M.B.A. (Part II) (Semester III) (New CBCS) Examination, 2018
MANAGEMENT ACCOUNTING (Paper XVIII)
Day and Date Monday, 10-12-2018 Max. Marks 70
Time 10.30 a.m. to 1.00 p.m.
Instructions All questions are compulsory.
Figures to the right indicate full marks.
1. Choose the correct alternative. 14
The primary goal of Management Accounting is to
Interpret financial data
Ascertain cost
Record all business transactions
Provide information for planning, decision making, etc.
The users of Management accounting are basically
Internal External
Both a and b None of these
is a plan expressed in quantitative, usually monetary terms
covering a specific period of time, usually one year.
Balance Sheet Profit and Loss A/c
Budget Cost sheet
budget is prepared assuming there will be no major changes
in level of activity.
Fixed budget Flexible budget
Master budget Zero based budget
Standard costs are
Ideal costs Normal costs
Reasonably attainable cost Competitors cost
variance occurs due to change in number of budgeted days
and actual days worked.
Capacity Variance Calendar Variance
Price Variance Mix Variance
If actual sales revenue is more than budgeted sales revenue the variance
will be
Favorable Unfavorable Efficient Moderate
Seat
No. Set P
Set P
SLR-CL 28 *SLRCL28*
When P/V ratio is 40% and sales value is Rs. the variable costs
will be
2,000 6,000 5,000 4,000
When break even sales is Rs. 5,00,000 and margin of safety is 37.5% then
total sales are Rs.
10,00,000 8,00,000 7,50,000 9,00,000
10) Gross working capital equals to
Total of current assets Total of current liabilities
Total of sundry debtors Cash and Bank balance
11) When actual price is higher or lower than the standard price, then it is
Sales price variance Sales volume variance
Sales mix variance Sales quantity variance
12) Estimate amount of profit if sales is 10,000 units fixed cost is Rs. 50,000,
variable cost per unit is Rs. and selling price per unit is Rs. 20.
Rs. 12,000 Rs. 5,000
Rs. 30,000 None of the above
13) is a budgeting process which demands each manager to
justify his entire budget in detail from beginning.
Functional budget Master budget
Zero base budgeting None of the above
14) Management accounting deals with
Quantitative information Qualitative information
Both a and b None of the above
2. Attempt the following
Types of report 7
Types of audit. 7
3. Solve the following
Raj Corporation Ltd. has prepared the following budget estimates for the
year 2016
Sales Unit 15,000
Fixed Expenses Rs.
Sales value Rs.
Variable cost Rs. 6 per unit.
Set P
*SLRCL28* SLR-CL 28
Calculate
P/V Ratio, BEP (sales) and margin of safety. Also calculate revised P/V
ratio, BEP (sales) and margin of safety when
Decrease of 10% in selling price
Increase of fixed cost by Rs. 7
All ball pen manufacturer has developed a new ball pen with unique features.
His design development executive has suggested three possible retail prices
Rs. 15 for Super Star; Rs. 10 for deluxe and Rs. for economy model.
His marketing manager says that the wholesaler and retailers have to be
given at least 30% discount.
The estimated fixed cost would be around Rs. 70,000 and variable cost
per unit would be Rs. 3.50/-
Calculate breakeven point for each model of ball pen.
How much should the manufacturer sell in order to make a profit of
Rs. Work out for each model. 7
4. Calculate 14
Material cost variance
Material price variance
Material usage variance
Material mix variance
Material yield variance.
Material A 50% Rs. 10 per Kg
Material B 30% Rs. 8 per Kg
Material C 20% Rs. 5 per Kg
Standard Loss 10% of output
Actual data for the month of December 2016
Material A 6000 Kg Rs. 11 per Kg
Material B 4000 Kg Rs. 7 per Kg
Material C 1500 Kg Rs. 4 per Kg
Actual production 9450 units.
OR
From the following projections of XYZ Ltd. for the next year. You are required
to determine the working capital required by the company.
• Annual sales Rs.
• Cost of production (including depreciation Rs. 1,20,000) Rs. 12,00,000
• Raw material purchased Rs.
Set P
• Monthly expenditure Rs.
• Estimated opening stock of raw material Rs.
• Estimated closing stock of raw material Rs.
Inventory Norms
Raw material 2 months, work in process 0.50 month, finished goods 1 month.
The firm enjoys a credit of half a month on its purchase and allows 1 month
credit on its supplies. On sales orders, the company receives an advance of
Rs. 15,000/-. You may assume that production is carried out even throughout the
year and minimum cash balance desired to be maintained is Rs. 35,000/-.
5. Prepare the cash budget from January to June 2017 from following data. 14
Month Sales Raw Materials
November 1,50,000 75,000
December 1,50,000 75,000
January 3,00,000 1,05,000
February 4,50,000 2,35,000
March 6,00,000 2,55,000
April 3,00,000 1,95,000
May 3,00,000 1,35,000
June 2,75,000 1,50,000
Further Information
Collection estimates
• Within the month of sale 10%
• During the month following the sale 80%
• During the second month following the sale 10%
Payment for raw materials is paid in time lag of half month.
Salary Rs. lease payment Rs. Misc. Exp. Rs. are
paid each month.
Monthly depreciation Rs. 12,500/-.
Income tax Rs. each in March and June.
Payment for research in April Rs. 95,000/-.
Closing cash balance on December 2016 was Rs. 55,000/-.