LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.B.A.  DEGREE EXAMINATION – BUSINESS ADMINISTRATION

SIXTH SEMESTER – APRIL 2012

BU 6603/BU 6600 – MANAGEMENT ACCOUNTING

 

 

 

Date : 20-04-2012              Dept. No.                                        Max. : 100 Marks

Time : 1:00 – 4:00

 

PART – A

 

 ANSWER ALL THE QUESTIONS:                                                                    (10 X 2 = 20 marks)

 

1. What are the tools of management accounting?
2. Give the meaning of the term: Window Dressing.
3. State two reasons for preparing cash budget.
4. What is the significance of liquidity ratios?
5. Why Net Working Capital is computed?
6. What is margin of safety?
7. Calculate P/v ratio given that sale is Rs. 30,000 and fixed  cost Rs. 15,000, contribution- Rs.12,000.
8. Compute Pay out Ratio: Net Profit-Rs.80, 000, Provision for Tax-40,000, Preference Dividend- Rs.10, 000, No. of equity Shares- 30,000, dividend per Equity Share-0.45.
9. Calculate the Material Usage variance.

STANDARD		ACTUAL
5 Kg. per unit	Rs5 per Kg	400 units are produced	2200 Kg consumed

1. What is FFO?

 

PART – B

 

ANSWER ANY FIVE QUESTIONS:                                                                    (5X8=40 Marks)

 

11. Discuss the importance of budgeting.
12. What are the uses of marginal costing as a tool for managerial decision making?
13. How Fund Flow Statement is different from a Balance Sheet?

1. The Sales turnover and profit during two years were as follows

Year                            Sales                Profit

Rs.                      Rs.

1991                         1,40,000               15,000

1992                         1,60,000               20,000

Calculate (a) P/V Ratio  (b) Break even point  (c) Sales required to earn a profit of

Rs.40, 000 (d) Fixed Expenses (e) Profit when Sales are Rs.1, 20,000(f) Margin of Safety.

15. A Factory is now Producing 10,000 units, costing information relating to the same are furnished below:

Per unit

Rs.

Direct material                                         70

Direct labour                                            25

Variable overheads                                  20

Fixed overheads

(Rs.1, 00,000)                                          10

Variable overheads (direct)                        5

Selling expenses (10% fixed)                   13

Distribution expenses (20% fixed)            7

Administration expenses (Rs.50, 000)       5

Total cost per unit                  –                  155

Prepare a flexible budget for the production of 7500 units.

1. Calculate sales Value variance and sales price variance.

Particulars	Standard			Actual
	Qty.	S.P.	Total	Qty.	S.P.	Total
Product A	500	5.00	2500	625	5.4	3375
Product B	700	8.00	5600	875	8.2	7175

 

17. Calculate 1. Current assets, 2. Current liabilities, 3. Liquid Assets and Stock from the following data:

Current Ratio: 2.8

Acid-test Ratio: 1.5

Working Capital – Rs.1,62,000.

 

18. The summarized Balance Sheets of Ms.Kiruba & Co as on 31-12-2010 and 31-12-2011 are furnished, prepare a Schedule of changes in Working Capital.

LIABILITIES	2010	2011	ASSETS	2010	2011
Share capital	12,00,000	16,00,000	Plant and machinery	8,00,000	12,00,000
Debentures	4,00,000	6,00,000	Land and building	6,00,000	8,90,000
P& L a /c	2,50,000	5,00,000	Stock	6,00,000	7,00,000
Creditors	2,30,000	1,80,000	Bank	40,000	80,000
Bad & Doubtful debts	12,000	6,000	Preliminary expenses	14,000	12,000
Depreciation on land & building	40,000	48,000	Debtors	1,38,000	1,22,000
Depreciation on plant & Machinery	60,000	70,000
	21,92,000	30,04,000		21,92,000	30,04,000

 

 

PART – C

 

ANSWER ANY TWO QUESTIONS:                                                                                (2X20=40)

 

19. Prepare a cash budget, for the month of April, May and June 2010.

 

Month	Sales	Purchases	Wages	Miscellaneous Expenses
February	1,20,000	84,000	10,000	7,000
March	1,30,000	1,00,000	12,000	8,000
April	80,000	1,04,000	8,000	6,000
May	1,16,000	1,06,000	10,000	12,000
June	88,000	80,000	8,000	6,000

Additional Information:

• Cash Balance: as on 1^st April Rs.1, 00,000.
• Sales: 20% realized in the month of sales, remaining in the subsequent month.
• Purchases: These are paid in the month following the month of supply.
• Wages: are paid in the same month.
• Miscellaneous expenses: Paid a month in arrears
• Rent: RS.1, 000 per month to be paid.
• Income-tax: First installment of advance tax Rs.25, 000 due on 15^th June
• Income from Investments: Rs.5, 000 to be received in April, July.

 

20. The following information is available from the records of AERO COOL Ltd.  Prepare a Profit and loss account and the Balance sheet as on 31^st

• Current ratio – 1.75
• Acid-test ratio- 1.27
• Working capital- Rs.33,000
• Fixed Assets to shareholders equity – 0.625
• Inventory turnover (based on Closing Stock) – 4 times
• Gross profit ratio- 40%
• Earnings per share – Re.0.50
• Debt collection period – 73 days
• of shares issued – 20,000
• Return on Investment – 25%

 

21. From the following balance sheet of a company prepare a Statement showing the fund Flow.

Liabilities	2005	2006	Assets	2005	2006
Share capital	1,00,000	1,25,000	Land & building	1,00,000	95,000
General reserve	25,000	30,000	Plant & machinery	75,000	84,500
P&L a/c	15,250	15,300	Inventories	50,000	37,500
Bank loan	35,000	–	Sundry debtors	40,000	32,000
Creditors	75,000	67,500	Cash	250	300
Provision for taxation	15,000	17,500	Bank	–	4,000
			Goodwill	–	2,000
	2,65,250	2,55,300		2,65,250	2,55,300

 

Additional information:

• Dividend of Rs.11,000 was paid during 2006.
• Depreciation written off – Rs.7,000.
• A provision of Rs.16,500 was made on taxation.

 

 

 

 

 

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