## Loyola College B.Com Corporate & Secretaryship April 2008 Management Accounts Question Paper PDF Download

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – CORPORATE SECRETARYSHIP

# GF 16

SIXTH SEMESTER – APRIL 2008

# BC 6600 / CR 6600 – MANAGEMENT ACCOUNTS

Date : 16/04/2008             Dept. No.                                        Max. : 100 Marks

Time : 9:00 – 12:00

# SECTION      A

Answer ALL questions                                                                                10 x 2=20

1. Define Management Accounting.
2. Distinguish between ‘fixed budget’ and ‘flexible budget’
3. Write a short note on Current Ratio
4. What is a ‘Funds Flow Statement’?
5. What is working capital?
6. Sales-Rs. 1,00,000, Profit-Rs. 10,000,Variable cost-70% of sales. Find out

P/V Ratio.

1. Standard time per unit 2 hrs, Standard rate per hour Rs. 3, Actual output 80 units,

Total Actual time taken 150 hours, Actual Rate per hour Rs. 3.50. Compute DLCV

(Direct Labour Cost Variance).

1. Calculate the Operating Profit Ratio from the following figures,

Sales-Rs. 70,000, Production expenses-Rs. 35,000, Administration expenses-Rs.

10,000,Interest expenses-Rs. 5,000,

1. A Company realized Rs. 20,000 from its debtors. The total current assets before

the realization was Rs. 3,00,000. What is the total of current asset after the realisation

from debtors.

10.Write the formula to calculate Stock Turnover ratio.

SECTION    B                                      5 x 8=40

Answer any FIVE questions.

1. Explain the uses and limitations of ratio analysis.
2. Explain any four applications of marginal costing in Managerial decision making.
3. What is Budget? Enumerate the advantages of budgetary control .
4. The sales director of a manufacturing company reports that next year he expects

to sell 50,000 units of a particular product.

The production manager consults the store keeper and casts his figures as follows:

Two kinds of raw materials, A and B are required for manufacturing the product.

Each unit of the product requires 2 units of A and 3 units of B. The estimated opening

Balances at the commencement of the next year are:

Finished Product    : 10,000 units,

Raw Material A     :  12,000 units, B – 15,000 units,

The desirable closing balances at the end of the next year are:

Finished product     : 14,000 units; A-13,000 units, B-16,000 units.

Draw up a Materials Purchase Budget for the next year.

1. The Sales Turnover and Profit during two years were as follows:

Year                           Sales                       Profit

Rs.                             Rs.

2006                      1,50,000                  20,000

2007                     1,70,000                   25,000

You are required to calculate: (i) P/V Ratio, (ii) Break-Even Point, (iii) The Sales

Required to earn a profit of Rs. 40,000, (iv) The profit made when sales are

Rs. 2,50,000

1. Item                        Budget                        Actual

Number of working days                          20                              22

Man hours per day                                 8,000                         8,400

Output per man-hour in units                     1                               1.2

Total Units of output                           1,60,000                     2,21,760

Standard overhead rate per-man hour Rs. 0.10

From the above information calculate: (i) Volume variance, (ii) Efficiency variance,

And (iii) Calender variance.

1. With the following data for a 60% activity, Prepare a flexible budget for production

At 80% and 100% activity.

Production at 60% activity     600 units

Materials                          Rs. 100 per unit

Labour                              Rs. 40 per unit

Expenses                           Rs. 10 per unit

Factory expenses Rs. 40,000(40% fixed)

Administration expenses Rs. 30,000(60% fixed)

1. You are required to calculate:
2. i) Debtor’s Turnover ratio, ii) Creditor’s Turnover ratio, iii) Stock Turnover ratio

The information available is as under:

Total Sales for the year    Rs. 1,00,000

Cash Sales for the year              20,000

Debtors                                      15,000

Bills Receivable                           5,000

Credit Purchases                     1,00,000

Creditors                                    25,000

Gross Profit                                50,000

Average stock                             10,000

SECTION    C                              2 x 20=40

Answer any TWO questions

1. From the following Balance Sheets of X Ltd. on 31-12-2005 and 2006 you are

required to prepare (a) A schedule of changes in working capital, (b) A Funds

Flow Statement.

Liabilities                     2005        2006          Assets                 2005                2006

Rs.           Rs.                                          Rs.                 Rs.

Share capital                1,00,000   1,00,000     Goodwill           12,000            12,000

General Reserve             14,000      18,000     Buildings           40,000            36,000

Profit & Loss A/c           16,000      13,000     Plant                   37,000            36,000

Sundry Creditors              8,000        5,400     Investments        10,000            11,000

Bills Payable                      1,600        1,400     Stock                  30,000            23,400

Provision for Taxation   16,000      18,000     Debtors               20,000           22,400

Cash                      6,600           15,200

1,55,600      155,800                            1,55,600        1,55,800

The additional information has also been given.

1. Depreciation charged on plant was Rs. 4,000 and on Building Rs. 4,000.
2. Provision for taxation of Rs. 19,000 was made during the year 2006
• Dividend of Rs. 8,000 was paid during the year 2006

1. A Company expects to have Rs. 37,500 cash in hand on 1st April,2008 and requires

You  to prepare a Cash Budget for the three months from April to June 2008.  The

following information is supplied to you.

Sales          Purchases           Wages          Office expenses

February           75,000            45,000              9,000              18,000

March               84,000            48,000              9,750              18,750

April                 90,000            52,500            10,500              20,250

May                1,20,000           60,000            13,500              23,820

June                1,35,000           60,000            14,250              28,000

Other information:

1. Period of credit allowed by suppliers – 2 months,
2. 20% of sales is for cash and period of credit allowed to customers for credit

Sales is one month

• Delay in payment of office expenses -1 month,
1. Income tax of Rs. 57,500 is due to be paid on June 15, 2008
2. The Company is to pay dividends to share holders of Rs. 37,500 in the month of April.

21 . The Standard cost of a chemical mixture is as under:

4 tons of Material X at Rs. 20 per ton,

6 tons of Material Y at Rs. 30 per ton,

Standard yield is 90% of input,

Actual Cost for a period is as under:

4.5 tons of material X at Rs. 15 per ton,

5.5 tons of material Y at Rs. 34 per ton ,

Actual Yield is 9.1 tons.

Compute (a) Material Price Variance, (b) Material Usage Variance,

(c) Material  Mix Variance, and (d) Material Yield Variance.

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## Loyola College B.Com Corporate & Secretaryship April 2009 Management Accounts Question Paper PDF Download

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – CORPORATE SECRETARYSHIP

 IR 16

SIXTH SEMESTER – April 2009

# BC 6600 – MANAGEMENT ACCOUNTS

Date & Time: 18/04/2009 / 9:00 – 12:00 Dept. No.                                                     Max. : 100 Marks

PART  A

Answer ALL questions:                                                                                  Marks: 10 x 2=20

Explain the following:

1. Margin of safety
2. Fund from operation
3. Gang composition variance
4. Earnings per share
5. Limiting factor
6. Zero base budget
7. Budgeted overheads Rs.50000

Budgeted  production  10000 units

Actual production 11000 units

Calculate overhead volume and expenditure variance

1. Sales Rs.1,00,000; margin of safety is 40% and PV ratio is 20%. Calculate Fixed cost.
2. Opening stock Rs.5000; closing stock Rs.9000; Purchases Rs.81,000.

Calculate Stock turnover ratio.

1. Current ratio is 2. State whether the current ratio will increase, decrease or remain unchanged in each of the following cases:
2. Creditors are paid out
3. Stock is purchased on credit
4. Cash collected from debtors
5. Stock purchased by issue of shares

PART B

Answer ANY FIVE questions                                                                                 Marks: 5×8=40

1. The following details relate to product ‘X’ for the month of March. You are required to compute the material and labour cost variances.

Standard cost per unit:

Material  50 kgs              at Rs.40 per kg

Labour                            400 hours        at Re.1 per hour

Actual cost for the month:

Material                          4,900 kgs         at Rs.42 per kg

Labour                            39,600 hours   at Rs.1.10 per hour

Actual production :       100 units.

1. A factory is currently working at 50% capacity and produced 10,000 units at a cost of Rs.180 per unit as per details below:

Material                                      Rs.100

Labour                                        Rs.30

Factory overheads                      Rs.30 (Rs.12 fixed)

Total                                           Rs.180

The current selling price is Rs.200 per unit. At 80% working,  material cost per unit increases by 5% and selling price per unit falls by 5%.

Estimate profit per unit and in total if it operates at 80% capacity.

1. A Ltd gives you the following data for the year 2006.

Units sold                           2400

Selling Price per unit          Rs.100

Direct material per unit    Rs.40

Direct labour per unit        Rs.20

Variable overheads           100% of labour

Fixed expenses                   Rs.20000

Calculate:

1. Break even sales in units
2. Profit of sales are 3000 units
3. Margin of safety in units

In the year 2007 the company expects the material price to reduce to Rs.35 per unit, but fixed expenses are expected to increase to Rs.30000. How many units should the company sell in 2007, if it expects the same profit it had earned in 2006.

1. A confectioner markets three products, all of which require sugar. His average monthly sales, cost of sales and sugar consumption are as follows:

Product X       Product Y       Product Z        Total

Sales revenue (Rs.)                     10,000             12,000             8,000              30,000

Cost of sales (Rs.)                      6,000               8,000               5,000               19,000

Sugar requirement                      500 kg             800 kg             200 kg             1,500 kgs

Due to government restrictions, his sugar quota has been reduced to 1405 kg. per month. Suggest  a suitable sales mix which would give the company maximum profit under the given circumstances.

1. X Ltd earned a net profit of Rs.2,30,000 for the year 2008 after considering the following:
2. Tax provided during the year Rs.25,000
3. ii) 25,000 have been transferred to the general reserve fund

iii)   Depreciation has been provided during the year on machinery and furniture at 20% whose

total cost is Rs.1,30,000.

1. iv) Old machinery worth Rs.16,000 has been sold for Rs.13,000 during the year.
2. v) Goodwill appears in the books at Rs.3,60,000 out of that 10% has been written off during the

year.

1. vi) Gain on sale of building Rs.71,000.

vii) Transfer fees Rs.12,000.

viii) Refund of income tax Rs.8,000.

Calculate fund from operations.

1. From the following information, calculate:
2. Operating ratio
3. Operating profit ratio
• Interest coverage ratio
1. Earnings per share.

Sales Rs.6,00,000; Cost of goods sold Rs.4,00,000; Operating expenses Rs.1,20,000; Non-operating income Rs.12,000, Interest on debentures Rs.8,000, Provision for tax RS.20,000 and Non-operating expenses Rs.4,000.

Equity capital 10,000 shares of Rs.10 each.

1. State the merits and limitations of Ratio Analysis.

1. Define Budgetary control. State the steps involved in Budgetary control.

PART C

Answer ANY TWO questions                                                                                 Marks: 2×20=40

1. From the following particulars, prepare a Balance Sheet as on 31st December 2008:
2. Current ratio 5
3. Acid test ratio 5

iii) Fixed assets to capital employed       0.375

1. iv) Working capital 90,000
2. v) Bank overdraft 15,000
3. vi) Shareholders fund to long term debt 2:1

vii) Reserves to share capital                   1:3

(Capital employed = shareholders’ funds + long term debt).

1. The Balance Sheet of ABC Ltd on 31/12/2004 and 31/12/2005 are as follows:

2004                2005                                        2004                 2005

Equity Capital (Rs.10)   100,000           200,000           Machinery       120,000           260,000

P/L A/c                              30,000            50,000               Furniture       30,000              40,000

12% Debenture                 50,000          150,000           Stock                50,000              40,000

10% ICICI bank loan       50,000                                  Debtors             30,000              60,000

Creditors                                       20,000             25,000          Cash                  10,000                 5,000

Tax provision                   40,000            60,000          Bank                  50,000               80,000

290,000          485,000                                  290,000             485,000

(a) Machinery worth Rs.50,000 were purchased and paid for by the issue of equity shares.

(b) Depreciation provided on machinery Rs.30000 and on furniture Rs.5000.

(c) During the year 2005, Income tax Rs.50,000 and interim dividend Rs.8,000 were paid.

(d) Machine whose Book value is Rs.8,000 is sold for Rs.5,000

Prepare Fund Flow statement.

1. X Ltd., gives you the following budgeted data from which you are required to prepare a cash     budget for the three months ending June 2008.

Month                        Sales(Rs)         Purchases(Rs)  Wages(Rs)       Production Overheads(Rs)

February               1, 60,000         80,000           20,000             10,000

March                   1, 70,000         60,000           25,000             12,000

April                     1, 90,000       1,00,000          30,000             15,000

May                       2,00,000       1,50,000          30,000             14,000

June                       1,60,000          80,000          20,000             10,000

1. 50% of the sales are for cash. Credit sales are collected as follows: 50% in the month following the sale, 40% in the next month following and 10% are bad debts.
2. Suppliers allow 1 month credit.
3. c) Lag in payment of wages 1 month.
4. d) Production overheads are payable in the same month and include Rs.1,000 p.m. as

depreciation.

e)Fixed deposit of Rs.20,000 along with interest Rs.2000 will mature for payment in the month of

April.

1. f) Advance income tax Rs.30,000 is payable in the month of March and September.
2. g) A computer costing Rs.40,000 is to be purchased in June, on a down payment of Rs.10,000 and

four equal monthly instalments of Rs.10,000 each, payable at the end of each month.

1. h) Sales commission of 5% on sales is payable in the month following the sales.
2. i) Budgeted cash balance on 1st April 2008 Rs.10,000/-

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## Loyola College B.Com April 2007 Management Accounts Question Paper PDF Download

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – COMMERCE

 TH 24

SIXTH SEMESTER – APRIL 2007

# CO 6605 – MANAGEMENT ACCOUNTS

Date & Time: 18/04/2007 / 9:00 – 12:00      Dept. No.                                                       Max. : 100 Marks

SECTION – A

1. Answer all the questions: 10 x 2 = 20 Marks
1. What are Financial Statements?
2. Bring out the significance of Turnover ratios.
3. Mention any four limitations of funds flow statement.
4. Define Marginal cost.
5. What is a Master Budget?
6. Find out the semi variable cost for 40,000 units.  Semi variable cost for 30,000 units: Rs.15,000, which is 40% fixed and 60% variable?
7. Calculate funds from operation from the following particulars:
• Net profit for the year ended 31.3.2007: Rs.6,50,000
• Profit on sale of building: Rs.40,000
• Goodwill written off during the year Rs.10,000
• Old machinery worth Rs.8,000 has been sold for Rs.6,500
• Depreciation has been provided on plant at 20% per year. The value of plant is Rs.5,00,000
1. The fixed cost per month in a factory is Rs.50,000.  The contribution per unit is Rs.50 for product A and Rs.25 for B.  Which of the following product mixes is most yielding?

(a)  800 A and 1000 B                         (b) 1,500 A only

(c) 3,000 B only                                 (d) 1,200 A and 400 B

1. 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

1. From the following data, calculate labour cost and rate variances for the two departments:

# Dept. ADept. B

Actual direct wages                                          Rs.80,000        Rs.72,000

Standard hours produced                                      10,000               8,000

Standard rate per hour                                     Rs.8                 Rs.10

Actual hours worked                                            12,000               7,000

## SECTION – B

1. Answer any FIVE questions only: 5 x 8 = 40 Marks

1. “Marginal costing is a valuable aid for managerial decisions” – Discuss.
2. Highlight the advantages and limitations of Management accounting.
3. Distinguish between standard costing and budgetary control.
4. Following are the ratios relating to the trading activities of Neela Traders Ltd., Chennai.

Receivables turnover  –  90 days (360 days year)

Inventory turnover  – 3 times

Payables turnover  –  3 months

Gross profit ratio  –  25%

Gross profit for the year amounted to Rs.18,000.  Closing inventory of the year is Rs.2,000 above the opening inventory.  Bills receivable amount to Rs.2,500 and bills payable Rs.1,000.  Ascertain the following:

• Sales (b) Debtors (c) Closing inventory (d) Sundry creditors

15.Following are the comparative balance sheets of Cheran Company Limited

Liabilities                    31.12.2005  31.12.2006         Assets                 31.12.2005  31.12.06

Share capital                70,000             74,000             Bank                         9,000         —

Debentures                  12,000               6,000             A/cs. Receivable     14,900     17,700

A/cs. Payable              10,360             11,840             Stock in trade          49,200     42,700

Pro. Fr. Doubtful debts     700               800               Buildings                 20,000     40,600

P & L A/c                       10,040          10,560             Goodwill                 10,000       5,000

Bank overdraft                  —                2,800

————————-                                              ———————

1,03,100      1,06,000                                          1,03,100  1,06,000

• Buildings were acquired for Rs.20,600
• Amount provided for amortization of goodwill totaled Rs.5,000
• Dividend paid totaled Rs.3,500
• Debenture loan repaid was Rs.6,000

Explain how the overdraft of Rs.2,800 as on 31st Dec. 2006 has arisen.

16.The following are the operating details of two plants operating under the same management:

Particulars                                                                   Plant A                        Plant B

Sales                                                                                        10,00,000                 8,00,000

Variable cost                                                                             6,00,000                 5.00,000

Fixed cost                                                                                 2,00,000                 1,00,000

Capacity of operation                                                                   100%                       50%

You are required to ascertain:

• Break even sales and break even capacity of the merged plant
• Profit and Profitability of operating the merged plant at 90% of the capacity
• Capacity level of operation, if profit of Rs.4,00,000 (the profit made by both plants before merger) has to be made by  the merged plant.

1. Fixed Expenses                                           Rs. (lakhs)            Rs. (lakhs)

Wages                                                                         16.8

Rent, taxes, etc.                                                          11.2

Depreciation                                                                14.0

——-                           59.8

Semi Variable expenses (50% capacity)

Repair and maintenance                                                5.0

Indirect labour                                                                        19.8

Sales Dept. salaries                                                       5.8

Sundry administration expenses                                   5.2

——-                           35.8

Variable expenses (at 50% capacity)

Material                                                                       48.0

Labour                                                                         51.2

Other expenses                                                              7.6

——-                           106.8

Assume that fixed expenses remain constant at all levels, semi variable expenses remain constant between 40% and 65%, 10% increase between 65% and 85% and 20% increase between 85% and 100%.  Sales at various levels are as under:

Rs. (lakhs)

60% capacity                          200

75% capacity                          240

90% capacity                          300

100% capacity                         340

Prepare a flexible budget for the half-year and forecast profits at 60%, 75%, 90% and 100% capacity.

1. 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

——-                          ——-

• 850

Loss 15%                15                                           —

——–                          ——-

• 850

———                        ——–

(ii) Actual results for January 2007:

Material           Quantity          Rate     Amount

Units             Rs.         Rs.

A                           400               11        4,400

B                           200                 6        1,200

——-                          ——-

• 5,600

Loss 10%                60                               —

——–                        ——–

• 5,600

——-                        ——–

Calculate: (1) Material price variance (2) Material mix variance (3) Material usage variance (4) Material yield variance (5) Material cost variance

### III. Answer any TWO questions only:                                                2 x 20 = 40 Marks

1. You are given the following information pertaining to the financial statements of Premsai Ltd., as on 31.12.2006. On the basis of the information supplied, you are required to prepare the Trading and Profit and Loss Account for the year and a Balance Sheet as on that date:

Net current assets                                            Rs.2,00,000

Issued share capital                                         Rs.6,00,000

Current ratio                                                    1.8

Quick ratio                                                      1.35

Fixed assets to shareholders equity                80%

Rate of gross profit                                         25%

Net profit to issued share capital                    20%

Stock turnover ratio (cost of goods

Goods sold to closing stock)                          5 times

Average age of outstanding debts

For the year                                                   36 ½ days

1. Prepare a funds flow statement from the following Balance Sheets of PRR as at 31st March 2006 and 2007

Liabilities             2006         2007                        Asset                  2006         2007

Share capital                4,50,000  4,50,000                  Fixed Assets        4,00,000   3,20,000

General Reserve          3,00,000  3,10,000                  Investments             50,000     60,000

P & L Account               56,000     68,000                  Stock                    2,40,000   2,10,000

Creditors                     1,68,000  1,34,000                  Sundry Debtors    2,10,000  4,55,000

Mortgage Loan                —       2,70,000                  Bank                     1,49,000  1,97,000

Pro. For Taxation          75,000      10,000

———————–                                               ————————

10,49,000 12,42,000                                            10,49,000 12,42,000

• Investments costing Rs.8,000 were sold during the year for Rs.8,500 and further investments were purchased during the year for Rs.18,000
• The net profit for the year was Rs.62,000 after charging depreciation on fixed assets Rs.70,000 for the year and provision for taxation Rs.10,000
• During the year part of fixed assets costing Rs.10,000 was disposed for Rs.12,000 and the profit was included in the P&L A/c.
• Dividend paid during the year amounted to Rs.40,000

1. A newly started Pushpak Company wishes to prepare cash budget from January. Prepare a cash budget for the 6 months from the following estimated revenue and expenses:
 Month Total Sales Materials Wages Production Overhead Selling & Distribution Overhead January February March April May June 20,000 22,000 24,000 26,000 28,000 30,000 20,000 14,000 14,000 12,000 12,000 16,000 4,000 4,400 4,600 4,600 4,800 4,800 3,200 3,300 3,300 3,400 3,500 3,600 800 900 800 900 900 1,000

Cash balance on 1st January was Rs.10,000.  A new machine is to be installed at Rs.30,000 on credit, to be repaid by two equal installments in March and April.

Sales commission at 5% on total sales is to be paid within the month following actual sales.

Rs.10,000 being the amount of 2nd call may be received in March.  Share premium amounting to Rs.2,000 is also obtained with 2nd call.

Period of credit allowed by suppliers – 2 months

Period of credit allowed to customers – 1 month

Delay in payment of overheads – 1 month

Delay in payment of wages – ½ month

Assume cash sales to be 50% of the total sales

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## Loyola College B.Com April 2008 Management Accounts Question Paper PDF Download

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – COMMERCE

# RO 32

SIXTH SEMESTER – APRIL 2008

# CO 6605 – MANAGEMENT ACCOUNTS

Date : 21/04/2008                Dept. No.                                        Max. : 100 Marks

Time : 9:00 – 12:00

SECTION A

1. Answer ALL questions (10×2=20 marks)
1. What are cash and cash equivalents?
2. What are Funds?
3. What is margin of safety?
4. What is Key Factor?
5. What are some of the important liquidity Ratios?
6. Current Ratio = 2.8

Acid Test Ratio = 1.5

Working Capital = Rs. 1,62,000

Find out          a) Current Assets

1. b) Current Liabilities
2. c) Liquid Assets
1. Sales Rs. 1,20,000

Gross profit ratio Rs.25/-

Opening stock is Rs. 10,000/- more than closing stock.

Calculate purchases.

1. From the following information find out the amount of Profit using Marginal Costing Technique.

Fixed Costs     Rs. 2,50,000

Variable Costs Rs. 10 per unit

Selling Price    Rs.15 per unit

Output Level   Rs. 75,000 units

1. From the following information calculate:
1. Material Cost Variance
2. Material Price Variance
3. Material Usage Variance

Standard Output         1 unit

Standard Material per unit      3 kg

Standard Price per kg Rs. 2/-

Actual output  80 units

Actual prices Rs.2.50 per kg.

Actual Materials used 250 kgs

1.  Calcualte the Pay-out ratio and the Retained Earnings ratio

From the following data;

Number of Equity Shares       3000

Dividend for Equity Share     Rs. 0.40

Net Profit before tax               Rs. 10,000

Provision for tax                     Rs. 5,000

Preference Dividend               Rs. 2,000

# SECTION B

1. Answer any FIVE questions: (5×8=40 marks)
1. State some of the important objectives of Management Accounting.
2. Bring out the important differences between Funds Flow Statement and cash flow statement.
3. What are the limitations of ratio analysis?
4. Ms R&Co supplies the following information for the year ending 31st Dec 2007.

Credit Sales                 Rs. 1,50,000

Cash Sales                   Rs. 2,50,000

Returns Inwards         Rs.   25,000

Opening Stock                        Rs.  25,000

Closing Stock              Rs. 35,000

Calculate

1. Inventory turnover when the Gross Profit Ratio is 20%.
2. Stock Velocity
1. Draw up a flexible budget for production at 75% and 100% capacity from the following data given for 50% activity.

Particulars                                           Per unit

Rs.

Materials                                             100

Labour                                                   50

Variable Expenses (Direct)                   10

Administrative Expenses (50% fixed) 40,000

Selling and distribution expenses (60% fixed) – 50,000

Present production (50% activity)      – 1,000 units

1. Sale of a product amounts to 200 units per month at Rs.10 per unit. Fixed overhead cost is Rs.400 per month and the variable cost is Rs.6 per unit.

The company proposes to reduce selling price by 10%. Calculate present and future P/V ratio. How many units must be sold to earn the present total profits?

1.  From the following information prepare a cash budget for the months of January to April.

Months            Expected Sales            Months            Expected purchases

January            60,000                         January            48,000

February          40,000                         February          80,000

March              45,000                         March`             81,000

April                40,000                         April                90,000

Wages to be paid to workers amounted to Rs. 5,000 each month.

Balance at the Bank as on 1st January was Rs. 8,000.

The following decisions were taken to be implemented by the management in the future.

1. In case of deficit of funds within the limit of Rs. 10,000, arrangements can be made with the bank.
2. In case of deficit of funds exceeding Rs. 10,000 but within a limit of Rs. 42,000 issue of debentures is to be preferred.
3. In case of deficit of funds exceeding Rs. 42,000, issue of shares is preferred.
1.  In a Factory, the Standard Mix consists of 60kgs of X and 40kgs of Y. The standard Loss of production is 30%. The standard price of X is Rs.5 per kg and Y is Rs.10 per kg.

The actual Mix and Yield are as follows:

X-80kgs at Rs. 4.50 per kg

Y-70kgs at Rs.8.00 per kg

Actual yield    = 115kgs

Calculate Material Variances.

# SECTION C

III. Answer any TWO questions:                                                    (2×20=40 marks)

1. You are given the following information pertaining to the financial statements of Premsai Ltd., as on 31.12.2006. On the basis of the information supplied, you are required to prepare the Trading and Profit and Loss Account for the year and a Balance Sheet as on that date:

Net current assets                                Rs. 2,00,000

Issued share capital                             Rs. 6,00,000

Current ratio                                        1.8

Quick ratio                                          1.35

Fixed assets to shareholders equity    80%

Rate of gross profit                             25%

Net profit to issued share capital        20%

Stock turnover ratio (cost of goods

Goods sold to closing stock)          5 times

Average age to outstanding debts

For the year                                    36 \ days

1. The following is the Balance Sheet for the year 2004-2005
 2004 2005 2004 2005 Share Capital 4,00,000 6,00,000 Building 5,70,000 5,00,000 Share Premium 1,00,000 1,10,000 Plant & Machinery 3,60,000 3,51,000 General Reserve 3,00,000 3,30,000 Furniture 90,000 81,000 Debentures 3,00,000 2,90,000 Cash in Hand 5,000 8,000 Provision for Taxation 40,000 35,000 Debtors Stock 1,80,000 1,55,000 1,60,000 1,45,000 Secured Loans 2,00,000 1,00,000 Bills Receivable 4,000 40,000 Current Liabilities 24,000 30,000 Long term Investments 2,10,000 13,64,000 14,95,000 13,64,000 14,95,000

1. During the year 2005 the Company paid 12% Dividend on Equity Share Capital of Rs. 4,00,000
2. The shares of Rs.100 each fully paid
3. Tax paid Rs. 30,000
4. Building worth Rs. 70,000 was sold for Rs. 60,000, new construction of Building for the year Rs. 25,000.
5. Machinery purchased for cash Rs. 40,000
6. Machinery having a book value of Rs. 10,000 was sold for Rs. 20,000.

Prepare Funds Flow Statement.

1. The following particulars are extracted from the records of a company.
 Particulars Product A Product B Sales (per unit) Rs. 100 Rs. 120 Consumption of Material 2 kg 3kg Material Cost Rs. 10/- Rs. 15/- Direct Wages Cost Rs. 15 Rs. 10 Direct Expenses Rs. 5 Rs. 6 Machine hours used 3 2

Fixed                           5                                  10

Variable                       15                                20

Direct wage per hour is Rs.5. Comment on the profitability of each product (both use the same raw material) when:

• Total sales potential in units is limited
• Production capacity (in term of machine hours) is the limiting factor.
• Materials is in short supply.
• Sales potential in value is limited
• Assuming the firm has only 3,500kgs of raw material and the maximum sales potential of each of the products A and B is 1,000 units, Calculate the most profitable sales mix and the profit for that sales mix assuming that the total fixed cost is Rs. 40,000.

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## Loyola College B.Com April 2009 Management Accounts Question Paper PDF Download

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – COMMERCE

 KP 33

SIXTH SEMESTER – April 2009

# CO 6605 – MANAGEMENT ACCOUNTS

Date & Time: 21/04/2009 / 9:00 – 12:00  Dept. No.                                                  Max. : 100 Marks

SECTION-A(2×10=20)

1. Answer all the questions:

1.What is fund from operation?

2.Explain stock turnover ratio

3.What is margin of safety

4.Distinguish fixed budget from flexible budget

5.Explain return on capital employed

6.Find out the quantity of raw material to be purchased from the  following details:

Opening stock of raw material 10,000 kgs.

Material expected to be consumed  20,000 kgs

Closing stock of raw material required 5,000 kgs

7.If inventory turnover ratio is 5 times, G.P ratio 20% and sales Rs. 10,00,000 find out the average stock

8.A plant purchased for Rs. 55.000 ( accumulated depreciation Rs. 23.000) was sold for Rs.44.000. The gain

on sale of plant was credited to P/L account, thus increasing the net profit to Rs. 1.62,000. Calculate fund

from operation.

9.Sales Rs.1,00,000. Profit Rs.10,000. Variable cost 70%.

Find out

1. P/V Ratio
2. Fixed Cost

10.The budgeted and actual sales of a concern are:

Budgeted sales 10.000 units at Rs.4 per unit

Actual sales       5,000 units at Rs.3.50 per unit

8,000 units at Rs.4.00 per unit

Calculate a). sales price variance          b) sales volume variance

SECTION –B (5×8=40)

1. Answer any FIVE questions only:

11.Distinguish Management Accounting from Financial Accounting

12.Explain the importance of Marginal costing in managerial decision making

13.What are the different classifications of budget?

14.Statement of financial position of Mr. Arun is given below:

Liabilities              2007                2008                            Assets                          2007                2008

Rs                    Rs                                                                    Rs                    Rs.

Accounts Payable    29,000     25,000                              Cash                            40,000             30,000

Capital                   7,39,000  6,15,000                              Debtor                         20,000             17,000

Stock                           8,000              13,000

Building                  1,00,000              80,000

Other fixed asset     6,00,000           5,00,000

7.68,000   6,40,000                                                             7,68,000           6,40,000

• there were no drawing
• there were no purchases or sale of building or other fixed assets.

Prepare a fund Flow Statement

15.A company shows the following results for two periods:

Year                Units               Total cost                    Sales

2003                10,000             Rs.80,000                    Rs.1,00,000

2004                12,000             Rs.90,000                    Rs.1,20,000

Find out the following:

• P/V Ratio
• BEP both in units and amount
• Fixed Cost
• Margin of safety in the year 2004

1. Debtor velocity 3 months

Creditor Velocity                    2 months

Stock velocity                         8 times

Bills payable                            Rs.4,000

Bills receivable                        Rs.10,000

Total sales                               Rs.2,40,000

The closing stock is Rs.2,000 more than the opening stock. .Gross profit on the above sales is Rs.40,000. There are no cash sales and cash purchases and the accounting year consists of 360 days. Find out

(a) Sundry debtor                          (b) Sundry creditors                (c) Closing stock

17.The standard mix for 100 units of product ‘X’ is

Material A                   6 Kg at Rs.15        90

Material B                   4 Kg at Rs.10        40

——-               ——-

10 Kg              Rs 130

——–              ———

During January, the actual consumption was as follows

Material A                63 kg at Rs.14                882

Material B                 39 kg at Rs.11               429

——-                           ———-

102 kg                       Rs.1,311

——–                         ———–

Actual output was 960 units. Calculate material variances

18.The monthly budgets for manufacturing overhead of a concern for two levels of activities were as follows:

Capacity                                        60%                 100%

Budgeted production (units)        600                  1,000

——————————–

Rs.                   Rs.

Wages                                           1,200               2,000

Consumable stores                           900               1,500

Maintenance                                  1,100               1,500

Power and fuel                              1,600               2,000

Depreciation                                  4,000               4,000

Insurance                                       1,000               1,000

————- ———

9,800             12,000

————-          ————

You are required :

• indicate which of the items are Fixed, Variable and Semi-Variable
• prepare a budget for 80% capacity

SECTION-C (2X20=40)

## Answer any TWO  questions

19.From the following Balance Sheets prepare a Fund Flow Statement

# Balance Sheets of A Ltd

—————————————————————————————————————————

Liabilities                    2006                2007                Assets              2006                2007

Rs                  Rs                                            Rs                    Rs

——————————————————————————————————————————

Share Capital                     6,00,000          7,00,000          Fixed Asset     8,00,000          9,50,000

General Reserve                2,00,000          2,50,000          Investments     1,80,000          1,80,000

Profit on sale of                                                                Stock               2,00,000          2,70,000

Investment                                         –                     10,000          Debtor             2,25,000          2,45,000

P/L A/c                              1,00,000          2,00,000          B/R                     40,000             65,000

7%Debenture                    3,00,000          2,00,000          Prepaid Expense 10,000            12,000

Creditors                           1,60,000          2,50,000          Discount on         15,000            10,000

B/P                                       10,000             12,000          debenture

Proposed dividend                           30,000             35,000

Provision for tax                  70,000             75,000

——————————————————————————————————————————                                                           14,70,000        17,32,000                                14,70,000        17,32,000

—————————————————————————————————————————-

Other information:

• During 2007 , Fixed asset ( Book value Rs.10,000 and depreciation written off Rs.30,000) were sold for Rs.8,000
• During 2007 investment costing Rs.80,000 were sold and new investment were bought for Rs.80,000
• Debenture were redeemed at a premium of 10%
• During 2007 income tax paid was Rs.55,000
• Provision for depreciation 31-12-2006 Rs.2,00,000 and on 31-12-2007 Rs.2,50,000

1. S. Ltd wishes to prepare a cash budget from January. Prepare a cash budget for the first 6 months from

the following estimated revenue   and expenditure.

Month                   Total sales       Materials         Wages             Production      Selling

Rs                    Rs                    Rs                    Rs                    Rs

Jan.                        40,000             40,000             8,000               6,400               1,600

February                44,000             28,000             8,800               6,600               1,800

March                    56,000             28,000             9,200               6,800               1,800

April                      72,000             44,000             9,200               7,000               2,000

May                       60,000             40,000             8,000               6,400               1,800

June                       80,000             50,000           10,000               7,200               2,400

Cash balance on 1 st Jan was Rs   20,000.

A new machine is to be installed at Rs  20,000 to be paid by two equal installments in March and April. Sales  commission at 5% on total sales to be paid within month following actual sales.

Rs  20,000 being the amount of share 2  nd call may be received in March.

Share premium amounting to Rs   4,000 is also obtainable with the 2 nd call.

Period of credit allowed by suppliers                   -2 months

Period of credit allowed to customers                  -1 month

Delay in payment of overheads                            -1 month

Delay in payment of wages                                  -1/2 month

Assume cash sales as 50% total sales

21.From the following figures and ratios, Draw up the Balance sheet and Trading account and Profit and Loss

Account

Share Capital               Rs 1,80,000

Working Capital          Rs    63,000

Bank overdraft            Rs    10,000

There is no fictitious asset. In current assets there is no assets other than stock, debtor and cash. Closing stock is 20% higher than the opening stock.

Current ratio                – 2.5

Proprietary ratio          – 0.7

Stock velocity             – 4 times

Net profit                    – 10%(to average capital employed)

Quick ratio                  – 1.5

Gross profit ratio         – 20% to sales

Debtor velocity           – 36.5 days

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## Loyola College B.A. Corporate & Secretaryship April 2007 Management Accounts Question Paper PDF Download

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034          B.A. DEGREE EXAMINATION – CORPORATE & SECRETARYSHIP

 HO 15

SIXTH SEMESTER – APRIL 2007

# CR 6600 – MANAGEMENT ACCOUNTS

Date & Time : 16-04-2007/9.00-12.00                Dept. No.                                                              Max. : 100 Marks

###### SECTION – A

Answer all the questions.                                                                                                               10 x 2 = 20

1. What is ratio analysis?
2. Define ‘Budget’.
3. A project costs Rs. 5,00,000 and yields annually a profit of Rs. 80,000 after depreciation at 12% p.a. but before tax at 50%. Calculate pay-back period.
4. Define Fund Flow Statement.
5. Calculate Net profit ratio. Sales Rs.3,50,000,                                Cost of goods sold Rs.1,50,000

Administrative expenses Rs.50,000                                 Selling expenses Rs. 10,000.

1. Define financial statements.
2. Write the ‘Principles’ for preparation of Working Capital Statement.
3. Define current asset.
1. Suresh and company supplies the following information regarding the year ended 31-12-2000. Cash sales Rs. 80,000; Credit sales Rs. 2,00,000’ Return inward Rs. 10,000; Opening stock Rs. 25,000; Closing stock Rs. 30,000; Gross profit ratio is 25%; Find out inventory turnover ratio.
1. What is the objective of ‘cash budget’?

### SECTION – B

Answer any FIVE questions.                                                                                                                           5 x 8 = 40

1. Johnson Ltd. has Rs. 80,000 to invest. It has two alternative proposals at hand for consideration. The alternatives are:
 Product X Rs. Product Y Rs. Investment outlay Cash inflows: Year 1 2 3 4 80,000   32,000 32,000 36,000 — 1,00,000 80,000   30,000 30,000 30,000 10,000 1,00,000

Required:

1. Which investment proposal would you recommend under pay-back method?
2. Would your decision be different if proposal Y has Rs. 40,000 in the third year instead of Rs. 30,000 inflow?
1. Calculate the Debtors turnover ratio from the following.

Rs.

Total sales for the year 1987                            1,00,000

Cash sales for the year 1987                                20,000

Debtors as on 1-1-1987                                         10,000

Debtors as on 31-12-1987                                    15,000

Bills receivable as on 1-1-1987                              7,500

Bills receivable as on 31-12-1987                       12,500

1. From the following information show the results of operations of manufacturing concern using trend percentages with 2004 as base year.

(amount in ‘000s)

 Particulars 2001 2002 2003 2004 Sales Cost of goods sold Gross profit Total selling expenses Net operating profit 1,300 728 572 120 452 1,200 696 504 110 394 950 589 361 97 264 1,000 600 400 100 300
1. Explain the characteristics of management accounting.
2. You are required to calculate the following:

(a) Working capital turnover             (b) Fixed assets turnover    (c) Capital turnover

The information available is as under:

Capital employed : Rs. 4,00,000      Current liabilities : Rs. 40,000           Current assets ; Rs. 2,00,000

Net fixed assets : Rs. 2,50,000         Sales: Rs. 5,00,000                              Cost of sales: Rs. 4,00,000

1. What are the advantages of ratio analysis?
2. Explain the most important techniques of analysis and interpretation of financial statements.
3. Calculate funds from operations from the following profit and loss Account:

# Dr                                                                                                                                                                    Cr

Particulars Rs. Particulars Rs.

# To Expenses paid

To Depreciation

To Loss on sale of Building

To Discount

To Goodwill

To Net profit

1,00,000

40,000

15,500

500

12,000

52,000

———–2,20,000

By Gross Profit

# By Gain on sale of machinery

2,00,000

20,000

———–

2,20,000

### SECTION – C

Answer any TWO questions.                                                                                           2 x 20 = 40

Liabilities 2000

Rs.

2001

Rs.

### Assets

2000

Rs.

2001

Rs.

Share capital

General reserve

P & L A/c

B ank Loan

Creditors

Provision for taxation

1,00,000

25,000

15,250

35,000

75,000

15,000

2,65,250

1,25,000

30,000

15,300

67,600

17,500

2,55,400

Building

Machinery

Stock

Debtors

Cash in hand

Cash at bank

Investment

1,00,000

75,000

50,000

40,000

250

2,65,250

95,000

85,500

37,000

31,100

300

4,000

2,500

2,55,400

(a) dividend of Rs. 11,000 was paid                                (b) Machinery was purchased for Rs. 15,000

(c) Income tax paid during the year Rs. 16,500.  Prepare Cash Flow Statement.

1. Using the information given below prepare a cash budget showing expected cash receipts and

disbursement for the month of May and balance expected at May – 31 – 1986. Budgeted cash balance

May    1, 1986 R. 60,000.

Sales:

March    Rs. 5,00,000

April       Rs.  3,00,000

May       Rs.  8,00,000

Half collected in the month of sales, 40% in the next month and 105 in the third month.

Purchases:

April       Rs.  2,50,000

May       Rs.  4,00,000

40% paid in the month of purchase and 605 paid in the next month.

Wages due in May for Rs. 88,000. 3 years insurance policy due in May for renewal Rs. 2,000 to be paid in cash. Other expenses for May, payable in May, Rs.44,000. Depreciation for the month of May Rs. 2000. Accrued  taxes for May payable in December Rs. 6,000. Fixed deposit receipts due May 15th Rs. 1,75,000 plus Rs. 10,000 interest.

1. The cost of an article at a capacity level of 5,000 units is given below:

Rs.

Material cost                                        25,000   (100% variable)

Labour cost                                          15,000   (100% variable)

Power                                                       1,250    (80% variable)

Repairs                                                   2,000    (75% variable)

Stores                                                       1,000    (100% variable)

Inspection                                                  500    (20% variable)

Depreciation                                         10,000    (100% variable)

Selling overheads                                  3,000    (25% variable)

———

62,750

———

Cost per unit Rs. 12.55

Find the unit cost of the product at production levels of 4,000 units and 6,000 units.

~~~ * ~~~

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