2018
MANAGEMENT ACCOUNTING
Paper: 205 (A)
(Accountancy Major)
Full Marks – 80
Time – Three Hours
The figures in the
margin indicate full marks for the questions
1.
(a) State whether the following statements are correct or incorrect: 1x5=5
1)
Financial Accounting is the base of Management
Accounting.
2)
Contribution is the difference between the sales
and the total cost.
3)
Zero-base budgeting was first used in America.
4)
In order to control costs, a concern may use
either budgetary control or standard costing but not both of these techniques.
5)
Flexible budgets change with the level of
activity.
(b) Fill in the blanks with appropriate word(s): 1x5=5
1)
Management Accounting is concerned with _______
reporting.
2)
In marginal costing, stock of finished goods is
valued at _______.
3)
P.V. Ratio can be _______ by increasing selling
price.
4)
Standard cost is a _______ cost.
5)
Idle time variance is idle time x _______.
2.
Answer the following questions: 2x5=10
a)
State two limitations of Financial Accounting.
b)
Define ‘Marginal cost’.
c)
Mention two assumptions of break-even analysis.
d)
What is ‘budget-manual’?
e)
Give the formula of Labour Efficiency Variance.
3.
Answer the following questions: 5x4=20
(a)
Explain the relationship between Financial Accounting and Management
Accounting.
(b)
What is Profit-Volume Ratio? Describe its importance.
Or
A firm provides you the following information:
Variable cost per
unit
Fixed expenses
Selling price per unit
|
Rs. 15
Rs. 54,000
Rs. 20
|
What should be the new selling price per unit, if the
break-even point is to be brought down to 6,000 units?
(c)
Discuss the objectives of budgetary control.
(d)
Write a note on ‘Performance budgeting’?
Or
Explain ‘Controllable variance’ and ‘Un-controllable
variance’.
4.
“Management Accounting is concerned with information which is useful to
management.” Explain the statement highlighting the nature of information
referred to. 10
Or
Discuss Management Accounting as a tool of planning and
exercising control. 10
5.
The expenses budgeted for production of 10,000 units in a factory are furnished
below: 10
Rs. per unit
|
|
Material
Labour
Variable overheads
Fixed overheads (Rs.
1,00,000)
Variable expenses
(direct)
Selling expenses
(10% fixed)
Distribution
expenses (20% fixed)
Management expenses
(Rs. 50,000)
|
70
25
20
10
5
13
7
5
|
Total
|
155
|
Assuming that management expenses are rigid for all levels
of production, prepare a flexible budget for the production of 8,000 units and
6,000 units.
Or
Describe the essential steps for adoption of a budgetary
control system. 10
6.
Explain the importance of the following in relation to marginal costing. 5+5=10
a)
Contribution.
b)
Margin of safety.
Or
A company has annual fixed cost of Rs. 1,40,000. In 2017
sales amounted to Rs. 6,00,000 as compared with Rs. 4,50,000 in 2016. The profit
in 2017 was Rs. 42,000 higher than in 2016.
1)
Find the break-even sales of the company.
2)
If there is reduction is selling price in 2018
by 10% and the company desires to earn the same amount of profit as in 2017,
what would be the required sales volume? 4+6=10
7.
What is Variance Analysis? Explain its significance for managerial decision
making purpose. 4+6=10
Or
A furniture company uses sun mica tops for tables. It
provides you the following data:
Standard quantity of
sun mica per table 4 sq. ft.
Standard price per
sq. ft. of sun mica Rs. 5
Actual production of
table = 1,000 numbers
Sun mica actually
used = 4,300 sq. ft.
|
Actual purchase price of sun mica per sq. ft. Rs. 5.50.
Calculate –
1)
Material cost variance.
2)
Material price variance.
3)
Material usage variance. 10
***
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