Sunday, October 05, 2014

Dibrugarh University - Management Accounting (Nov' 2013)

2013 (November)
Commerce (General /Speciality)
Course Code: 503
Full Marks: 80
Pass Marks: 32
Time: 3 Hours


1. (a) write true or false:               1x4=4
(i)      At break-even point, the company earns only a marginal profit.
(ii)    Depreciation of machinery is a source of funds.
(iii)   The different between actual cost and standard cost is known as differential cost.
(iv)  Budgetary control is a system of controlling cost.

(b) Fill in the blanks:                        1x4=4
(i)      Standard cost is the ___________ cost.
(ii)    In marginal costing system, fixed cost is considered as _______ cost.
(iii)   Income from investment is a cash flow from ______ activities.
(iv)  A budget manual spells out ___ of various executives concerned with budget.


2. Write short notes on :               4x4=16
(i)      Limitation of Management Account
(ii)    Responsibility Accounting
(iii)   Break-even Analysis
(iv)  Variance Analysis

3. (a) “Management Account has been evolved to meet the need of management.” Explain this statement.

Or

(b) Discuss, in detail, the functions of Management Accounting.

4. (a) The following information is given by Bharat Ltd:
Profit: Rs. 12000
Fixed Cost: Rs. 24000
Marginal of Safety: Rs. 30000

You are required to calculate the following:
(i)      Profit volume ratio
(ii)    Break even sales and actual sales
(iii)   Sales to earn a profit of 10% on sales.
(iv)  New break-even point, if variable cost is to be increased by 25%.

Or

(b) “ Marginal costing is a very useful technique to management for cost control, profit planning and decision making.” Explain.

5. (a) The following information of sales has been made available from the accounting records of Gama Engineering Company Ltd. For the last six months of 2011 and for January, 2012 only in respect of product X produced by it. The units sold in different months are as follows:

July, 2011 - 2200
August, 2011 - 2200
September, 2011 - 3400
October, 2011 - 3800
November, 2011 - 5000
December, 2011 - 4600
January, 2012 - 4000

There will be no work-in-progress at the end of any month Finished units equal to half the sales for the next months will be in stock at the end of every month (including June, 2011) Budgeted production and production cost for the year ending December, 2011 are as follows:

Production (units): 44000
Direct material per unit: 10
Direct wages per unit: 4
Total factory overhead apportioned: 88000

It is required to prepare Production budget for the last six months of 2011 and Production cost budget for the same period.

Or

(b) What do you mean by budgetary control? Explain the advantages of this system.

6. (a) The standard cost of a channel mixture is as under:
60 kg of material X at Rs. 20 per kg
40 kg of material Y at 30 per kg
A standard loss of 10% of input is expected in production.

The cost records for a period showed the following usage:
110 kg of material X at Rs. 18 per kg
90 kg of material Y at Rs. 32 per kg

The quantity produced was 182 kg of good products. Calculate the following;
(i)      Material Cost Variance
(ii)    Material Price Variance
(iii)   Material Usage Variance
(iv)  Material Mix Variance
(v)    Material Yield Variance

Or

(b) What is standard costing? How does it help in keeping control over cost? Point out its limitations.

7. (a) The balance Sheet of good Luck Co. Ltd as on 01.01.2012 and 31.12.2012 were as follows:
Liabilities
1.1.2012
31.12.2012
Assets
1.1.2012
31.12.2012
Share Capital
Long-term Debts 
Retained Earnings
Accumulated Depreciation
Sundry Creditor
50000
14000
28000
21000
2000
5300
13000
37000
25000
21000
Cash
Account Receivables
Invenstories
OtherCurrent Assets
Fixed Assets

20000
24000
31000
8000
50000
25000
27000
32000
7000
58000
133000
149000
133000
149000

Additional information:
(i)      Fixed Assets costing Rs. 12000 were purchased during 2012 for cash
(ii)    Fixed Assets (original cost Rs. 4000, accumulated depreciation Rs. 15000) were sold at book value
(iii)   Depreciation for the year 2012 amounted to Rs. 5500, which has been debited to Profit & Loss A/C
(iv)  During 2012 dividend paid 3000
(v)    You are required to prepare Cash Flow Statement as per AS-3 (Revised). 

Or


(b) What is Funds Flow Statement? Explain its managerial use.