Note: (i) Attempt FIVE questions in all, including Question No. 9 which is COMPULSORY. Select at least ONE question from each of the PARTS A, B, C and D. All questions carry EQUAL marks.
(ii) Extra attempt of any question or any part of the attempted question will not be considered.

PART – A: (COST ACCOUNTING)

1. Explain the rationale supporting cost Accounting. How will it contribute to the efficient allocation of resources? Illustrate your answer.
2. Pervaiz Products Company uses a standard Cost System. For the year ended March 31 the company results may be summarized as under:
Particulars Standard Actual
Production (in units)
Material price per pound
Material quantity
Direct Labour hours
Direct Labour Cost per hour
Factory overhead:
(Variable expenses) 490.000
(Fixed expenses) 210.000
700,00
Actual overhead 140,000
Rs. 60,00
280,000Ibs
7,000
Rs. 22,50
700,000 143,000
Rs.62,50
290,000Ibs
6,900
Rs.22,00

Rs.716,500
There is no inventory of work-in-process at the beginning or at end of the above fiscal year.
Required:
(1) Prepare a statement showing analysis of variances.
(2) Compute actual and standard cost per unit of product.

PART – B (AUDITING)

3. State major contents of Annual Audit Report of a listed Public limited company under the Companies Ordinance, 1984.
4. Differentiate amongst the following:
(a) Internal Audit (b) Internal Control
(c) External Audit


PART – C: (INCOME TAX)

5. Define the following terms as have been used in the Income Tax Ordinance, 2001:
(a) Amalgamation (b) Business
(c) Depreciable (d) Income
6. The following particulars in respect of Mohammad Ali for the year ended on June 30, 2005 are available:
Particulars Rs
(1) Salary per month
(2) House property let out @ Rs. 3000 pm
(3) Profit on his 1/3rd share from a tailoring shop (AOP)
(4) Director’s fee
(5) Divided received from companies listed on Stock Exchange in Pakistan
72,000

36,000
33,600
21,000


9,600
He is a sleeping partner in the above AOP
Required:
Compute taxable income


PART – D: (BUSINESS ORGANIZATION & FINANCE)

7. Present a lucid analysis of operational of a joint Stock Company.
8. Explain major role of financial institutions. Are there any limitations in respect of their impact?


COMPULSORY QUESTION

9. Present your answer in the following format. Overwritten answers will carry no marks. One marks is for correct answer and one mark is for rationale:
S. No True/False Rationale

(1) Every limited company is legally required to get their account audited by a practicing Chartered Accountant. (True/False)
(2) Conversion Cost consists of Director Material. (True/False)
(3) Standard Costing Procedures are not relevant in job costing. (True/False)
(4) Second Schedule is annexed to the Income Tax ordinance, 2001 and deals with exemptions from income tax. (True/False)
(5) There can never be an insurance of a Valid nature without insurable interest.
(True/False)
(6) A loan taken from a bank for a period longer than two years is known as short-term loan. (True/False)
(7) Income Tax is livable on every person with an annual income of Rs. 80,000.
(True/False)
(8) Audit Engagement letter is always obtained after the end of the audit.
(True/False)
(9) Internal Audit is compulsory under the Companies Ordinance, 1984.
(True/False)
(10) Cost Accounting and Financial Accounting can be never be reconciled.
(True/False)

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