LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.B.A. DEGREE EXAMINATION – BUSINESS ADMINISTRATION
SIXTH SEMESTER – APRIL 2011
BU 6603/BU 6600 – MANAGEMENT ACCOUNTING
Date : 09-04-2011 Dept. No. Max. : 100 Marks
Time : 9:00 – 12:00
PART – A
ANSWER ALL THE QUESTIONS: (10 x 2 = 20 marks)
- What is Management Accounting?
- What is ratio analysis?
- What is Cash Budget?
- What is fund flow statement?
- What is contribution?
- Give the formula for Earnings Per Share.
- What is direct labour cost variance?
- Ganesh purchased and used 800 tons of a chemical at Rs. 40 per ton whereas the standard price fixed was Rs.48 per ton. Calculate material price variance.
- A company shows the trading results for two periods.
| Period | Sales
Rs. |
Profit
Rs. |
| 1 | 10,000 | 400 |
| 2 | 20,000 | 1,000 |
Calculate profit volume ratio.
- From the following information, calculate Fixed overhead
cost variance.
| Standard | Actual | |
| Production in units | 4,000 | 3,800 |
| Fixed overheads | Rs.40,000 | Rs.39,000 |
PART – B
ANSWER ANY FIVE QUESTIONS: (5 x 8 = 40 marks)
- Explain the functions of Management Accounting.
- You are required to prepare a production budget for the half year ending June 2000 from the following information:
| Product | Budgeted sales quantity | Actual stock on
31-12-99 |
Desired stock on
30-6-2000 |
| Units | Units | Units | |
| S | 20,000 | 4,000 | 5,000 |
| T | 50,000 | 6,000 | 10,000 |
- Find out fixed assets and gross profit from the following information:
Sales Rs. 10,00,000
Gross profit ratio 25%
Fixed assets turnover ratio (on cost of sales) 5 times.
- Find out the funds from operations from the details given below:
| Rs. | |
| Net profit for the year 2006-2007 | 95,000 |
| Depreciation charged on Fixed assets | 42,000 |
| Profit on Sale of Long term Investments included in the P&L A/C | 13,000 |
| Goodwill written off | 20,000 |
- You are asked to compile a working capital statement from the following details:
| Particulars | 1-1-1999
Rs. |
31-12-1999
Rs. |
| 8% Debentures | 40,000 | 40,000 |
| Outstanding rent | 8,000 | 12,000 |
| Cash in hand | 4,000 | 8,000 |
| Cash at bank | 12,000 | 15,000 |
| Accounts payable | 20,000 | 26,000 |
| Machinery | 25,000 | 16,000 |
| Accounts receivable | 30,000 | 34,000 |
| Prepaid commission | 4,000 | – |
| Inventories | 22,000 | 27,000 |
| Share premium | 15,000 | 15,000 |
| Equity share capital | 50,000 | 50,000 |
- What are the advantages of ratios?
- From the following information relating to Palani Bros. Ltd., you are required to find out
- P/V Ratio (b) Break even point (c) Profit (d) Margin of safety (e) Volume of sales to earn profit of Rs.6,000.
Rs.
Total fixed costs 4,500
Total variables costs 7,500
Total sales 15,000
- Calculate material cost variance, material price variance and material usage variance from the following data:
Standard Actual
Quantity 400 kgs 460 kgs
Price Rs.2 per kg Rs. 1.5 per kg
Value Rs. 800 Rs. 690
PART – C
ANSWER ANY TWO QUESTIONS: (2 x 20 = 40 marks)
- Kunal Products produces and sells a product for which total capacity of 2,000 units exists.
The following expenses are for the production of 1,000 units of the product which is sold at Rs. 130 per unit.
Per Unit
Rs.
Direct materials 20
Direct Wages 30
Administration overheads (constant) 20
Selling expenses (50% fixed) 10
Distribution expenses (25% fixed) 20
100
You are required to prepare a flexible budget for the production and sale of 1,200 units, 1,600
units and 2,000 units, showing clearly the marginal (variable) cost and total cost at each level.
- The following is the Comparative Balance Sheets of Pratima & Co.Ltd. as on 30th June 1987 and 30th June 1988.
Balance Sheet
| Liabilities | 30-6-1987
Rs. |
30-6-1988
Rs. |
Assets | 30-6-1987
Rs. |
30-6-1988
Rs. |
| Share capital | 1,80,000 | 2,00,000 | Goodwill | 24,000 | 20,000 |
| Reserve Fund | 28,000 | 36,000 | Buildings | 80,000 | 72,000 |
| P&L A/c | 39,000 | 24,000 | Machinery | 74,000 | 72,000 |
| Trade Creditors | 16,000 | 10,800 | Investments | 20,000 | 22,000 |
| Bank overdraft | 12,400 | 2,600 | Inventories | 60,000 | 50,800 |
| Provision for Taxation | 32,000 | 34,000 | Debtors | 40,000 | 44,400 |
| Provision for doubtful debts | 3,800 | 4,200 | Cash | 13,200 | 30,400 |
| 3,11,200 | 3,11,600 | 3,11,200 | 3,11,600 |
Additional Information:
- Depreciation charged on machinery Rs. 10,000 and on buildings Rs. 8,000.
- Investments sold during the year Rs. 3,000.
- 15,000 interim dividend paid during January 1988.
- Taxes paid during the year Rs. 30,000.
Prepare (a) a statement of changes in working capital.
(b) a funds flow statement.
- A company manufactures a particular product the standard material cost of which is Rs.10 per unit. The following information is obtained from the cost records.
- Standard mix
Material Quantity Rate Amount
Units Rs. Rs.
A 70 10 700
B 30 5 150
100 850
Loss 15% 15 —
85 850
- Actual results for January 1987:
Material Quantity Rate Amount
Units Rs. Rs.
A 400 11 4,400
B 200 6 1,200
600 5,600
Loss 10% 60 Nil
540 5,600
Calculate: (1) Material price variance (2) Material mix variance (3) Material usage variance (4) Material yield variance (5) Material cost variance.
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