M.Com. (Semester IV) (CBCS) Examination Nov/Dec-2018
MANAGEMENT ACCOUNTING (Compulsory Paper III)
Time: 2½ Hours Max. Marks: 70
Instructions: All questions are compulsory.
Figures to the right indicate full marks.
Q.1 Choose the correct answer among the alternatives given for each question. 14
Variable cost plus fixed cost plus or minus profit or loss is equal to
Sales Purchases
P/V Ratio Contribution
The variance arises due to difference between the number of
working days in the budgeted period and the number of actual working days.
Idle time Variable overhead
Material usage Calendar
If P/V ratio is 20% and fixed cost Rs. 1,00,000 then break-even sales are Rs.

5,00,000 50,000
2,00,000 1,50,000
Marginal costing takes into consideration only expenses.
Fixed Variable
Indirect Semi-Variable
Break-even point is the point at which there is
No profit No loss
No profit or no loss None of these
Contribution
Selling price Variable costs
Selling price Fixed costs
Selling price Fixed and Variable costs
Selling price-Semi-variable costs
If the period of the budget is one year or so it is termed as budget.
Long term Short term
Current Annual
Expenditure incurred to increase revenue earning capacity is termed as
expenditure.
Capital Revenue
Differed None of these
The Budget Committee prepares budget.
Production Cash
Master None of these
10) Budgeting is done mainly by management.
Lower Middle
Top None of these
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11) The execution of plans and policies is the responsibility of
Top management Middle management
Lower management None of these
12) Reports to the top management should be
Legendry Detailed
Summarized form None
13) A is the difference between the actual cost and standard cost.
Profit Fixed cost
BEP sales Variance
14) When actual cost incurred is less than the standard cost, the deviation is
known as variance.
Favorable Unfavorable
Adverse No variance
Q.2 Write short note on: 14
Components of MIS
Budgetary control
Q.3 Find out Break Even Point and Profit if sales are Rs. 50,00,000 and P/V Ratio
is 50% and Margin of safety is 40%
07

Standard output 150 units
Standard time per unit 3 hrs
Standard rate per hour Rs. 4
Actual output 120 units
Total actual time taken 225 hrs
Actual Rate per hour Rs. 5
07
Calculate Labor Cost Variance.
Q.4 Prepare a Cash Budget for the three months ended 30th September, 2017
based on the following information.
14
Cash and Bank Balance on 1st July 2017 Rs. 25,000
Salaries and wages estimated monthly Rs. 10,000
Interest payable August 2017 Rs. 5,000
Estimated
June
Rs.
July
Rs.
August
Rs.
September
Rs.
Cash Sales 1,40,000 1,52,000 1,21,000
Credit Sales 1,00,000 80,000 1,40,000 1,20,000
Purchases 1,60,000 1,70,000 2,40,000 1,80,000
Other expenses 20,000 22,000 21,000
Credit sales are collected 50% in the month following. Collections from credit
sales are subject to discount if payment is received during the month of
purchases and 2.5% if payment is received in the following month. Creditors
are paid either on prompt or 30 days basis. It is estimated that 10% of the
creditors are in the prompt category.
OR
Explain marginal cost and marginal costing. State the advantages and
limitations of marginal costing.
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Q.5 A Company producing a single article sells it at Rs. 10 each. The marginal
cost of production is Rs. 6 and the fixed cost is Rs. 400 p.a.
Calculate
P/V Ratio
The Break even sales
The sales to earn profit of Rs. 500
Profit at sales of Rs. 3,000
14
OR
Define standard costing. Point out the difference between standard costing
and budgetary control.