LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.Com. DEGREE EXAMINATION – COMMERCE
SIXTH SEMESTER – APRIL 2012
CO 6605 – MANAGEMENT ACCOUNTING
Date : 18-04-2012 Dept. No. Max. : 100 Marks
Time : 1:00 – 4:00
PART – A
Answer ALL questions: (10×2=20marks)
- What is a “Master Budget”?
- What are “Funds”?
- What is “Marginal Costing”?
- What are some of the “Liquidity Ratios?”
- What is “Key Factor”?
- Calculate Current Ratio from the following information:
Rs. Rs.
Stock 60,000 Sundry Creditors 20,000
Sundry debtors 70,000 Bills Payable 15,000
Cash Balance 20,000 Tax Payable 18,000
Bills Receivable 30,000 outstanding expenses 7,000
Prepaid expenses 10,000 Bank Overdraft 25,000
Land & Building 1,00,000 Debentures 75,000
Good will 50,000
- Specify how the following transactions will appear in the statement showing sources and uses of funds:
- a) Stock of Raw materials purchased for Rs 3,00,000
- b) Sundry Creditors paid Rs 2,50,000 by cheque.
- c) Purchased Goodwill of another company for RS 4,50,000
- d) Shares issued for Rs 3,00,000 to public.
- e) Debentures redeemed for Rs 4,00,000
- f) Purchased machinery worth Rs 3,50,000 and settlement made by issuing shares in
the company.
- g) Long term loan repaid Rs 3,00,000.
- Determine the amount of fixed expenses from the following particulars:
Rs.
Sales 2,50,000
Direct material 80,000
Direct Labour 50,000
Variable Overhead 20,000
Profits 60,000
- ”Product X” requires 20 kgs of materials at Rs 4 per Kg. The actual consumption of
material for the manufacturing of “Product X” came to 24 kgs at Rs 4.50/ per kg.
Calculate :
- Material cost Variance
- Material Price Variance
- Material Usage Variance
- You are required to calculate :
- a) P/ V Ratio (b) Sales to earn a profit of Rs 40,000.
The following information is given:
Sales Rs 1,00,000
Profit 10,000
Variable Cost 70% of Sales.
PART – B
Answer any FIVE questions: (5×8=40marks)
- What is Zero Base Budgeting? What are the steps involved in the process of introducing Zero Base budgeting in an Organization?
- What are the important advantages of “Ratio Analysis”?
- What is “Funds Flow Statement”? What purpose does “Funds Flow Statement” serve?
- From the following information given on 31st March 2005, calculate “Funds from
Operations
- a) Profit on Sale of Building 35,000
- b) Goodwill appearing in the books 1,80,000,out of that 10% has been written off
during the year.
- c) Rs.1,25,000 has been transferred to general Reserve.
- d) Old furniture worth Rs 8,000 has been sold for Rs 6,500 during the year.
- e) Depreciation provided during the year on Machinery at 20%, the cost of machinery in
the books Rs 6,50,000.
- f) Net profit for the year amounted to Rs 6,50,000.
- From the following information calculate:
- a) Mix Variance
- b) Revised usage Variance
- c) Usage Variance
STANDARD ACTUAL
Material A 60units @Rs 5 per unit Material A 80units @Rs 4 per unit
Material B 40units @Rs 10per unit Material B 40units @Rs 12perunit
—– —–
100units 120units
- Calculate Current Assets from the following information:
- a) Sales (all credit) 2,00,000
- b) Gross Profit Ratio 20%
- c) Stock Turnover 5 times.
- d) Current Liabilities 60,000.
- e) Quick Ratio – 0.75
Stock at the end is Rs 5,000 more than the stock in the beginning.
- From the following particulars calculate :
- a) Number of units to be sold to earn a profit of Rs 1,20,000.
- b) Sales to earn a profit of Rs 1,20,000.
Selling price per unit Rs. 40
Variable selling cost per unit Rs. 3
Variable manufacturing cost per unit Rs. 22
Fixed factory overheads Rs. 1,60,000
Fixed selling cost Rs. 20,000
- The Sales manager of a manufacturing Co. reports that he is expecting to sell 40,000
units of a particular product. Production Department gives the following figures:
Two kinds of materials A and B are required for the manufacturing of the product.
The production requires 3units of Material A and 2 units of Material B.
Estimated Opening Balances:
Finished Product 10,000units
Material A 12,000units
Material B 15,000units
Desirable closing stock:
Finished Product 10,000units
Material A 14,000units
Material B 15,000units
Draw up a materials purchase budget.
PART – C
Answer any TWO questions: (2X20-40marks)
- The following is the summarized Balance Sheet of Good Luck Ltd for the year 2003 &
2004.
Liabilities 2003 2004 Assets 2003 2004
Equity share 2,00,000 2,40,000 Land &Building 1,05,000 1,50,000
Capital
8%Debentures 50,000 – Plant %Machinery 2,90,000 3,20,000
(at cost)
Share Premium — 10,000 Furniture @ cost 9,000 10,000
Gen Reserve 30,000 50,000 Inventories 1,30,000 1,05,000
P%L a/c 48,000 68,000 Sundry Debtors 75,000 85,000
Sundry
Creditors 1,30,000 1,50,000
Proposed Cash 15,000 26,000
Dividend 20,000 24,000
Provision for
Depreciation:
Plant&Machinery 1,40,000 1,50,000
Furniture 6,000 4,000
6,24,000 6,96,000 6,24,000 6,96,000
Additional Information:
- Furniture which cost Rs 5,000, written down value Rs 1,000. was sold during the year 2004 for Rs 2,000.
- Plant and Machinery which costs Rs 20,000 and in respect of which Rs 13,000 had been written off as depreciation was sold during the year 2004 for Rs 3,000.
- The Dividend of 2003 was paid during 2004.
- Prepare Funds Flow Statement.
- From the following information, you are required to construct a Balance Sheet. You are
required to show detailed workings.
Working Capital Rs. 75,000
Reserves and surplus Rs. 1,00,000
Bank overdraft Rs. 60,000
Current Ratio 1.75
Liquid Ratio 1.15
Fixed Assets to
Proprietors Fund 0.75
Long term Liabilities Nil
- The information regarding the composition and hourly wage rates of labour force
engaged in a job scheduled to be completed in 30 hours are as follows:
Category of workers Standard Actual
No. Of workers Hourly wage rate No.of workers Hourly wage rate
Per worker per worker
Skilled 75 6 70 7
Semi-skilled 45 4 30 5
Un-skilled 60 3 80 2
The work was completed in 32 hours .
Calculate labour Variances.
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