Download JNTU-Hyderabad MBA 3rd Sem R15 2018 Jan 723AG Strategic Management Accounting Question Paper

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

1. a) What are the benefits of Activity Based Costing? [5]

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2. b) What are the different methods of valuing By-products? [5]
3. c) With what criteria, managements can think of diversifying their products? [5]
4. d) What is the role of ‘Contribution' while taking managerial decisions? [5]
5. e) How do you compute Material Yield Variance? [5]

PART - B

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5×10 Marks = 50

1. Make a comparative statement showing the distinction between Financial Accounting and Management Accounting.
   OR [10]
2. 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
   

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   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
   

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   Expenses of X
   A 20%
   B 40%
   C 30%
   Expenses of Y
   

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   A 40%
   B 20%
   C 20%
   X 20%
   Y 10%
   

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   Show clearly as to how expenses of X and Y Departments would be apportioned to A, B and C Departments. [10]
3. 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
   

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   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
   

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   Prepare the Process cost account showing cost per tone of each process. There was no stock or work in process in any process. [10]
4. OR
5. 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
   

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   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
   

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   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]
6. An engineering company manufactures four components, namely A, B, C and D, the cost particulars of which are given below:
   A (Rs.)
   B (Rs.)
   

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   C (Rs.)
   D (Rs.)
   Direct Materials 80 100 100 120
   Direct Labour 20 25 25 30
   Variable overhead 10 15 15 23
   

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   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]

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7. OR
8. 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;
   

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   (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
   

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   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]
9. 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
   

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   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
   

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   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.
10. OR
11. What are the essentials of a successful Inter firm comparison? How can it benefit the Management? What are its limitations? [10]
12. 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
    

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    Types
    Budgeted sales
    Actual sales
    Andhra Pradesh
    Sindhu
    

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    400 pieces @ Rs.9 each
    500 pieces @ Rs.9 each
    Bindu
    300 pieces @Rs.21 each
    200 pieces @ Rs.21 each
    

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    Telangana
    Sindhu
    600 pieces @ Rs.9 each
    700 pieces @ Rs.9 each
    Bindu
    

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    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:
    

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    Product
    Sindhu
    Bindu
    Andhra Pradesh 40 pieces 60 pieces
    Telangana 70 pieces 50 pieces
    

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    You are required to prepare sales budget. [10]
13. OR
14. The standard labour composition and the actual labour composition engaged in 10 weeks for a job are as under: [10]
    Standard
    Actual
    

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    Category of workers
    No. of workers
    Weekly wage rate/worker
    No. of workers
    Weekly wage rate/worker
    

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    Grade A
    40
    Rs.80
    50
    Rs.70
    

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    Grade B
    50
    Rs.70
    60
    Rs.75
    

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    Grade C
    30
    Rs.50
    10
    Rs.60
    

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    The work is actually completed in 12 weeks. Calculate various labour variances.

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