Loyola College M.Com April 2007 Management Accounting Question Paper PDF Download

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

TH 48

M.Com. DEGREE EXAMINATION – COMMERCE

THIRD SEMESTER – APRIL 2007

CO 3806 / 3801 – MANAGEMENT ACCOUNTING

 

 

 

Date & Time: 28/04/2007 / 9:00 – 12:00      Dept. No.                                        Max. : 100 Marks

 

 

PART – A

 

Answer ALL questions                                                                      (10 x 2 = 20 marks)

 

  1. Explain the scope of Management Accounting?
  2. Distinguish between Management Accounting and Cost Accounting.
  3. Illustrate the uses of Cash flow statement.
  4. State the need for working capital.
  5. Discuss the advantages of Zero – base Budgeting.
  6. How do standard cost differ from estimated cost?
  7. Your are required to calculate BEP when Profit Rs.5,000 (20% sales) PV ratio is 50%.
  8. CR. 2.5, working capital Rs.63,000. Calculate current assets and current Liabilities.
  9. Calculate Sales value variance and sales price variance from the following particulars.

Product      Budget qty      Budget price p/u         Actual qty       Actual price p/u

A                 400                    30                                        500                        31

  1. Calculate cash from operations: Net profit for 2005 Rs.25,000 Depreciation Rs.1,000, Prepaid

expenses on   1.1.05 Rs.2,000,  Prepaid expenses on 31.12.05 Rs.1,000.    Outstanding  salary on

31.12.05 Rs.500.

PART – B

Answer any FIVE questions                                                                          (5 x 8 = 40 marks)

 

  1. Discuss the Managerial use of Fund Flow statement.
  2. “Ratio Analysis is a tool of management for measuring efficiency and guiding business

policies” Discuss.

 

  1. From the following details, calculate funds from operations.

 

Particulars Rs. Particulars Rs.
Salaries 5,000 Closing balance of P&L a/c 60,000
Discount on issue of debentures 2,000 Opening balance of P&L a/c 25,000
Provision for bad debts 1,000 Transfer to GR    1,000
Rent 3,000 Preliminary expenses written off    3,000
Refund of Tax 3,000 Goodwill written off    2,000
Profit on sale of building 5,000 Proposed dividend    6,000
Depreciation on plant 5,000 Dividend received    5,000
Provision for Tax 4,000
Loss on sale of plant 2,000

 

  1. The capital of Everest co ltd is as follows:

Rs.

9% Preference shares of Rs.10 each               3,00,000

Equity shares of Rs.10 each                            8,00,000

————

11,00,000

————

 

The accountant has ascertained the following information’s:

  1. a) Profit after Tax @ 60% Rs.2,70,000 b) Depreciation Rs.60,000 c) Equity dividend paid 20%   d) Reserves Rs.77,000  e) Market price per equity shares Rs.40.  Calculate  a) Dividend yield on equity shares   b) Cover for preference and equity dividends.  c) Earning per share
  2. d) The price earning ratio e) Dividend pay out ratio f) Book value per share.

 

  1. Assuming the cost structure and selling prices remain the same in periods I and II, Find

out  a) PV ratio  b) BEP sales   (c) Profit when sales are Rs.10,000   d) Sales required to

earn a   profit of Rs.20,000.

Period              Sales                Cost

 

I                       1,20,000          1,11,000

II                     1,40,000          1,27,000

 

  1. Draw a Material Procurement Budget from the following details estimated sales of a

product  40,000 units.  Each unit of the product requires 3 units of material A and 5 units

of material B.

 

Estimate opening balance Material on order
Finished product 5,000 uts
Material A 12,000 uts Material A 7,000 uts
Material B 20,000 uts Material B 11,000 uts
Estimate closing balance Materials of order
Finished product 7,000 uts ———
Material A 15,000 uts Material A 8,000 uts
Material B 25,000 uts Material B 10,000 uts

 

  1. The standard material and standard cost per kg of material required for the production of

one unit of product A is as follows.

Material – 5 kgs standard price Rs. 5 per kg.  The actual production and related material data

are as follows 400 units of product A, Materials used 22000 kgs Price of Material Rs.4.50 per kg.  Calculate  (a) Material cost Variance   b) Material usage variance   c) Material price variance.

 

  1. From the following data calculate labour variance standard time p.u 2.5 hrs. Actual hours

2,000 standard wages rate Rs. 2 per hour, Actual out put 1,000 uts.  Actual wages

Rs.4,500.   20% of actual time has been lost due to machinery break down.

 

 

 

 

 

 

 

 

 

PART – C

 

Answer any TWO questions                                                              (2 x 20 = 40 marks)

 

  1. With the help of the following ratios of Edward Ltd draw balance sheet.

Current Ratio 2.5, Liquid Ratio 1.5, Networking capital Rs.3,00,000, stock turnover ratio: 6

times, Gross profit  Ratio 20% Debit collection period 2 months.  Fixed asset Turnover

Ratio: 2 times fixed asset to share holders noteworthy : 0.80

Reserve and surplus to capital  0.50.

Hint: Turn over refers to cost of sales

 

  1. The summaries Balance sheet of kumar Ltd as on 31.3.05 and 31.3.06 are as follows

 

Liabilities 31.03.05 31.03.06 Assets 31.03.05 31.03.06
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 a/c    56,000    68,000 Stock 2,40,000 2,10,000
Creditors 1,68,000 1,34,000 Debtors 2,10,000 4,55,000
Tax provision    75,000    10,000 Bank 1,49,000 1,97,000
Mortgage Loan 2,70,000
10,49,000 12,42,000 10,49,000 12,42,000

 

Additional information a) Investments castings Rs. 8,000 were sold for Rs.8,500  b) Tax provision made during the year was Rs.9,000. c) During the year part of the fixed assets costing Rs.10,000 was sold for Rs.12,000 and the profit was including in P&L a/c.  You are required to prepare cash flow statement for the year ended 31.03.2006.

 

  1. The following particulars are taken form the record of a company engaged in manufacturing two products X and Y for a certain raw material

 

Particulars Product X Product Y
Sales 125.00 250.00
Material cost (Rs.2.50 per kg) 25.00 62.50
Wages m(Rs. 15 per hour) 37.50 75.00
Variable over head 12.50 25.00

 

Total fixed over head Rs.50,000.  Comment oh the profitability of each product when

  1. Total availability of raw material is 20,000 kgs and maximum sales potential of each product is 1,000 units Find out the product mix to yield maximum profit.
  2. Total sales value of limited
  3. Labour Time is limited

Production capacity in units is a key factor.

 

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