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## Saturday, November 01, 2014

### Dibrugarh University - Management Accounting (2013 - Old Course)

2013 (Old Course)
Management Accounting
Speciality
Full Marks: 70
Pass Marks: 28
Time: 3 Hours

1. (a) “Management Accounting is concerned with accounting information that is useful to management”. Explain the statement.                                         14
Or
(b) Discuss the limitations of Financial accounting and point out how far Management Accounting helps in overcoming such limitations.                                          6+8=14

2. (a) Enumerate the significance of break-even point, margin of safety, contribution and profit-volume ratio in managerial decision-making.                                              3.5x4=14
Or
(b) The following data are available from the records of a company:

Sales      Rs.60, 000
Variable cost      Rs.30, 000
Fixed Cost           Rs.15, 000
You are required to calculate:
(i) P/V ratio, break-even point and margin of safety at this level;
(ii) the effect on BEP at 10% increase in selling price;
(iii) the effect on margin of safety at 10% decrease in selling price             (2x3) +4+4=14

3. (a) From the following budgeted data, forecast the cash position at the end of April, May and June, 2012:        14
 Month Sales Purchases Wages Miscellaneous Expenses February March April May June 120000 130000 80000 116000 88000 84000 100000 104000 106000 80000 10000 12000 8000 10000 8000 7000 8000 6000 12000 6000
(i) Sales: 20% realised in the month of sales, discount allowed 2%. Balance realised equally in two subsequent months.
(ii) Purchases: These are paid in the month following the month of supply.
(iii) Wages: 25% paid in arrear following month.
(iv) Miscellaneous expenses: Remain outstanding for one month.
(v) Rent: Rs.1000 per month paid quarterly in advance due in January, April, July and October every year.
(vi) Income tax: First instalment of advance tax Rs.25000 due on or before 15th June.
(vii) Income from investments: Rs. 5000 received quarterly in April, July etc.
(viii) Cash in hand: Rs.5000 on 1st April, 2012.
Or
(b) What do you mean by budget and budgetary control? State the objectives and limitations of budgetary control.                4+5+5=14

4. (a) The following schedule shows the Balance Sheet of Life Line Ltd. at the end of the year 2011:
 Liabilities & Capital 01.01.11 31.12.11 Assets 01.01.11 31.12.11 Share Capital 8% Debenture Sundry Creditors Outstanding Expenses Depreciation Fund Reserve for Contingency Profit and Loss A/c 115000 45000 51500 6500 20000 30000 8000 115000 35000 48000 6000 22000 30000 11500 Cash and Bank Balance Book Debt Temporary Investment Prepaid Expenses Inventory Land and Building Machinery 45000 33500 55000 500 41000 75000 26000 45000 21500 37000 1000 52000 76000 35000 276000 267500 276000 267500

(i) 10% Dividend was paid in cash.
(ii) New Machinery was purchased but old machinery costing Rs.6000 was sold for Rs.2000, accumulated depreciation was Rs.3000.
(iii) Rs.10000 8% debenture was redeemed by purchase from open market @96 for a debenture of Rs.100.
(iv) Rs.18000 investment was sold at book value.
You are required to prepare Cash Flow Statement of Life Line Ltd.                            14
Or
(b) Define the term “Fund flow”. What are the purposes of preparing Fund flow statement? Write four limitations of Fund Flow Statement.                                              2+8+4=14

5. (a) What is Standard Costing? How does it help in keeping a control over cost? Point out its limitations.              4+5+5=14
Or
(b) The budget and actual sales for a period in respect of two products are given below:
 Product Budgeted Quantity Price Actual Quantity Rate A B 1000 2000 20 15 1300 2300 21 14 3000 3600
Calculate:
(i) Sales value variance
(ii) Sales Volume variance
(iii) Sales price variance
(iv) Sales mix variance                                    3+3+3+5=14