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Monday, March 19, 2012

Dibrugarh University - Management Accounting (2011)

1.(a) “Management  Accounting  is the presentation of  accounting  information in such a way as to assist  management in the creation of  policy and in the day—to—day  operation of the undertaking”. Elucidate this statement.
                                                                                                 Or
(b)Describe the role of Management Accounting in modern business world. How does it differ from cost Accounting?

2. (A) from the following data, calculate:
(I)Break—even point Expressed in amount of sales in rupees.
(ii)New break –even point if selling price is reduced by 20%.
(iii) How many units must be sold to earn a net income of 10% on sale?
Selling price (per unit)
Variable cost (per unit)
Fixed cost
Rs. 20
Rs. 12
Rs. 2, 40,000
(b) An automobile  manufacturing  company  finds that while the cost of making its  own workshop  part  No.0024 is  RS 6.00 each ,the  same is available in market at  Rs 5.60  with  an  assurance of continuous Supply.
Write a report to the Managing Director giving your views whether to make or buy this part .Give also your views in case the suppliers reduce the price from 5.60 to Rs 4.60 the cost data is as follows:
Materials
Direct labour
Other variable cost
Depreciation and other Fixed cost
2.00
2.50
0.50
1.00           
Total Cost
6.00

                                                                                              Or
“Marginal costs are primarily used in guiding decisions yet to be made.” Explain the statement giving examples.

3. (A) XYZ Ltd. Have prepared the budget for the production of 60000 units of the only commodity manufactured by them for the costing period as under:
Raw material
Direct labour
Direct expenses
Works overhead  (60% fixed)
Administrative overhead (80% fixed)
Selling overhead (50% fixed)
2.52 (RS. In lakh)
0.75   ””  
0.10    ”” 
2.25   ”” 
0.40   ””
0.20””  
THE actual production during the period was only 40000 units. Calculate the revised budgeted cost per unit.
                                                                                          Or
(b) What do you mean by cash budget? What are its advantages? How is it prepared?

4. The following information was obtained from the record of a manufacturing unit using standard costing system:
Actual overhead ---- Rs 1,800
Budgeted overhead ----Rs 2,000
Budgeted period ---- 4000 labour hours
Standard per unit ---- 10 labour hours
Budgeted number of days ---- 20
Standard overhead per hour----- Re 0.50
Actual number of days ---22
Actual hours ----4300
Actual   production ----425 units
Calculate---------
(a)    Expenditure variance ;
(b)   Calendar variance;
(c)    Capacity variance ;
(d)   Efficiency variance     
(e)   Volume Variance.  
                                                                    Or 
What do you understand by the term variance and variance Analysis? Explain the importance of variance Analysis.

5. Following are the summarized Balance sheet of Amcor as on 31st December, 2008 and 2009:
Liabilities
Amount
Assets
Amount
2008
2009
2008
2009
Share capital     
General Reserve
Profit &loss A/c   
Bank loan (Long—term)
Creditors
Provision for tax
200000
50000
30500
70000
150000
30000
250000
60000
30600
-------
135200
35000
Land and Building
Machinery
Stock
Debtors
Cash
Bank
Goodwill
200000
150000
100000
80000
500
----------
----------
190000
169000
74000
64200
600
8000
5000

530500
510800

530500
510800

Additional Information:
                    I.      Divided of RS 23,000 was paid
                  II.      Assets of another company were purchased for a consideration of RS 50,000 payable in shares. The following was further purchased:
Stock -----Rs 20,000
Machinery --- Rs25, 000
                III.      Machinery was further purchased for Rs 8,000
                IV.      Depreciation written off on machinery RS 12,000
                  V.      Income tax provided during the year RS 33,000          
                VI.      Loss on sale of machine RS 200 was written off to General Reserve. Prepare a cash flow Statement from the above.
                                                                              Or
What is the purpose of preparing a cash Flow Statement? How is it prepared?