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Question Paper Code: CMB405
Time: 3 Hours
MBA III Semester End Examinations (Regular) - November, 2018
Regulation: R16
Stratgic Management Accounting
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(MBA)
Answer ONE Question from each Unit
All Questions Carry Equal Marks
All parts of the question must be answered in one place only
UNIT I
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Max Marks: 70
- (a) Limitations of Financial Accounting have made the Management realize the importance of Cost Accounting' Comment. [7M]
(b) PH Ltd. is a manufacturing company having three production departments, A, B and C and two service departments X and Y. The following is the budget for March 2004. [7M]
Total (Rs.) A (Rs.) B (Rs.) C (Rs.) X (Rs.) Y (Rs.) Direct Material 1000 2000 4000 2000 1000 Direct Wages 5000 2000 8000 1000 2000 Factory rent 4000 Power 2500 Depreciation 1000 Other overheads 9000 Additional information
A B C X Y Area (Sq.ft) 500 250 500 250 500 Capital value of assets (Rs. In lakhs) 20 40 20 10 10 Machine hours 1000 2000 4000 1000 1000 Horse power of machines 50 40 20 15 25 A technical assessment of the apportionment of expenses of service departments is as under:
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Required: A statement showing distribution of overheads to various departments. Also show the redistribution of service departments expenses to production departments. Use repeated distribution method.
Page 1 of 5
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| A % | B % | C % | X % | Y % | |
|---|---|---|---|---|---|
| Service Department X | 45 | 15 | 30 | - | 10 |
| Service Department Y | 60 | 35 | 5 | - | - |
- (a) Briefly explain different methods of costing. [7M]
(b) Compute Machine Hour Rate from the following: [7M]
i. Working hours for a month 160 hours
ii. Cost of machine Rs.12000
iii. Estimated scrap value Rs. 3000--- Content provided by FirstRanker.com ---
iv. Estimated working life of the machine 10000 hours
v. Repairs and maintenance per month Rs.120
vi. Standing charges per month Rs.40
vii. Power used 5 units per hour
viii. Power per unit 10 paise.
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UNIT II
- (a) The following extracts of costing information relate to commodity of X for the year ending 31.12.2013 [7M]
Rs. Purchase of Raw materials 6500 Direct wages 5000 Rent, Rates and Insurance 2000 Carriage inwards 100 Cost of Factory supervision 400 Sale of Finished Goods 15000 Stock(1.1.2013) Rs. Raw materials 1000 Finished Goods-200 units 800 Stock(31.12.2013) Rs. Raw materials 1100 Finished Goods-400 units
Advertising and selling cost is 40 paise per ton sold, 3000 tons of the commodity were sold during the year. Prepare a Cost sheet.
(b) What is fixed cost? What is its role in management decision making? [7M]
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- (a) What is Process costing? Explain the Advantages & Disadvantages of process costing. [7M]
(b) Rama industries Ltd., has three processes through which its products pass for becoming a finished product. There is a loss of 2% in each process on the total weight put in and 10% is scrap in all processes. The scrap realises Rs.5 per ton from process 1, Rs.7 per ton from process 2 and Rs. 10 per ton from process 3. The detailed information of various processes is as follows:
Prepare process cost accounts showing cost per ton at each process. [7M]Page 2 of 5
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| Particulars | Process 1 | Process 2 | Process 3 |
|---|---|---|---|
| Passed to next process | 60% | 50% | |
| Sent to warehouse for sale | 40% | 50% | 100% |
| Raw Materials | Rs. 150000 Tons 500 | Rs. 24480 Tons 136 | Rs. 7200 Tons 24 |
| Labour cost | 27500 | 20600 | 15000 |
| General expenses | 12500 | 9200 | 5075 |
UNIT - III
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- (a) Define break even analysis. Describe the advantages of break even analysis. [7M]
(b) Following information has been made available from the cost records of United Automobiles Ltd., manufacturing spare parts. [7M]
Per Unit Direct Materials X Rs.8
Y Rs.6Direct Wages X 24hours at 25 paise per hour
Y 16 hours at 25 paise per hourVariable overheads 150% of wages Fixed Overheads Rs.750 Selling price X Rs.25 --- Content provided by FirstRanker.com ---
Y Rs.20The directors want to be acquainted with the desirability of adopting any one of the following alternative sales mixes in the budget for the next period
- 250 units of X and 250 units of Y
- 400 units of Y only
- 400 units of X and 100 units of Y
- 150 units of X and 350 units of Y
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State which of the alternative sales mixes you would recommend to the management.
- (a) “Marginal costing is essentially a technique of cost analysis and cost presentation" Discuss the statement with reference to the merits and limitations of marginal costing. [7M]
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(b) The following are the data related to XYZ Co., [7M]
Normal capacity = 40000 units per month.
Variable cost per unit Rs.6
Actual production = 44000 units--- Content provided by FirstRanker.com ---
Sales =40000 units Rs. 15 per unit
Fixed manufacturing overheads= Rs.100000 per month or Rs. 2.50 per unit normal capacity.
Other fixed expenses = Rs. 240000 per month
Compute Net profit under absorption costing.
UNIT - IV
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- (a) Explain in detail the classification of budgets according to Functions and flexibility [7M]
(b) The expenses budget for production of 10000 units in a factory is given below: [7M]
Particulars Per unit Materials Rs.70 Labour Rs.25 Variable Overheads Rs.20 Fixed Overheads Rs. 10(Rs.100000 fixed) Direct Variable Expenses Rs.5 Selling Expenses Rs.13(10% fixed) Distribution Expenses Rs.7 (20% fixed) Administrative Expenses Rs.5 (Rs. 50000 fixed) Total Rs.155 Prepare a flexible budget for production of 6000 and 8000 units. Fixed Overheads and Administrative expenses are fixed for all levels of production.
- (a) Briefly discuss the advantages of Budgetary Control. [7M]
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(b) Pranav engineering company ltd. manufactures product Z. An estimated of the number of units expected to be sold in the first seven months of 2002 is given below: [7M]
Months Jan Feb march April may June July Sales (units) 600 800 1000 1200 1200 1000 1500 It is anticipated that, there will be no work-in progress at the of any month and finished units equal to half the anticipated sales for the next month will be in stock at the end of the each month (including December 2001). You are required to prepare a production budget showing the number of units to be manufactured each month from January to June 2002.
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UNIT - V
- (a) The standard material required manufacture one unit of product X is 10kgs and the standard price per kg of material is Rs. 25. He cost accounts records, however, reveal that 11,500kgs of material costing 2,76,000 were used for manufacturing 1,000units of product X. calculate material Cost variances, Material price variance and Material usage variance. [7M]
(b) Explain the different stages of standard costing system. [7M]
- (a) Form the following particulars, calculate all material variances. [7M]
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Material Standard Actual Qty in kg Price in Rs. Qty in kg Price in Rs. A 10 8 10 7 B 8 6 9 7 C 4 12 5 11 22 24
(b) Explain the features, merits and limitations of Standard Costing. [7M]Page 5 of 5
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