M.Com. (Semester IV) (CBCS) Examination Oct/Nov-2017
MANAGEMENT ACCOUNTING
Day Date: Wednesday, 22-11-2017 Max. Marks: 70
Time: 02.30 PM to 05.00 PM
Instructions: All questions are compulsory.
Figures to the right indicate full marks.
Use of calculator is allowed.
Q.1 Choose the alternatives given below. 14
arises only when more than one material is used in the
manufacturing of a product.
Material Mix Material Rate
Labour Rate Material Price
the difference between the selling price and variable cost.
Contribution Margin of Safety
Fixed Cost P/V Ratio
Cash budget, purchase budget, expenses budget, sales budget etc. are the type
of
Functional Fixed
Capital Long Term
The cost of product as determined under standard cost system is

Pre-determined Actual
Differential Direct
Additional cost of producing one addition unit is called
Marginal Fixed
Standard Variable
is the part of total cost which changes or varies directly in
proportion with volume.
Fixed Capital
Differential Variable
Which is the reason for labour efficiency variance?
Change in the system of payment of wages
Employment of unskilled labour to a large extent
Changes in the grade of workers
Poor working condition
The organized method of providing each manager with all the
data and only those data which he needs for his decisions.
Management Reporting
Management Accounting
Management Information Technology
Management Information System
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The variance arises due to difference between the number of
working days in the Budgeted period and the number of actual working days.
Calendar Labour efficiency
Labour rate Material mix
10) At Break Even Point fixed cost is always equal to total .
Profit Contribution
Sales Margin of Safety
11) blue print of the projected plan of action to be carried out during
specific period in future.
Standard cost Variance
Budget Working Capital
12) Variable cost plus fixed cost plus or minus profit or loss is equal to
Sales Purchases
P/V Ratio Contribution
13) A formal communication, mostly written, which generally moves
upward.
Budget Report
Product mix Margin of Safety
14) When actual cost incurred is less than the standard cost, the deviation is known
as
Favorable Unfavorable
Adverse No Variance
Q.2 Write short answer. 14
Methods of Reporting
Advantages of Standard Costing
Q.3 From the following information prepare statement of profitability showing the
payback period of two alternatives.
07
Particulars Machine M Machine B
Estimated life of machine
Cost of Machine
Estimated savings in scrap
Estimated savings in direct wages
Additional cost of maintenance
Additional cost supervision
4 years
Rs.9,000
Rs.500
Rs.6,000
Rs.800
Rs.1,200
5 years
Rs.18,000
Rs.800
Rs.8,000
Rs.1,000
Rs.1,800
With the help of following information calculate:
Labour Cost Variance
Labour Rate Variance
Labour Efficiency Variance
Standard Hours: 80 Rs.3 per hour
Actual Hours 100 Rs.4 per hour
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Q.4 The Budgeted expenses for production of 1,00,000 units in a factory are
furnished bellow:
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Particulars Cost per Unit
Materials
Labour
Overheads
Fixed Overheads (Rs.10,00,000)
Variable expenses (Direct)
Selling expenses fixed)
Distribution expenses fixed)
Administration expenses (Rs.5,00,000)
Total cost of per unit (to make and sell)
Rs.70
Rs.25
Rs.20
Rs.10
Rs.05
Rs.13
Rs.07
Rs.05
Rs.155
Prepare Budget for production of 80,000 units and 60,000 units. Assume that
administration expenses are rigid for all levels of production.
OR
From the following information prepare Cash Budget for the Month April to June
2016.
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Month Total Sales Materials Wages Overheads
February 6,00,000 4,00,000 80,000 60,000
March 7,50,000 5,00,000 1,00,000 70,000
April 9,00,000 6,00,000 1,20,000 80,000
May 10,50,000 7,00,000 1,40,000 90,000
June 12,00,000 8,00,000 1,60,000 1,00,000
Other Information:
Cash Sales are 20% of total sales.
Credit sales are collected in the next month.
Lag in payment of wages is 1/4th month.
10% of materials purchases are on prompt basis, remaining are paid in the
following month.
Delay in payment of Overheads one month.
Opening Cash Balance on 1st April 2016 is expected to be Rs.2,00,000.
Q.5 The Reliable Battery Co. furnishes you the following information. 14
First Half Second Half
Sales 8,10,000 10,26,000
Profit 21,600 64,800
You are required to compute the following assuming that the fixed cost remains
the same in both the periods.
P/V Ratio
Fixed Cost
The amount of profit or loss where sales are Rs.6,48,000
The amount of sales required to earn a profit of Rs.1,08,000
OR
From the following data for the month of May 2016 calculate:
Material Cost Variance
Material Price Variance
Material Usage Variance
Material Mix Variance
Material Yield Variance.
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Material Standard Rate Rs. Actual Rate Rs.
X 8,000 kg 1.05 7,500 kg 1.20
Y 3,000 kg 2.15 3,300 kg 2.30
Z 2,000 kg 3.30 2,400 kg 3.50