M.B.A. (Part II) (Semester III) (CBCS) Examination, 2017
Paper XVIII MANAGEMENT ACCOUNTING
Day and Date Friday, 05-05-2017 Total Marks 70
Time 10.30 a.m. to 1.00 p.m.
Instructions Q. No. 1 is compulsory.
Attempt any two questions from Q. No. 2 to Q. No. 4.
Attempt any two questions from Q. No. 5 to Q. No. 7.
Figures to the right indicate full marks.
1. Paints Private Ltd. Co. manufactures a single product is facing severe competition
in selling it Rs. 50 per unit. The company is operating at 60% level of capacity at
which level the sales are Rs. 12,00,000 and variable costs are Rs. 30 per unit.
Semi-variable costs may be considered as fixed at Rs. 90,000 when output is nil
and variable element at present level is Rs. 15,000 and thereafter the variable
element is Rs. 250 for each additional level of activity. Fixed costs are
Rs. 1,50,000 at the present level of activity. But at 80% level of activity or above,
these costs are expected to increase by Rs. 50,000.
The cope with the competition, Management of the company is considering a
proposal to reduce the selling price by 5%. You are required to prepare a statement
showing the operating profit at level of activity of 80% and 90%
assuming that
Selling Price remains at Rs.
The selling price reduced by 5%.
2. The following set of information is presented to you by your client AB Ltd. Producing
2 products X and Y.
Particulars X Y
Direct Material per Unit 20 18
Direct wages per Unit 06 04
Sales Price per Unit 40 30
Proposed Sales Mixes
Units 100 200
Units 150 150
Units 200 100
• Fixed expenses during the period are expected to be Rs.1600/-
• Variable expenses are allocated to products at the rate of 100% of direct
wages.
You are required to present to the management of AB Ltd. the following
The unit marginal cost and unit contribution.
The total contribution and resultant profit from each of the above mentioned
sales mixes.
The proposed sales mixes to earn a profit of Rs. 300 and Rs. 600 with the
total sales of X and Y being 300 units.
3. Attempt (Any
From the following data, prepare a production budget for the Sunlight Co. Ltd.
Product
As on 1st Jan. 2015
Units
As on 30th June 2015
Units
A 80,000 1,00,000
B 90,000 80,000
C 1,20,000 1,40,000
Requirement to fulfill sales programme
A 6,00,000 Units
B 5,00,000 Units
C 8,00,000 Units
Normal Loss in production on sales A B and C 6%.
Difference between Traditional costing and Activity based costing.
Types of Report.
4. The Standard materials cost to produce a tone of Chemical X is
300 Kg of material A Rs. 10 per Kg.
400 Kg of material B Rs. 5 per Kg.
500 Kg of material C Rs. 6 per Kg.
During a period, 100 tonnes of mixture X was produced from the usage of
35 tonnes of Material A at a cost of Rs. 9,000 per tonne
42 tonnes of Material B at a cost of Rs. 6,000 per tonne
53 tonnes of Material C at a cost of Rs. 7,000 per tonne
Calculate the Material price, Material usage, Material mix and Material yield
variance.
5. Explain Management Control system. Explain the application of Management
Control System in Health Care Organization and Financial Organization.
6. ABZ Co. Ltd. produces three products B and Z for which the standard cost
and quantities per unit are as follows
Particulars Product
A B Z
Output (units) 10,000 20,000 30,000
Direct Material Per Unit 50 40 32
Direct Labour Per Unit 30 40 48
Labour hours Per Unit (hours) 3 4 5
Machine hours Per Unit (hours) 4 4 7
No. of Purchase requisitions 600 900 1000
No. of Machine Set-ups 120 130 150
Production Overhead Split by department
Dept. X Rs. 12,00,000
Dept. Y Rs. 15,00,000
Total Rs. 27,00,000
Department X is labour intensive and Y is Machine intensive.
Total Labour hours in Dept. X 2,00,000
Total Machine hours in Dept. Y 5,00,000
Production overhead split by activity
Receiving and inspection Rs. 14,00,000
Production Scheduling/Set-up Rs. 13,00,000
Total Rs. 27,00,000
You are required to calculate the cost per unit of Each product B and Z
based on
Traditional method of charging overheads.
Activity Based Costing Method.
7. Explain meaning of Audit. Also explain different types of Audit.