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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
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:
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
(iii)   Actual hours for actual production
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