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Sunday, December 23, 2012

Dibrugarh University - Management Accounting (2012 - Old course)



1.       (a) “The managerial objectives of accounting are to provide data to help the management in planning, decision-making, coordinating and controlling operations.” Discuss.
Or
(b) “Management accounting is nothing more than the use of financial information for management purpose.” Explain the statement and clearly distinguish between financial accounting and management accounting.  7+7=14

2.       (a) (i) You are given the following data for the coming year of a factory :
Budgeted output – 80000 units
Fixed expenses – Rs. 400000
Variable expenses (per unit) – Rs. 10
Selling price (per unit) – Rs. 20
Draw a break even chart showing the break even point. If the selling price is reduced to Rs. 18 per unit, what will be the new break-even point?   7

(ii) The following data are available from the record of a factory:
Sales                                      Rs. 60000
Variable cost                          Rs. 30000
Fixed cost                              Rs. 15000
You are required to calculate profit volume ratio, break – even point and margin of safety at this level.  2.5+2.5+2=7
Or
(b) “Marginal costing is essentially a technique of cost analysis and cost presentation.” Discuss the statement with reference to the application, merits and limitations of marginal costing.  5+5+4=14

3.       (a) A manufacturing company is currently producing 12000 units (at 60% capacity). The following particulars relating to cost structure are available(per unit):
Direct materials                                                     Rs. 50
Direct labour                                                         Rs. 20
Manufacturing overhead (60% fixed)                     Rs. 50
Administrative overhead (Fixed)                            Rs. 20
Selling and distribution overhead(40% variable)     Rs. 30
Profit                                                                    Rs. 30

Prepare a flexible budget for 80% and 100% activity level taking into account the following further information:  14
(i)      If activity exceeds 60%, a 5% quantity discount on raw materials on account of increase in the total quantity will be received.
(ii)    The present fixed cost structure will remain constant up to 90% capacity, beyond which a 20% increase in cost is expected.
(iii)   The present selling price will remain constant up to 85% capacity activity level, beyond which a 5% reduction on total selling price will be considered.
Or
(b) What is zero base budgeting? What are different steps involved in it and how are they useful to the management? 4+6+4=14

4. (a) A cost accountant of a company was given the following information regarding the overheads for the month of july, 2011:
Overhead cost variance – Rs. 1400 (Adverse)
Overhead volume variance – Rs. 1000 (Adverse)
Budgeted hours for july, 2011 – 1200 hours
Budgeted overheads for july, 2011 – Rs. 6000
Actual rate of recovery of overhead – Rs. 8 per hour.
You are required to assist him in computing the following for the month of july, 2011:   2+3+3+3+3=14
(i)      Overhead expenditure variance
(ii)    Actual overhead incurred
(iii)   Actual hours for actual production
(iv)  Overheads capacity variance
(v)    Overhead efficiency variance
Or
(b) What is standard costing? Distinguish between standard cost and estimated cost. Point out its limitations.   4+6+4=14

5. (a) The following Balance sheets have been prepared by Suman Ltd. For the year ended on 31st December, 2009 and 2010:
Liabilities
2009 (Rs.)
2010 (Rs.)
Assets
2009 (Rs.)
2010 (Rs.)
Equity share Capital
10% preference share capital
5% Debenture
Capital redemption reserve
Profit and loss account
Creditors
Other liabilities
400000
200000
-------
-------
250000
150000
75000
500000
--------
100000
100000
60000
140000
90000
Fixed assets
Debtors
Inventory
Cash
Preliminary expenses

605000
120000
200000
90000
60000
570000
140000
180000
60000
40000

1075000
990000

1075000
990000

Additional information:
(i)      Preference shares were redeemed at 10% premium on 30th june, 2010 and debentures were issued on the same date.
(ii)    Fixed assets were purchased for Rs. 195000.
(iii)   Fixed assets at book value of Rs. 140000 were sold for Rs. 80000.
(iv)  Dividend on equity shares was paid for Rs. 40000.
Prepare cash flow statement.  14
Or
(b) What do you mean by a cash flow statement? Explain clearly the difference between fund flow and cash flow statement.   4+10=14.