.
8. Choose the correct answer with regard to the provisions of the Central Sales-tax
Act :
(a) The collection of Central Sales-tax is effected by
(i) the State where the goods are produced ;
(ii) the State where the movement of goods begins ;
(iii) the State where the goods are delivered ;
(iv) the Central Government directly from the dealer. (1)
Test Papers — Intermediate Group II 49
(b) The levy of Central Sales-tax is on
(i) purchase of goods ;
(ii) sale of goods ;
(iii) purchase or sale of goods ;
(iv) None of the above. (1)
(c) G effected inter-state sale of declared goods to H, charging correct CST of 3%. G
should obtain from H
(i) Form ‘D’ ;
(ii) Form‘C’ ;
(iii) Form ‘G’ ;
(iv) No form. (1)
(d) R of Coimbatore, Tamil Nadu sold to a Malaysian ship at Kochi port in Kerala,
some goods for consumption on board the ship. Such sale will be
(i) inter-state sale ;
(ii) export sale as it is a foreign ship.
(iii) intra-state sale;
(iv) sale in the course of import. (1)
(e) A dealer engaged in effecting inter-state sale is required to get himself registered
where his turnover exceeds
(i) Any amount
(ii) Rs.1,00,000
(iii) Rs.2,50,000
(iv) Rs.3,00,000 (1)
(f) The collection of central sales tax is done by
(i) the State in which the movement of goods has first taken place ;
(ii) the State in which the movement of goods ends ;
(iii) the Central Government directly
(iv) none of the agencies above. (1)
50 Test Papers — Intermediate Group II
(g) R Oils Ltd., New Delhi sent via its pipeline special purified oil to B Ltd. in Noida,
Uttar Pradesh, through its branch at Noida. This transaction has to be regarded
as :
(i) Branch transfer by HO to branch
(ii) Branch transfer by HO to branch and then sale with State by the branch of R
Oils Ltd., to B Ltd.
(iii) Inter-State sale
(iv) Intra-State sale (1)
(h) X effected his first inter-state sale on 12.3.2005 and applied for registration on
10.4.2005. The effective date of registration will be :
(i) 10.4.2005
(ii) 12.3.2005
(iii) 12.4.2005
(iv) Date on which the registering authority issues the registration certificate. (1)
(i) In case of inter-State sale to the Government, the applicable rate of tax is —
(i) Nil
(ii) Always 4%
(iii) 4% or the sales tax rate for the concerned goods in the appropriate State,
whichever is higher
(iv) 4% or the sales tax rate for the concerned goods in the appropriate State,
whichever is lower. (1)
Fill up the blanks, having regard to the provisions of the Central Sales-tax Act.
(j) M, a dealer in Guwahati has sold goods to G in Surat for which the sales tax rate
in Guwahati is 2% and the rate in Surat is 3%. The CST leviable is…….. (1)
(k) The application for compulsory registration should be submitted by a dealer
within……….days of making an inter-state sale. (1)
(l) D of West Bengal sends goods to J of Mumbai for doing some job work. T adds
some materials of his own, completes the job and returns the same to C. The
above transaction……..(attracts/does not attract) liability to CST. (1)
Test Papers — Intermediate Group II 51
(m) The dealer aggrieved by an appealable order should normally file appeal
within……….days from the date of ……….. (1+1)
(n) Mr. Ishaan Avaasthi, is a dealer in Mumbai: Basic price of goods sold during the
year Rs.30,00,000, which excludes the followings: Excise duty Rs.80,000; Trade
commission for which credit notes have to be issued separately Rs.30,000;
installation charges Rs.25,000; freight recovered separately in the invoice
Rs.10,000. Duty drawbacks on exports Rs.23,000; export incentives to seller
Rs.30,000; Compute CST liability. Buyer issued Form C for all purchases. (6)
9. (a) Ms. MYM, a trader in West Bengal, has recorded a turnover of Rs.49 lakhs as on
31/3/09. What is the option available to her under the scheme of compounded
rate of tax?
(b) Ms. Trim, a shipper of raw jute, made purchases of raw jute in West Bengal
Rs.10 lakhs and from other states Rs.5 lakhs(inter-state purchases). State the
VAT liability.
(c) Mr. LPY is a dealer registered under WBVAT Act. He is engaged in purchasing
and selling goods in West Bengal. During the month of April ’08, he has made
the following purchases and sales :
Particulars Purchases (exclusive of VAT) Sales (inclusive of VAT)
Rs. Rs.
Schedule A goods 2,00,000 3,40,000
Schedule B goods 3,02,000 4,70,000
Schedule C goods 9,90,000 12,95,000
Schedule CA goods 5,50,000 8,90,000
Other information :
Sale return of Schedule CA goods after 6 months of sale Rs.50,000; Schedule CA
goods rejected and returned after 6 months Rs.20,000.
Purchase return of Schedule C goods Rs.5,000
Damage of Schedule C goods Rs.2,000
Schedule CA goods stolen from godown Rs.25,000
Compute VAT payable for the month of April’08. (3+3+14 =20)
PAPER 10
APPLIED INDIRECT TAXATION
TEST PAPER — II/10/AIT/2008/T-4
Time Allowed : 3 hours Full Marks : 100
Answer any five questions
1. (a) State the Conditions for levy of excise duty. (3)
(b) Discuss the Value based on Retail Sale Price. (5)
(c) Mention the invoice for removal of final products. (5)
(d) “Software is ‘goods’, but unbranded software is service”- Discuss. (3)
(e) What are the Input goods eligible for CENVAT to manufacturer? (4)
2. (a) A Trader supplies raw material of Rs. 1,150 to processor. Processor processes
the raw material and supplies finished product to the trader. The processor
charges Rs. 450, which include Rs. 350 as processing expenses and Rs. 100 as
his (processor’s) profit. Transport cost for sending the raw material to the factory
of processor is Rs. 50. Transport charges for returning the finished product to
the trader from the premises of the processor is Rs. 60. The finished product is
sold by the trader at Rs. 2,100 from his premises. He charges Vat separately in
his invoice at applicable rates. The rate of duty is 16% plus education cess as
applicable. What is the AV, and what is total duty payable? (8)
(b) An SSI unit (manufacturing goods eligible for benefits of SSI exemption
notification) has cleared goods of the value of Rs. 60 lakhs during the financial
year 2008-09. The effective rate of Central Excise Duty on the goods
manufactured by it is 8% Ad valorem. Education Cess is payable at applicable
rates. What is the correct amount of duty which the unit should have paid on
the above clearances for 2008-09? (8)
(c) Discuss the CENVAT Credit of Input Service. (4)
3. (a) Who is an ‘input service distributor’? (4)
(b) An assessee cleared various manufactured final products during June 2008. The
duty payable for June 2008 on his final products was as follows – Basic –
Rs. 2,00,000 Education Cesses – As applicable. During the month, he received
Test Papers — Intermediate Group II 53
various inputs on which total duty paid by suppliers of inputs was as follows –
Basic duty – Rs 50,000, Education Cess – Rs 1,000, SAH education Cess Rs 500.
Excise duty paid on capital goods received during the month was as follows –
Basic duty – Rs 12,000. Education Cess - Rs 240. SAH education cess - Rs 120.
Service tax paid on input services was as follows – Service Tax – Rs 10,000.
Education cess – Rs 200 SAH Education Cess - Rs 100. How much duty the
assessee will be required to pay by GAR-7 challan for the month of June 2008, if
assessee had no opening balance in his PLA account? What us last date for
payment? (10)
(c) Discuss the Accounting Treatment of Inputs in CENVAT. (4)
4. (a) Write short note on : Anti-Dumping Duty (3)
(b) Mention the exclusions from Assessable Value under Customs. (5)
(c) State the Procedures for Import (6)
(d) What is the procedure for Import through post? (6)
5. (a) An importer imports some goods @ 10,000 US $ on CIF basis. Following dollar
rates are available on the date of presentation of bill of entry : (a) RBI Floor rate :
Rs. 43.37 (b) Inter-bank closing rate : Rs. 43.38 (c) Rate notified by CBE&C under
section 14 (3) (a) (i) of Customs Act : Rs. 43.55 (d) rate at which bank has realised
the payment from importer : Rs. 43.58. Find the assessable value for customs
purposes. (6)
(b) FOB Cost of a consignment is 3,000 UK Pounds. Insurance and transport costs
are not available. What is Customs Value? On the date of filing of bill of entry,
Reserve Bank of India reference rate of US $ was 43.37 and inter-bank closing
rates were : Rs. 43.38 per US $ and Rs. 69.38 per UK Pound. Exchange rate
announced by Board (CBE&C) by customs notification was Rs. 69.78 per British
Pound. TT buying rate was 69.70 and TT selling rate was Rs. 69.61 per UK
pound. (5)
(c) An importer imported some goods for subsequent sale in India at $ 12,000 on
CIF basis. Relevant exchange rate as notified by the Central Government and
RBI was Rs. 45 and Rs. 45.50 respectively. The item imported attracts basic duty
at 10% and education cess as applicable. If similar goods were manufactured in
India, Excise Duty payable as per Tariff is 16% plus education cess of 2%. Spl
CVD is payable at applicable rates. Arrive at the Assessable value and the total
duty payable thereon. What are the duty refunds/benefits available if the
importer is (a) manufacturer (b) service provider (c) Trader? (10)
6. (a) Can the Customs Authorities confiscate non-dutiable and non-prohibited goods?
(3)
(b) In case of fraud, mis-statement, what is the penalty imposed by Customs? (3)
(c) State the difference between redemption fine and ‘fine’ imposable by judicial
authorities. (3)
(d) Write short note on : Prohibited goods (3)
(e) Define “Goods” under Customs Act. (4)
(f) Mention the types of Bonds. (4)
7. Examine the validity of following statements :
(a) National Research Institute is engaged in study, analysis, design and
programming of information technology software. The said services are taxable
under the category ‘business auxiliary services’. (4)
(b) The services provided by a money changer in relation to dealing of foreign
currency (buying or selling), at specified rates, without separately charging any
amount as commission for such dealing, is not liable to service tax as foreign
exchange broking under ‘banking and other financial services’. (4)
(c) The services provided by a consulting engineer engaged in providing consultancy
in the discipline of computer software engineering shall be exempt under the
category ‘consulting engineer’s service’. (4)
(d) Some transporters undertake door- to-door transportation of goods or articles
and they have made special arrangements for speedy transportation and timely
delivery of such goods or articles. Such services are known as ‘Express Cargo
Service’ with assurance of timely delivery. Such ‘Express cargo service’ is covered
under ‘courier agency service’. (4)
(e) Discuss briefly, the due date for e-payment of service tax. (4)
8. (a) Discuss the taxability of transfer of goods made otherwise than by way of sale
under Central Sales Tax Act,1956 (5)
(b) Mr.‘A’ of Madras sends his consignment of goods to his branch at Bangalore,
without any prior contract of sale when the goods are in transit, Mr.‘B’ of
Bangalore bought the railway receipt from A’s branch office. Does this amount
to sale? (5)
(c) Write short notes on : Exemption from C.S.T. of second and subsequent sales (5)
(d) “A Certificate of Registration once granted cannot be amended” -Discuss (5)
9. (a) VAT invoices act as the nucleus of entire machinery of VAT system. Elaborate.
(b) Enumerate the purchases eligible for availing input tax credit.
(c) Explain briefly the following having regard to the VAT provisions relating to
hire purchase transactions :
i) Finance charges/interest
ii) Goods returned
iii) Unpaid installments/forfeited installments
iv) Input tax credit
(d) Calculate the total tax liability under the State VAT law and under the Central
Sales Tax Act for the month of March 2009 from the following particulars :
Inputs purchased within the state Rs. 1,70,0000
Capital goods used in the manufacture of the taxable goods Rs.50,000
Inputs purchased from a registered dealer who opts for composition scheme
under the provisions of the Act Rs.10,000
High seas purchases of inputs Rs. 1,00,000
Finished goods sold :
(a) within the state Rs. 2,00,000
(b) in the course of inter-State trade Rs. 2,50,000
Applicable tax rates are as follows :
(a) VAT rate on capital goods 12.5%
Input tax rate within the state 12.5%
Output tax rate within the state 4%
Central sales tax rate 2%
(b) VAT rate on capital goods 4%
Input tax rate within the state 4%
Output tax rate within the state 12.5%
Central sales tax rate 2%
*Note – The capital goods are not the goods included in the negative list.
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