R15
Code No: 723AG
JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY HYDERABAD
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MBA III Semester Examinations, January-2018
STRATEGIC MANAGEMENT ACCOUNTING
Time: 3hours
Max.Marks:75
Note: This question paper contains two parts A and B.
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Part A is compulsory which carries 25 marks. Answer all questions in Part A.
Part B consists of 5 Units. Answer any one full question from each unit. Each question carries 10 marks and may have a, b, c as sub questions.
PART - A
5×5 Marks = 25
- a) What are the benefits of Activity Based Costing? [5]
- b) What are the different methods of valuing By-products? [5]
- c) With what criteria, managements can think of diversifying their products? [5]
- d) What is the role of ‘Contribution' while taking managerial decisions? [5]
- e) How do you compute Material Yield Variance? [5]
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PART - B
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5×10 Marks = 50
- Make a comparative statement showing the distinction between Financial Accounting and Management Accounting.
OR [10] - A company has three production departments A,B, and C and two service departments X and Y. The expenses incurred by them during a month are
A Rs.80,000--- Content provided by FirstRanker.com ---
B 70,000
C 50,000
X Rs.23,400
Y 30,000
The expenses of service Apartments are apportioned to production departments on the following basis--- Content provided by FirstRanker.com ---
Expenses of X
A 20%
B 40%
C 30%
Expenses of Y--- Content provided by FirstRanker.com ---
A 40%
B 20%
C 20%
X 20%
Y 10%--- Content provided by FirstRanker.com ---
Show clearly as to how expenses of X and Y Departments would be apportioned to A, B and C Departments. [10] - The product of a manufacturing concern passes through two processes A and B and then to finished stock. It is ascertained that in each process, 5% of total weight is lost and 10% is scrap, which from Processes A and B realizes Rs.80 per tonne and Rs.200 per tonne respectively.
The following are the figures relating to both the processes:
Process A
Process B--- Content provided by FirstRanker.com ---
Materials (Tonnes) 1,000 70
Cost of Materials (Rs./tonne) 125 200
Output (tonnes) 830 780
Wages (Rs..) 28,000 8,000
Manufacturing expenses (Rs.) 10,000 5,250--- Content provided by FirstRanker.com ---
Prepare the Process cost account showing cost per tone of each process. There was no stock or work in process in any process. [10] - OR
- A cycle manufacturing company requires to quote for a contract for the supply of 500 bicycles on 31st March. 2017. From the following details, prepare a statement showing the price to be quoted to give the same % of net profit on turnover as was realized during the previous six months.
Stock of Materials on 1st July, 2016 Rs.50,000
Stock of materials on31st December, 2016 Rs.7,000--- Content provided by FirstRanker.com ---
Purchase of materials during 6 months to 31st December, 2016 Rs.75,000
Factory wages Rs.1,50,000
Indirect expenses Rs.25,000
Sales Rs.2,70,000
Completed stock in hand on 1st July, 2016 Nil--- Content provided by FirstRanker.com ---
Completed stock in hand on 31st December Rs.50,000
The number of bicycles manufactured during six months was 2,000, including those sold and those in stock at the end of the period. The size of the bicycles and also the quality remain unchanged. However with effect from 1st January,2017, wages were increased by 10% and that of materials by 15%. [10] - An engineering company manufactures four components, namely A, B, C and D, the cost particulars of which are given below:
A (Rs.)
B (Rs.)--- Content provided by FirstRanker.com ---
C (Rs.)
D (Rs.)
Direct Materials 80 100 100 120
Direct Labour 20 25 25 30
Variable overhead 10 15 15 23--- Content provided by FirstRanker.com ---
Fixed overhead 15 20 20 16
Output per Machine-hour (Units) 4 2 3 3
Machine cost/hour 125 160 160 180
The key factor is shortage of machine capacity. You are required to advise the Management as to whether they should continue to produce all or some of these components (which are in its main product) or they should buy them from a supplier who has quoted the following prices:
A:Rs.115; B:Rs.175; C:Rs.135; and D:Rs.185. [10] - OR
- The Directors of a company are considering the sales budget for the next budget period. You are required to present to the Board, a statement showing marginal cost of each product and also to recommend which of the following sales mixes should be adopted:
(a) 900 units of X and 600 units of Y;
(b) 1,800 units of X only;
(c) 1,200 units of X and 400 units of Y;--- Content provided by FirstRanker.com ---
(d) 1,200 units of Y only.
You are given the following information:
Product X
Product Y
Direct Materials per unit Rs.20 Rs.25--- Content provided by FirstRanker.com ---
Direct labour @ Rs.5.00 per Hour 30 Hours 20 Hours
Selling price Rs.300 Rs.500
Overheads: Fixed:Rs.10,000 per annum and Variable:100% of labour. [10] - There are two similar plants functioning under the same management. The management desires to merge these two plants. The following particulars are available:
Factory I--- Content provided by FirstRanker.com ---
Factory II [10]
Capacity operation 100% 60%
Sales 3,00,00,000 1,20,00,000
Variable costs 2,00,00,000 90,00,000
Fixed costs 40,00,000 20,00,000--- Content provided by FirstRanker.com ---
You are required to calculate (a) capacity of the merged plant to be operated for the purpose of break even, and (b) the profitability on working at 75% of the merged capacity. - OR
- What are the essentials of a successful Inter firm comparison? How can it benefit the Management? What are its limitations? [10]
- A toy manufacturing company manufactures two types of toys, namely Sindhu and Bindu and sells them in Andhra Pradesh and Telangana markets. The following information is made available for the current year:
Market--- Content provided by FirstRanker.com ---
Types
Budgeted sales
Actual sales
Andhra Pradesh
Sindhu--- Content provided by FirstRanker.com ---
400 pieces @ Rs.9 each
500 pieces @ Rs.9 each
Bindu
300 pieces @Rs.21 each
200 pieces @ Rs.21 each--- Content provided by FirstRanker.com ---
Telangana
Sindhu
600 pieces @ Rs.9 each
700 pieces @ Rs.9 each
Bindu--- Content provided by FirstRanker.com ---
500 pieces @ Rs.21 each
400 pieces @ Rs.21 each
Market study reveals that toy Sindhu is and it is underpriced. It is observed that if its price is increased by Re.1, it will find a readymade market. On the other hand, Bindu is overpriced and market could absorb more sales if its price is reduced to Rs.20. The management has agreed to give effect to the above changes.
On the above basis, the following estimates have been prepared by the Sales Manager:
With the help of an intensive sales campaign, the following additional sales above estimated sales are possible:--- Content provided by FirstRanker.com ---
Product
Sindhu
Bindu
Andhra Pradesh 40 pieces 60 pieces
Telangana 70 pieces 50 pieces--- Content provided by FirstRanker.com ---
You are required to prepare sales budget. [10] - OR
- The standard labour composition and the actual labour composition engaged in 10 weeks for a job are as under: [10]
Standard
Actual--- Content provided by FirstRanker.com ---
Category of workers
No. of workers
Weekly wage rate/worker
No. of workers
Weekly wage rate/worker--- Content provided by FirstRanker.com ---
Grade A
40
Rs.80
50
Rs.70--- Content provided by FirstRanker.com ---
Grade B
50
Rs.70
60
Rs.75--- Content provided by FirstRanker.com ---
Grade C
30
Rs.50
10
Rs.60--- Content provided by FirstRanker.com ---
The work is actually completed in 12 weeks. Calculate various labour variances.
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