Subject Code: 3539905
Seat No.: Enrolment No.
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GUJARAT TECHNOLOGICAL UNIVERSITY
MBA (PART TIME)- SEMESTER III- EXAMINATION SUMMER - 2019
Subject Name: COST & MANAGEMENT ACCOUNTING
Time: 02:30 PM To 05:30 PM
Date: 17/05/2019
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Total Marks: 70
Instructions:
- Attempt all questions.
- Make suitable assumptions wherever necessary.
- Figures to the right indicate full marks.
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Q.1 Define the following terms. Each term carry two marks:- 14
- Historical Cost
- Financial Accounting
- Unit Costing
- Cost Centers
- Zero Base Budget
- Budgeting
- Variances
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Q.2 (a) What do you mean by Management Accounting? Explain the scope of management accounting. 07
(b) Define Activity based costing and its objectives. 07
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OR
(b) Explain the techniques of the strategic management accounting in brief. 07
Q.3 (a) Define budget and budgetary control. State the advantages and limitations of budgetary control in brief. 07
(b) What do you mean by Marginal Costing? Define characteristics of marginal costing. 07
OR
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Q.3 (a) A medical product manufactured by Thomas Pharma, passes through three distinct processes to completion. During a week 10000 grams of materials valued at Rs. 50000 were introduced and following expenses were incurred:- 07
| Process A | Process B | Process C | |
|---|---|---|---|
| Machine Expenses | 5000 | 4000 | 3000 |
| Labour | 20000 | 30000 | 25000 |
| Direct Expenses | 11000 | 16400 | 4600 |
| Normal Wastage (On input) | 5% | 10% | 5% |
| Scrap value per gram (Rs.) | 1 | 2 | 2.5 |
| Actual Output (Grams) | 9000 | 8000 | 7700 |
(b) Following particulars have been extracted for the year 2016 from a Factory. 07
Cost of Materials 600000 | Selling Charge 224000
Wages 500000 | Distributions 140000
Factory overhead 300000 | Profit 420000
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Administration charges 336000
A work order has to be executed in 2017, and estimated expenses are:-
Material Rs.8000, and Wages Rs. 5000.
Assuming that in 2017, the factory overheads will go up by 20%, distribution overheads will come down by 10% and selling and administration charges will go up by 15%. At what price the product to be sold, so as to earn same rate of profit on selling price as in 2016? Factory overheads are charged on the basic wages and administration, selling and distribution overheads are on factory cost .
Calculate the estimated cost of this work order
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Q.4 CASE STUDY: 14
A company produces three types of products X, Y and Z. The cost per unit of these three products is given below:-
| Particulars | Product X | Product Y | Product Z |
|---|---|---|---|
| Direct Material | 10 | 8 | 9 |
| Direct labour | 6 | 7 | 6 |
| Variable expenses | 4 | 5 | 3 |
| Fixed expenses | 2 | 3 | 2 |
| Total Cost | 23 | 23 | 20 |
| Profit | 9 | 7 | 6 |
| Selling Price | 32 | 30 | 26 |
| Number of units Produced | 20000 | 10000 | 16000 |
Production arrangements are such that if one product is given up, the production of the others can be raised by 50%. The Directors propose that Product Z should be given up because the contribution from the product is the lowest.
Do the analysis of data and give your comment that the proposal of Directors of the company should be accepted or is there another better option available for the company?
OR
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Q.4 (a) A Company produces a single product and sell it at Rs. 200 each. The variable cost of the product is Rs. 120 per unit and fixed cost for the year is Rs. 96000/-. 07
Calculate:-
- P/V Ratio
- Sales at Break- even point
- Sales units required to earn a target net profit of Rs. 120000
- Sales units required to earn a net profit of Rs. 100000 after to income tax, assuming tax rate to be 50%
- Profit at sales of Rs. 700000.
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(b) Describe the various classifications of costs in brief. 07
The Director of Good luck Ltd. are considering the result of the profits and loss statement for the year that ended on 31 December 2009. The extract is as follows: 14
| Particulars | Rs. | Rs. |
|---|---|---|
| Sales | 1500000 | |
| Direct material | 450000 | |
| Direct wages | 300000 | |
| Variable overheads | 120000 | |
| Fixed overheads | 440000 | 1310000 |
| Profits | 190000 |
The budgeted capacity of the company is RS. 2000000, but the key factors is sales demand. The sales manager is proposing that in order to utilize the existing capacity, the selling price of the only product manufactured by the company should be reduced by 5%
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You are required to help the Board of Director to accept the proposed reduction in the selling price by prepare a forecast statement of profit and costs expected during the year 2010.
The following additional information is provided:-
- Sales forecast Rs. 19,00,000.
- Direct material prices are expected to increase by 2%
- Direct wages are expected to increase by 5%
- Variable overhead costs are expected to increase by 5% per unit.
- Fixed overhead costs are expected to increase by Rs.20000.
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OR
Q.5 (a) From the following information, calculate various material variances:- 07
| Material | Standards | Actuals |
|---|---|---|
| A | 100 Kg @ Rs. 20 per Kg | 215 Kg @ Rs. 18 per Kg |
| B | 200 Kg @ Rs. 17 per Kg. | 385 Kg @ Rs. 20 per Kg |
| 300Kg | 600 Kg. | |
| Loss | 30Kg | 70Kg |
| Output | 270 Kg | 530Kg |
(b) Write a detail note on Kaizen costing. 07
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This download link is referred from the post: GTU MBA Last 10 Years 2010-2020 Question Papers || Gujarat Technological University
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