Tuesday, October 18, 2016

Dibrugarh University Question Papers: Management Accounting (Nov' 2015)

2015 (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:             1x3=3
                     i.         Management accounting deals only with the information which is useful to the management.
                   ii.         P/V ratio can be improved by reducing the fixed cost.
                  iii.         Cash Flow Statement is based upon accrual basis of accounting.

(b) Fill in the blanks:                        1x5=5
                     i.            The difference between Actual Cost and Standard Cost is known as ____.
                   ii.            Only ____ information is recorded in accounting.
                  iii.            Margin of safety can be improved by reducing the ____ cost.
                 iv.            Any transaction that increases working capital is a ____ of fund.
                   v.            Repayment of borrowing causes cash ____.

2. Write short notes on any four of the following:             4x4=16
a)   Limitations of management accounting.

b)   Cost-volume-profit analysis.
c)    Advantages of standard costing.
d)   Cash Flow Statement.
e)   Responsibility accounting.
f)    Assumptions of break-even analysis.

3. (a) “Management accounting aims at providing financial results of the business to the management for taking decisions.” Explain by bringing out the advantage of management accounting.                          11
Or
(b) Explain the characteristic features of management accounting. What are the tools which make it useful for the management?                  4+7=11

4. (a) The following information is given by XYZ Ltd. :

Selling price per unit                                                                      
Variable cost per unit                                                                     
Fixed cost                                                                                
Rs.
10
6
24,000
You are required to calculate –
                     i.            Break-even sales (in units);
                   ii.            Sales to earn a profit of 10% on sales;
                  iii.            New BEP, if selling price is reduced by 10%.
                 iv.            New selling price, if BEP is to be brought down to 4800 units.                                              2+3+3+3=11
Or
(b) “Marginal costing is a very useful technique to management for cost control, profit planning and decision making.” Explain.                                11

5. (a) A factory is currently running at 50% capacity and produces 5000 units at a cost of Rs. 90 per unit as per details given below:
Raw materials –
Labour –
Factory overhead –
Administrative overhead –
The current selling price is Rs. 100 per unit.
Rs. 50
Rs. 15
Rs. 15 (Rs. 6 fixed)
Rs. 10 ( Rs. 5 fixed)
At 60% working, raw material cost per unit increases by 2% and selling price per unit falls by 2%.
At 80% working, raw material cost, per unit increases by 5% and selling price per unit falls by 5%.
Estimate profits of the factory at 60% and 80% working and offer your comments.                                   9+3=12
Or
(b) What do you mean by cash budget? What are its advantages? How is it prepared?                                    3+3+6=12

6. (a) X Ltd. furnished the following particulars for the year 2014:
Actual output – 900 units
Budgeted output – 1000 units
Actual fixed overhead – Rs. 49,500
Budgeted fixed overhead – Rs. 50,000
Standard time per unit – 2 hours
Actual clock hours – 1900 hours (including 200 hours as idle time)
You are required to calculate the following variances:                     2x5=10
                     i.         Overhead Cost Variance.
                   ii.         Overhead Volume Variance.
                  iii.         Overhead Capacity Variance.
                 iv.         Overhead Efficiency Variance.
                   v.         Overhead Idle Time Variance.
Or
(b) What is standard costing? How would you distinguish it from budgetary control? Point out the limitations of standard costing.                                2+4+4=10

7. (a) Following are the Balance Sheets of Tulsian Ltd. for the year ending on 31st March, 2013 and 31st March, 2014:
Assets
31.03.2013
Rs.
31.03.2014
Rs.
Fixed Assets
10% Investment (long term)
Debtors
Stock
Cash
Underwriting Commission
Discount on Issue of Debentures
10,20,000
60,000
80,000
3,80,000
1,20,000
5,000
15,000
12,40,000
1,60,000
1,50,000
3,70,000
3,60,000
6,000
4,000

16,80,000
22,90,000
Liabilities
31.03.2013
Rs.
31.03.2014
Rs.
Equity Share Capital
18% Preference Share Capital
Profit & Loss A/c
Reserves
14% Debentures
Creditors
Bank Overdraft
Proposed Dividend
Provision for Tax
Provision for Doubtful Debts
Unpaid Dividend
Unpaid Interest on Debentures
6,00,000
4,00,000
1,00,000
1,20,000
2,00,000
40,000
60,000
1,20,000
20,000
20,000
-
-
8,00,000
2,00,000
4,00,000
1,40,000
3,00,000
1,50,000
50,000
1,50,000
40,000
30,000
20,000
10,000

16,80,000
22,90,000
Additional Information:
                     i.            A machine costing Rs. 1,40,000 (depreciation provided thereon Rs. 60,000) was sold for Rs. 50,000. Depreciation charged during the year was Rs. 1,40,000.
                   ii.            An interim dividend @ 15% was paid on equity shares. New shares and debentures were issued on 31.03.2014.
                  iii.            Tax paid during the year was Rs. 10,000.
                 iv.            On 31.03.2014, some investments were purchased for Rs. 1,80,000 and some investments were sold at a profit of 20% on sale.
                   v.            Preference shares were redeemed on 31.03.2014 at a premium of 5%.
You are required to prepare Cash Flow Statement as per AS-3 (Revised) by indirect method.                                      12
Or

(b) Discuss the importance of Fund Flow Statement. How do you determine whether a particular change is in the nature of a source or of an application of fund?                                     8+4=12

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