Download GTU (Gujarat Technological University) MBA (Master of Business Administration) 2015 Winter 2nd Sem 2820001 Cost And Management Accounting Cma Previous Question Paper
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER 02? ? EXAMINATION ? WINTER 2015
Subject Code: 2820001 Date: 30/12/2015
Subject Name: COST AND MANAGEMENT ACCOUNTING (CMA)
Time: 02.30 PM TO 05.30 PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1 (a) From the four alternative answers given against each of the following cases,
indicate the correct answer: (just state A, B, C or D)
06
1. Increase in total variable cost is due to:
A. Increase in production B. Increase in fixed cost
C. Increase in sales D. None of the above
2. Cycle manufacturing organization uses the Costing Method:
A. Unit Costing B. Batch Costing
C. Multiple Costing D. Job Costing
3. Director?s remuneration and expenses form a part of:
A. Production overhead B. Administration overhead
C. Selling overhead D. Distribution overhead
4. The costing system applicable to oil refining industry is:
A. Process costing B. Unit costing
C. Joint products & by products D. Job costing
5. For shoe manufacturer, the most suitable cost system is:
A. Job costing B. Contract costing
C. Batch costing D. None of the above
6. Service costing is not used in one of the following:
A. Electricity B. Transport
C. Hospitals D. Electronics
Q.1 (b) Explain the following terms with practical example:
i) Cost Unit
ii) Cost Reduction
iii) Marginal Cost
iv) Margin of Safety
04
Q.1 (c) Discuss in brief advantages and limitations of marginal costing. 04
Q.2 (a) Explain Normal Loss, Abnormal Loss and Abnormal Gain with an example
under process costing.
07
Q.2 (b)
Ruchit Manufacturing Company produces two products, furnishes the following
data for the year 2011:
Products Annual Output
Units
Total Machine
Hours
Total No. of
purchase orders
Total no. of
set-ups
A
B
5,000
60,000
20,000
1,20,000
160
384
20
44
07
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1
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER 02? ? EXAMINATION ? WINTER 2015
Subject Code: 2820001 Date: 30/12/2015
Subject Name: COST AND MANAGEMENT ACCOUNTING (CMA)
Time: 02.30 PM TO 05.30 PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1 (a) From the four alternative answers given against each of the following cases,
indicate the correct answer: (just state A, B, C or D)
06
1. Increase in total variable cost is due to:
A. Increase in production B. Increase in fixed cost
C. Increase in sales D. None of the above
2. Cycle manufacturing organization uses the Costing Method:
A. Unit Costing B. Batch Costing
C. Multiple Costing D. Job Costing
3. Director?s remuneration and expenses form a part of:
A. Production overhead B. Administration overhead
C. Selling overhead D. Distribution overhead
4. The costing system applicable to oil refining industry is:
A. Process costing B. Unit costing
C. Joint products & by products D. Job costing
5. For shoe manufacturer, the most suitable cost system is:
A. Job costing B. Contract costing
C. Batch costing D. None of the above
6. Service costing is not used in one of the following:
A. Electricity B. Transport
C. Hospitals D. Electronics
Q.1 (b) Explain the following terms with practical example:
i) Cost Unit
ii) Cost Reduction
iii) Marginal Cost
iv) Margin of Safety
04
Q.1 (c) Discuss in brief advantages and limitations of marginal costing. 04
Q.2 (a) Explain Normal Loss, Abnormal Loss and Abnormal Gain with an example
under process costing.
07
Q.2 (b)
Ruchit Manufacturing Company produces two products, furnishes the following
data for the year 2011:
Products Annual Output
Units
Total Machine
Hours
Total No. of
purchase orders
Total no. of
set-ups
A
B
5,000
60,000
20,000
1,20,000
160
384
20
44
07
2
The annual overheads are as under: Rs.
Machine related activity costs 5.50,000
Set-up related costs 8,20,000
Purchase related costs 6,18,000
You are required to calculate the production overhead rate for absorption of
overheads per unit under:
(a) Traditional approach, using machine hour rate to absorb overheads
(b) Activity based costing approach
OR
Q.2 (b)
Following particulars have been extracted from Rohan Ltd. for the year 2012:
Rs.
Cost of Materials consumed
Wages
Factory Overheads
Administration charges
Selling charges
Distribution charges
Profit
6,00,000
5,00,000
3,00,000
3,36,000
2,24,000
1,40,000
4,20,000
A work order has to be executed in 2013 and the estimated expenses are:
Materials Rs. 16,000 Wages Rs. 10,000
Assuming that in 2013 the rate of factory overheads has gone up by 20%, distribution
charges have gone down by 10% and Selling and administration charges have each gone up
by 15% at what price should the ordered product be sold so as to earn the same rate of profit
as in 2012?
Factory overheads are based on wages and Administration, Selling and Distribution
overheads on factory cost.
07
Q.3 (a) Discuss in brief features of operating costing. 07
Q.3 (b) In the course of manufacture of the main product ?P?, by products ?A? and ?B? also
emerge. The joint expenses of manufacture amounted to Rs. 1,19,550/-. All the three
products are processed further after separation and sold as per details given below:
Sales
Cost incurred after separation
Profit as percentage on sales
Main Product
?P?
By Products
?A? ?B?
90,000
6,000
25%
60,000
5,000
20%
40,000
4,000
15%
Total fixed selling and administration expenses are 10% of total cost of sales which
are apportioned to the products in the ratio of 20:40:40.
Required:
(i) Prepare a statement showing the apportionment of joint costs to the main product
and the two by-products.
(ii) If the by-product ?A? is not subjected to further processing and is sold at the point
of separation for which there is a market, at Rs. 58,500/- without incurring any
selling and administration expenses, would you advise its disposal at this stage?
07
OR
Q.3 (a) What is Zero Base Budgeting? Discuss its advantages and disadvantages? 07
Q.3 (b) From the following data calculate the cost per kilometer of a vehicle of Karan
Transport Co. Rs.
Value of vehicle 15,000
Road license for the year 500
Insurance charges per year 100
Garage rent per year 600
Driver?s wages per month 200
Cost of Petrol per litre 0.80
07
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Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER 02? ? EXAMINATION ? WINTER 2015
Subject Code: 2820001 Date: 30/12/2015
Subject Name: COST AND MANAGEMENT ACCOUNTING (CMA)
Time: 02.30 PM TO 05.30 PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1 (a) From the four alternative answers given against each of the following cases,
indicate the correct answer: (just state A, B, C or D)
06
1. Increase in total variable cost is due to:
A. Increase in production B. Increase in fixed cost
C. Increase in sales D. None of the above
2. Cycle manufacturing organization uses the Costing Method:
A. Unit Costing B. Batch Costing
C. Multiple Costing D. Job Costing
3. Director?s remuneration and expenses form a part of:
A. Production overhead B. Administration overhead
C. Selling overhead D. Distribution overhead
4. The costing system applicable to oil refining industry is:
A. Process costing B. Unit costing
C. Joint products & by products D. Job costing
5. For shoe manufacturer, the most suitable cost system is:
A. Job costing B. Contract costing
C. Batch costing D. None of the above
6. Service costing is not used in one of the following:
A. Electricity B. Transport
C. Hospitals D. Electronics
Q.1 (b) Explain the following terms with practical example:
i) Cost Unit
ii) Cost Reduction
iii) Marginal Cost
iv) Margin of Safety
04
Q.1 (c) Discuss in brief advantages and limitations of marginal costing. 04
Q.2 (a) Explain Normal Loss, Abnormal Loss and Abnormal Gain with an example
under process costing.
07
Q.2 (b)
Ruchit Manufacturing Company produces two products, furnishes the following
data for the year 2011:
Products Annual Output
Units
Total Machine
Hours
Total No. of
purchase orders
Total no. of
set-ups
A
B
5,000
60,000
20,000
1,20,000
160
384
20
44
07
2
The annual overheads are as under: Rs.
Machine related activity costs 5.50,000
Set-up related costs 8,20,000
Purchase related costs 6,18,000
You are required to calculate the production overhead rate for absorption of
overheads per unit under:
(a) Traditional approach, using machine hour rate to absorb overheads
(b) Activity based costing approach
OR
Q.2 (b)
Following particulars have been extracted from Rohan Ltd. for the year 2012:
Rs.
Cost of Materials consumed
Wages
Factory Overheads
Administration charges
Selling charges
Distribution charges
Profit
6,00,000
5,00,000
3,00,000
3,36,000
2,24,000
1,40,000
4,20,000
A work order has to be executed in 2013 and the estimated expenses are:
Materials Rs. 16,000 Wages Rs. 10,000
Assuming that in 2013 the rate of factory overheads has gone up by 20%, distribution
charges have gone down by 10% and Selling and administration charges have each gone up
by 15% at what price should the ordered product be sold so as to earn the same rate of profit
as in 2012?
Factory overheads are based on wages and Administration, Selling and Distribution
overheads on factory cost.
07
Q.3 (a) Discuss in brief features of operating costing. 07
Q.3 (b) In the course of manufacture of the main product ?P?, by products ?A? and ?B? also
emerge. The joint expenses of manufacture amounted to Rs. 1,19,550/-. All the three
products are processed further after separation and sold as per details given below:
Sales
Cost incurred after separation
Profit as percentage on sales
Main Product
?P?
By Products
?A? ?B?
90,000
6,000
25%
60,000
5,000
20%
40,000
4,000
15%
Total fixed selling and administration expenses are 10% of total cost of sales which
are apportioned to the products in the ratio of 20:40:40.
Required:
(i) Prepare a statement showing the apportionment of joint costs to the main product
and the two by-products.
(ii) If the by-product ?A? is not subjected to further processing and is sold at the point
of separation for which there is a market, at Rs. 58,500/- without incurring any
selling and administration expenses, would you advise its disposal at this stage?
07
OR
Q.3 (a) What is Zero Base Budgeting? Discuss its advantages and disadvantages? 07
Q.3 (b) From the following data calculate the cost per kilometer of a vehicle of Karan
Transport Co. Rs.
Value of vehicle 15,000
Road license for the year 500
Insurance charges per year 100
Garage rent per year 600
Driver?s wages per month 200
Cost of Petrol per litre 0.80
07
3
Rs.
Kilometers per litre 8
Charges for tyre and maintenance per kilometer 0.20
Estimated life 1,50,000 Kilometers
Estimated annual running 6,000 Kilometers
Q.4 (a) What are the various advantages and disadvantages of budgeting? 07
Q.4 (b) Prepare a flexible budget from the following data:
Capacity 50%
Volume 10,000 units
Selling price per unit Rs. 200
Material cost Rs. 100
Labour cost Rs. 30
Factory overheads Rs. 30 (40% fixed)
Adm. o/h Rs. 20 (50%
variable)
At 60% working, material cost per unit increased by 2% and selling price per unit falls
by 2%.
At 80% working, material cost per unit increased by 5% and selling price per unit falls
by 5%.
Estimate profit at 60% and 80% working and comment.
07
OR
Q.4 (a) What is Standard costing? Discuss in brief advantages and limitations of Standard
Costing.
07
Q.4 (b)
Modern Toys Ltd. had budgeted the following sales for a month:
Toy A 900 units @ Rs. 50 per unit
Toy B 600 units @ Rs. 100 per unit
Toy C 1,500 units @ Rs. 75 per unit
As against this the actual sales were:
Toy A 1,000 units @ Rs. 55 per unit
Toy B 700 units @ Rs. 95 per unit
Toy C 1,100 units @ Rs. 78 per unit
The standard cost per unit of A, B, C were Rs. 45/-, Rs. 85/- & Rs. 65/- respectively whereas
actual costs per unit were Rs. 50/-, Rs. 80/- & Rs. 70/- respectively.
Compute all possible sales variances based on profit.
07
Q.5 A practicing Chartered Accountant now spends Rs. 0.90 per kilometer on taxi fares for
his client?s work. He is considering two other alternatives, the purchase of a new small
car or a bigger car. The estimated cost figures are:
Items New small car
Rs.
Old bigger car
Rs.
Purchase price
Sale price, after 5 years
Repairs and servicing per annum
Taxes and Insurance, per annum
Petrol consumption, per litre
Petrol price, per litre
35,000
19,000
1,000
1,700
10 km
3.50
20,000
12,000
1,200
700
7 km
3.50
He estimates that he does 10,000 km. annually. Which of the three alternatives will be
cheaper? If his practice expands and he has to do 19,000 km. per annum, what should
be his decision? At how many km. per annum will the cost of the two cars break even?
Recommend the car option suitable for different usage.
Ignore interest and income tax.
14
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Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER 02? ? EXAMINATION ? WINTER 2015
Subject Code: 2820001 Date: 30/12/2015
Subject Name: COST AND MANAGEMENT ACCOUNTING (CMA)
Time: 02.30 PM TO 05.30 PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1 (a) From the four alternative answers given against each of the following cases,
indicate the correct answer: (just state A, B, C or D)
06
1. Increase in total variable cost is due to:
A. Increase in production B. Increase in fixed cost
C. Increase in sales D. None of the above
2. Cycle manufacturing organization uses the Costing Method:
A. Unit Costing B. Batch Costing
C. Multiple Costing D. Job Costing
3. Director?s remuneration and expenses form a part of:
A. Production overhead B. Administration overhead
C. Selling overhead D. Distribution overhead
4. The costing system applicable to oil refining industry is:
A. Process costing B. Unit costing
C. Joint products & by products D. Job costing
5. For shoe manufacturer, the most suitable cost system is:
A. Job costing B. Contract costing
C. Batch costing D. None of the above
6. Service costing is not used in one of the following:
A. Electricity B. Transport
C. Hospitals D. Electronics
Q.1 (b) Explain the following terms with practical example:
i) Cost Unit
ii) Cost Reduction
iii) Marginal Cost
iv) Margin of Safety
04
Q.1 (c) Discuss in brief advantages and limitations of marginal costing. 04
Q.2 (a) Explain Normal Loss, Abnormal Loss and Abnormal Gain with an example
under process costing.
07
Q.2 (b)
Ruchit Manufacturing Company produces two products, furnishes the following
data for the year 2011:
Products Annual Output
Units
Total Machine
Hours
Total No. of
purchase orders
Total no. of
set-ups
A
B
5,000
60,000
20,000
1,20,000
160
384
20
44
07
2
The annual overheads are as under: Rs.
Machine related activity costs 5.50,000
Set-up related costs 8,20,000
Purchase related costs 6,18,000
You are required to calculate the production overhead rate for absorption of
overheads per unit under:
(a) Traditional approach, using machine hour rate to absorb overheads
(b) Activity based costing approach
OR
Q.2 (b)
Following particulars have been extracted from Rohan Ltd. for the year 2012:
Rs.
Cost of Materials consumed
Wages
Factory Overheads
Administration charges
Selling charges
Distribution charges
Profit
6,00,000
5,00,000
3,00,000
3,36,000
2,24,000
1,40,000
4,20,000
A work order has to be executed in 2013 and the estimated expenses are:
Materials Rs. 16,000 Wages Rs. 10,000
Assuming that in 2013 the rate of factory overheads has gone up by 20%, distribution
charges have gone down by 10% and Selling and administration charges have each gone up
by 15% at what price should the ordered product be sold so as to earn the same rate of profit
as in 2012?
Factory overheads are based on wages and Administration, Selling and Distribution
overheads on factory cost.
07
Q.3 (a) Discuss in brief features of operating costing. 07
Q.3 (b) In the course of manufacture of the main product ?P?, by products ?A? and ?B? also
emerge. The joint expenses of manufacture amounted to Rs. 1,19,550/-. All the three
products are processed further after separation and sold as per details given below:
Sales
Cost incurred after separation
Profit as percentage on sales
Main Product
?P?
By Products
?A? ?B?
90,000
6,000
25%
60,000
5,000
20%
40,000
4,000
15%
Total fixed selling and administration expenses are 10% of total cost of sales which
are apportioned to the products in the ratio of 20:40:40.
Required:
(i) Prepare a statement showing the apportionment of joint costs to the main product
and the two by-products.
(ii) If the by-product ?A? is not subjected to further processing and is sold at the point
of separation for which there is a market, at Rs. 58,500/- without incurring any
selling and administration expenses, would you advise its disposal at this stage?
07
OR
Q.3 (a) What is Zero Base Budgeting? Discuss its advantages and disadvantages? 07
Q.3 (b) From the following data calculate the cost per kilometer of a vehicle of Karan
Transport Co. Rs.
Value of vehicle 15,000
Road license for the year 500
Insurance charges per year 100
Garage rent per year 600
Driver?s wages per month 200
Cost of Petrol per litre 0.80
07
3
Rs.
Kilometers per litre 8
Charges for tyre and maintenance per kilometer 0.20
Estimated life 1,50,000 Kilometers
Estimated annual running 6,000 Kilometers
Q.4 (a) What are the various advantages and disadvantages of budgeting? 07
Q.4 (b) Prepare a flexible budget from the following data:
Capacity 50%
Volume 10,000 units
Selling price per unit Rs. 200
Material cost Rs. 100
Labour cost Rs. 30
Factory overheads Rs. 30 (40% fixed)
Adm. o/h Rs. 20 (50%
variable)
At 60% working, material cost per unit increased by 2% and selling price per unit falls
by 2%.
At 80% working, material cost per unit increased by 5% and selling price per unit falls
by 5%.
Estimate profit at 60% and 80% working and comment.
07
OR
Q.4 (a) What is Standard costing? Discuss in brief advantages and limitations of Standard
Costing.
07
Q.4 (b)
Modern Toys Ltd. had budgeted the following sales for a month:
Toy A 900 units @ Rs. 50 per unit
Toy B 600 units @ Rs. 100 per unit
Toy C 1,500 units @ Rs. 75 per unit
As against this the actual sales were:
Toy A 1,000 units @ Rs. 55 per unit
Toy B 700 units @ Rs. 95 per unit
Toy C 1,100 units @ Rs. 78 per unit
The standard cost per unit of A, B, C were Rs. 45/-, Rs. 85/- & Rs. 65/- respectively whereas
actual costs per unit were Rs. 50/-, Rs. 80/- & Rs. 70/- respectively.
Compute all possible sales variances based on profit.
07
Q.5 A practicing Chartered Accountant now spends Rs. 0.90 per kilometer on taxi fares for
his client?s work. He is considering two other alternatives, the purchase of a new small
car or a bigger car. The estimated cost figures are:
Items New small car
Rs.
Old bigger car
Rs.
Purchase price
Sale price, after 5 years
Repairs and servicing per annum
Taxes and Insurance, per annum
Petrol consumption, per litre
Petrol price, per litre
35,000
19,000
1,000
1,700
10 km
3.50
20,000
12,000
1,200
700
7 km
3.50
He estimates that he does 10,000 km. annually. Which of the three alternatives will be
cheaper? If his practice expands and he has to do 19,000 km. per annum, what should
be his decision? At how many km. per annum will the cost of the two cars break even?
Recommend the car option suitable for different usage.
Ignore interest and income tax.
14
4
OR
Q.5 (a) Mr. X has Rs. 2,00,000/- investment in his business firm. He wants a 15 per cent
return on his money. From an analysis of recent cost figures, he finds that his
variable cost of operating is 60 per cent of sales and his fixed costs are Rs. 80,000/-
per year. Show computations to answer the following questions:
(i) What sales volume must be obtained to break-even?
(ii) What sales volume must be obtained to get 15 per cent return on
investment?
(iii) Mr. X estimates that even if he closes the doors of his business, he
would incur Rs. 25,000/- as expenses per year. At what sales he
would be better off by locking his business up?
07
(b) Manthan Corporation manufactures and sells three products to the automobile
industry. All the products must pass through a machining process, the capacity of
which is limited to 20,000 hours per annum, both by equipment design and
government regulation.
The following additional information is available:
Product
X
Product
Y
Product
Z
Selling price per unit
Variable cost per unit
Machining requirement hours per unit
Maximum possible sales units
1,900
700
3
10,000
2,400
1,200
2
2,000
4,000
2,800
1
1,000
Required:
A statement showing the best possible production mix which would provide the
maximum profit for Manthan Corporation together with supporting workings.
07
*************
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This post was last modified on 19 February 2020