LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.Com. DEGREE EXAMINATION – COMMERCE
SIXTH SEMESTER – APRIL 2011
CO 6605 – MANAGEMENT ACCOUNTING
Date : 07-04-2011 Dept. No. Max. : 100 Marks
Time : 9:00 – 12:00
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SECTION A (2×10= 20 marks)
Answer all the questions.
- What is “Flow of Funds”?
- State any FOUR objectives of Financial Statement Analysis.
- What are the important features of Marginal Costing.
- What is “Key Factor”?
- What are the components of “Material Cost Variance”?
- Land & Buildings –Rs 6,00,000, Equity Share Capital –Rs 5,00,000,Debentures –Rs4,00,000, Sundry Creditors –Rs 1,50,000,Bank Over-draft –Rs 50,000, Stock –Rs 2,40,000. Debtors –Rs 2,00,000, Cash & Bank –Rs 55,000, Prepaid Expenses –Rs 5,000. From the above particulars Calculate ; (a) Current Ratio (b) Liquid Ratio.
- From the following figures Calculate: Funds from Operations:
Expenses Paid Rs 3,00,000 Net Profit for the year Rs 1,15,800
Depreciation Rs 70,000
Loss on sale of Machinery Rs 4,000
Goodwill written off Rs 20,000
Loss on sale of old furniture Rs 200
Profit on sale of Land &
Building Rs 60,000
- Calculate Break-even point from the following Particulars:
Fixed Expenses Rs 1,50,000
Variable Cost per unit Rs 10
Selling Price per unit Rs 15
- Product X requires 20 kgs of material at Rs 4 per Kg. The actual consumption of
Material for the manufacturing of product X came to 24kgs of material at Rs 4.50
Per kg. Calculate (a) Material Cost Variance
(b) Material Price Variance
(c) Material Usage Variance
- The Standard Time and Rate unit Component are given below:
Standard Hours 20
Standard Rate Rs 5 per Hour
Actual Production 1,000 units Actual hours – 20,500 hrs
Actual Rate per hour Rs 4.80
Calculate: (a) Labor Cost Variance
- Labor Efficiency Variance
- Labor Rate Variance
SECTION B (5x 8 =40 marks)
Answer any FIVE questions.
- What are the Functions of a “Management Accountant”?
- What is” Break-Even Analysis”? What are its merits?
- Define Zero Based Budgeting? Explain the steps involved in this process.
- From the extracts of the Balance Sheet and the additional information provided, you are required to identify how the transactions affect statement showing sources and uses of funds.
————————————————————————————————————- Particulars 2009 2010
————————————————————————————————————- Equity Share Capital Rs 2,00,000 Rs 3,00,000
Share Premium Rs 20,000 Rs 30,000
9% debentures Rs 1,00,000 Rs 1,50,000
Additional Information:
9% debentures worth Rs 30,000 were redeemed during the year.
- The following are the ratios of a trading concern:
Debtors Velocity – 3 months
Stock Velocity – 8 months
Creditors Velocity – 2 months
Gross Profit Ratio 25%
Gross Profit for the year amounted to Rs 4,00,000.
Closing stock of the year is Rs 10,000 more that the opening stock.
Bills receivable Rs 25,000. Bills Payable Rs 10,000.
Find out (a) Sales Tax (b) Sundry Debtors (c) Closing Stock (d) Sundry creditors.
- Calculate Pay – out Ratio and Retained Earnings Ratio from the following
Information:
Net Profit Rs 10,000
Provision for Tax Rs 5,000
Preference Dividend Rs 2,000
Number of Equity Shares 3000 shares
Dividend for Equity Share Re. 0.40
- The Statement of Cost of an article is as follows:
Material Rs 200
Labor Rs 100
Variable Expenses Rs 25
Fixed Expenses Rs 75
Profit Rs 125
Selling Price Rs 525
The number of articles made and sold are 10,000 units.
Find out: (a) Break – even Point
(b) How many articles must be produced and sold if the selling price is reduced by Rs 25 and the same profit is maintained.
- Prepare a Production Budget for each month and a summarized Cost Budget for the six months period ending 31st Dec 2009 from the following information of
“ Product ‘X””.
- There will be no work -in -progress at the end of any month.
- Finished Units equal to half the sales for the next month will be in Stock at the end of each month ( including June 2009)
- The Units to be sold for different months are as follows:
MONTH UNITS
July 2009 1,100
August 2009 1,100
September 2009 1,700
October 2009 1,900
November 2009 2,500
December 2009 2,300
January 2010 2,000
- Budget Production and Production Costs for the year ending 31st Dec 2009 are as follows:
Production (Units) 22,000
Direct Material per Unit Rs 10
Direct Wages per Unit Rs 4
Total Factory overhead apportioned to Product Rs 88,000.
SECTION C (2x 20= 40marks)
Answer any TWO questions.
19 .——————————————————————————————————————LIABILITIES 2009 2010 ASSETS 2009 2010
Rs Rs Rs Rs
Share Capital 2,00,000 3,00,000 Buildings at cost 1,50,000 2,30,000
Share Premium Plant& Machinery
Capital Reserve — 10,000 at Cost 2,60,000 3,20,000
Profit on Redemption Less: Depreciation 85,000 95,000
Of Debentures —– 1000 —————————– 1,75,000 2,25,000
Profit &Loss a/c Shares in Subsidiary
Bal b/f 40,000 40,000 Company 20,000 20,000
Profit for the year 45,000 Current Assets ;
5% Debentures 1,00,000 75,000 Stock 45,000 49,000
Current Liabilities; Sundry Debtors 15,000 18,000
Sundry creditors 60,000 1,04,000 Bank 25,000 48,000
Taxation 20,000 5,000
Proposed Dividend 10,000 10,000
4,30,000 5,90,000 4,30,000 5,90,000
Additional Information:
During the year 2010, Plant Costing Rs 15,000 (Accumulated depreciation there on Rs 8,000) was sold for Rs 5,000.
Prepare Funds Flow Statement.
- From the following information, you are required to prepare a Balance Sheet.
(a) Current Ratio 1.75
(b) Liquid Ratio 1.25
(c) Stock Turn-over Ratio –( Cost of Sales/Closing Stock) – 9.
(d) Gross Profit Ratio 25%
(e) Debt Collection Period 1 1/2 Months
(f) Reserves and Surplus to Capital 0.2
(g) Turn Over to Fixed Assets – ( based on Cost of Sales) – 1.2.
(h) Capital Gearing Ratio – 0.6
(i) Fixed Assets to Net Worth 1.25
(j) Sales for the year – Rs 12,00 000
- The Cost of an Article at a Capacity level of 5,000units is given below. The Degree of variability of the individual expenses are also given:
PARTICULARS RS (VARIABILITY)
Material Cost 25,000 ( 100% Varying)
Labor Cost 15,000 ( 100% varying)
Power 1,250 ( 80% varying)
Repairs and Maintenance 2,000 ( 75% varying)
Stores 1,000 ( 100% varying)
Inspection 500 ( 20% varying)
Depreciation 10,000 ( 100% varying)
Administrative Overheads 5,000 ( 25% varying)
Selling Overheads 3,000 (25% varying)
————————-
62,750
————————-
Cost Per Unit = Rs 12.55
Find out the Unit Cost of the Product at the Production Levels of 4,000 units and 6,000 units.
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