1
LOYOLA COLLEGE (AUTONOMOUS), CHENNAI 600 034
B.Com.DEGREE EXAMINATION -COMMERCE
SIXTH SEMESTER APRIL 2018
CO 6609- MANAGEMENT ACCOUNTING
Date: 19-04-2018 Dept. No. Max. 100 Marks
Time: 09:00-12:00
Section
Answer ALL the questions: 10 x 20 Marks
1. What is Management Accounting?
2. What is Ratio Analysis?
3. What is Current Asset?
4. State the meaning of Breakevenpoint.
5. What is Budgeting?
6. Calculate Gross Profit Ratio from the following figures:
Rs.
Sales 10,00,000
Sales returns 1,00,000
Opening stock 2,00,000
Purchase 6,00,000
Purchase returns 1,50,000
Closing stock 65,000
7. Proposed dividend during 2003 Rs. 80,000
Proposed dividend during 2004 Rs. 1,10,000
Dividend paid in 2004 Rs. 80,000
Prepare Proposed Dividend ledger account.
8. From the following find profit:
Rs.
Fixed cost 5,00,000
Variable cost per unit 10
Selling price per unit 15
Output level 1,50,000 units.
9. From the following particulars
Calculate Material cost variance
Material purchased 3,000 kgs at Rs. 6 per kg
Standard quantity of material fixed
for one unit of finished product 25 kgs at Rs. 4 per kg
Opening stock of material Nil
Closing stock of material 500 kgs
Actual output during the period 80 units.
10. You are required to prepare a production budget for the half year ending June 2000 from the following information:
Product
Budget sales quantity
Actual stock on 31-12-99
Desired stock on 30-6-2000
Units
Units
Units
S
20,000
4,000
5,000
T
50,000
6,000
10,000
2
Section
Answer any FOUR questions: 4 x 10= 40 Marks
11. You are given the following Balance Sheet. Calculate Current ratio, Liquid ratio, Absolute liquid ratio, Debt equity ratio, Fixed assets ratio and Proprietary ratio.
Liabilities
Rs.
Assets
Rs.
Equity share capital
Reserves
P&L A/c
Secured loan
Creditors
Provision for Tax
2,00,000
40,000
60,000
1,60,000
1,00,000
40,000
Goodwill
Fixed assets
Stock
Debtors
Bills Receivable
Cash
1,20,000
2,80,000
80,000
40,000
20,000
60,000
Total
6,00,000
Total
6,00,000
12. Draw up a flexible budget for production at 75% and 100% capacity on the basis of the following data for a 50% activity.
Per unit
Rs.
Materials 100
Labour 50
Variable expenses (direct) 10
Administrative expenses fixed) 40,000
Selling and distribution expenses fixed) 50,000
Present production activity): 1,000 units
13. The sales turnover and profit during two years were as follows:
Year Sales Profit
Rs. Rs.
2006 1,40,000 15,000
2007 1,60,000 20,000
Calculate:
P/V Ratio
Break-even point
Sales required to earn a profit of Rs. 40,000
Fixed expenses and
Profit when sales are Rs. 1,20,000.
14. From the following data, calculate all labour variances:
Budgeted labour for computing job
8 skilled workers at Rs.10 per hour for 20 hours
12 unskilled workers at Rs.8 per hour for 20 hours
Actual labour for computing job
12 skilled workers at Rs.11 per hour for 20 hours
13 unskilled workers at Rs.7 per hour for 20 hours
15. A company manufactures a particular product the standard material cost of which is Rs.10 per unit. The following information is obtained from the cost records:
Standard Mix:
Material
Quantity
Units
Rate Rs.
Amount
Rs.
A
B
70
30
10
5
700
150
Total
Less: 15%
100
15
850

3
85
850
Actual results for January 2018:
Material
Quantity
Units
Rate Rs.
Amount
Rs.
A
B
400
200
11
6
4,400
1,200
Total
Less: 10%
600
60
5,600

540
5,600
Calculate all Material Variances
16. What are the functions of Management Accounting?
17. What are the advantages and limitations of Ratio Analysis?
Section
Answer any TWO questions: 2 x 20= 40 Marks
18. The following are the summarized Balance Sheets of Shekar Ltd., on 31-12-16 and 31-12-17.
Balance Sheets
Liabilities
2016
Rs.
2017
Rs.
Assets
2016
Rs.
2017
Rs.
Share capital
12,00,000
16,00,000
Debentures
4,00,000
6,00,000
Plant Machinery
8,00,000
12,90,000
P L A/c
2,50,000
5,00,000
(at cost)
Creditors
2,30,000
1,80,000
Land Building (at cost)
6,00,000
8,00,000
Provision for:
Stock
6,00,000
7,00,000
Bad Doubtful debts
12,000
6,000
Bank
40,000
80,000
Depreciation on land and building
40,000
48,000
Preliminary expenses
14,000
12,000
Depreciation on Plant and Machinery
60,000
70,000
Debtors
1,38,000
1,22,000
21,92,000
30,04,000
21,92,000
30,04,000
Additional Information:
During the year, a part of the machinery, costing Rs. 1,40,000 [accumulated depreciation thereon Rs. 40,000] was sold for Rs. 1,02,000.
Dividend of Rs. 1,00,000 was paid during the year.
Ascertain:
Changes in working capital for 2017
Funds Flow Statement for 2017
19. The following ratios and other data related to the financial statement of J Co. Ltd for the year ending 31st March 2018:
Working capital ratio (Current ratio)
Acid test ratio
Working capital
Fixed assets to shareholders equity
1.75
1.27
Rs.33,000
0.625
4
Inventory turnover ratio (based on closing stock)
Gross Profit Ratio
Earnings per share
Debt collection period
No. of shares issued
Earnings for the year on share capital
4 times
40%
Re. 0.50
73 days
20,000
25%
The company has no prepaid expenses, deferred charges, intangible assets or long-term liabilities. You are required to draft the company's profit and loss account and balance sheet.
20. A newly started Pushpak Co. wishes to prepare cash budget from January. Prepare a cash budget for the 6 months from the following estimated revenue and expenses.
Months
Total sales
Rs.
Materials
Rs.
Wages
Rs.
Production overhead
Rs.
Selling Distribution overhead
Rs.
January
20,000
20,000
4,000
3,200
800
February
22,000
14,000
4,400
3,300
900
March
24,000
14,000
4,600
3,300
800
April
26,000
12,000
4,600
3,400
900
May
28,000
12,000
4,800
3,500
900
June
30,000
16,000
4,800
3,600
1,000
Cash balance on 1st January was Rs.10,000. A new machine is to be installed at Rs. 30,000 on credit, to be repaid by two equal installments in March and April. Sales commission at on total sales is to be paid within the month following actual sales.
Rs. 10,000 being the amount of 2nd call may be received in March. Share premium amounting to Rs. 2,000 is also obtained with 2nd call.
Period of credit allowed by suppliers 2 months
Period of credit allowed to customers 1 month
Delay in payment of overheads 1 month
Delay in payment of wages ½ month
Assume cash sales to be 50% of the total sales.
21. The following particulars are extracted from the records of a company:
Details
Product A
Product B
Sales (per unit)
Consumption of material
Material cost
Direct wages cost
Direct expenses
Machines hours used
Overhead expenses:
Fixed
Variable
Rs.100
2KG
Rs.10
Rs.15
Rs.5
3
Rs.5
Rs.15
Rs.120
3KG
Rs.15
Rs.10
Rs.6
2
Rs.10
Rs.20
Direct wages per hour is Rs.5. Comment on the profitability of each product (both use the same raw material) when:
i. Total sales potential in units is limited
ii. Production capacity (in terms of machine hours) is the limiting factor
iii. Material is in short supply
iv. Sales potential in value is limited.