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## 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

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