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)
- What are the tools of management accounting?
- Give the meaning of the term: Window Dressing.
- State two reasons for preparing cash budget.
- What is the significance of liquidity ratios?
- Why Net Working Capital is computed?
- What is margin of safety?
- Calculate P/v ratio given that sale is Rs. 30,000 and fixed cost Rs. 15,000, contribution- Rs.12,000.
- 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.
- Calculate the Material Usage variance.
STANDARD |
ACTUAL |
||
5 Kg. per unit | Rs5 per Kg | 400 units are produced | 2200 Kg consumed |
- What is FFO?
PART – B
ANSWER ANY FIVE QUESTIONS: (5X8=40 Marks)
- Discuss the importance of budgeting.
- What are the uses of marginal costing as a tool for managerial decision making?
- How Fund Flow Statement is different from a Balance Sheet?
- 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.
- 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.
- 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 |
- 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.
- 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)
- 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 1st 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 15th June
- Income from Investments: Rs.5, 000 to be received in April, July.
- The following information is available from the records of AERO COOL Ltd. Prepare a Profit and loss account and the Balance sheet as on 31st
- 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%
- 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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