Saturday, September 12, 2015

Dibrugarh University Question Papers: Management Accounting (Nov' 2014)

2014 (November)
COMMERCE (General / Speciality)
Course: 503
(Management Accounting)
Full Marks: 80
Pass Marks: 32
Time: 3 hours

The figures in the margin indicate full marks for the questions.
  1. (a) Write True or False:                                                           1x4=4
a.       Profit changes in the same proportion of the changes in contribution.
b.      A system of budgetary control cannot be used in an organization where standard costing is in use.
c.       Cash Flow Statement is a statement of sources and application of cash during a particular period of time.
d.      In management accounting, only those figures are used which can be measured in monetary terms.

(b) Fill in the blanks:                                                                                                                                        1x4=4
a.       P/V ratio exhibits the percentage of contribution included in _____.
b.      Repayment of borrowing causes cash _____.

c.       Accounting information is _____ to make it useful.
d.      _____ budget is a summary of all functional budgets.

2. Write short notes on any four of the following:                                                             4x4=16
a)      Absorption costing
b)      Zero-base budgeting
c)       Change in product mix
d)      Overhead
e)      Pricing
f)       Make or buy decision

3. (a) “Management Accounting is nothing more than the use of financial information for management purposes.” Explain this statement and clearly distinguish between Financial Accounting and Management Accounting.         4+7=11
Or
(b) Explain the role of management accountant in a business enterprise.                      11

4. (a) The following are the Condensed Balance Sheet of P Ltd. at the end of 2012 and 2013:
Capital and Liabilities
2012 (Rs.)
2013 (Rs.)
Equity Share Capital
2,50,000
3,50,000
Reserve and Surplus
1,50,000
1,40,000
6% Debenture
50,000
20,000
Sundry Creditors
79,000
83,000
Outstanding Expenses
7,000
15,000
Provision for Depreciation
80,000
1,00,000
Provision for Income Tax
30,000
25,000
Proposed Dividend
37,500
52,500
Provision for Bad Debts
13,000
18,000

6,96,500
8,03,500
Assets
2012 (Rs.)
2013 (Rs.)
Land and Building
1,25,000
1,25,000
Plant and Machinery
2,40,000
3,60,000
Debenture Issue Expenses
10,000
3,000
Preliminary Expenses
15,000
12,000
Stock
1,90,000
1,93,000
Debtors
60,000
90,000
Bills Receivable
26,000
15,000
Cash in Hand and at bank
30,500
5,500

6,96,500
8,03,500
Additional Information:
(i) Income tax paid in 2013 was Rs. 35,000.
(ii) An old machinery was sold for Rs. 44,000 the cost and written down value of which were Rs. 60,000 and Rs. 40,000 respectively.
(iii) Bonus share at 2 for every 3 equity shares were issued out of accumulated reserve and surplus.
(iv) Out of the proposed dividend for 2012, only Rs. 30,000 was paid in 2013, and in addition to that in interim dividend for Rs. 25,000 was paid in the same year.
Prepare a Fund Flow Statement and Statement of Change in Working Capital of the company for the year that ended on 31st December, 2013.                                                         12
Or
(b) Discuss briefly the classification of activities as prescribed in AS-3 for preparation of Cash Flow Statement and give three examples of each such class of activities.
5. (a) (i) A company produces a single product which sells of Rs. 20 per unit. The variable cost is Rs. 15 per unit and the fixed overhead for the year is Rs. 6, 30,000. You are required to calculate:
(1) the sales value needed to earn a profit of 10% on sales;
(2) the sales price per unit to bring the BEP down to 120000 units.                             3+4=7

(ii) The ratio variable cost of sales in given to be 70%. The break-even point occurs at 60% of capacity sales. Find the capacity sales when fixed costs  are Rs. 1, 50,000 and also determine profit at 80% sales.                 2+2=4
Or
(b) Define marginal costing and discuss its contributions to the management in decision-making.                              5+6=11

6. (a) From the following information relating to 1987 and conditions expected to prevail in 1988, prepare a budget for 1988. Assume the rate of depreciation as 10%:                                                              11
1987
Actual
Sales – Rs. 1,00,000 (40000 units)
Raw Materials – Rs. 53,000
Wages – Rs. 11,000
Variable Overheads – Rs. 16,000
Fixed Overheads – Rs. 10,000
1988
Prospects
Sales – Rs. 1,50,000 (60000 units)
Raw Materials – 5% price increase
Wages :
10% increase in wage rates
5% increase in productivity
Additional Plant :
One lathe – Rs. 25,000
One drill – Rs. 12,000

Or
(b) Explain the objects and limitations of budgetary control.                                        5+6=11

7. (a) The standard material required to manufacture one unit of product X is 10 kg and the standard price per kg of material is Rs. 2.50. The cost accounts records however reveal that 11500 kg. of materials costing Rs. 27,600 were used for manufacturing 1000 units of product X. Calculate material variances.               11
Or

(b) Write a not on the advantages and application of standard costing.                   6+5=11

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