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Code No: R5-302/MBA

M.B.A. III-Semester Examinations, December-2007.


Time: 3 hours Max. Marks: 60

Answer any FIVE questions

All questions carry equal marks

1. What are the general principles which you as a cost controller

should keep in mind while you set costing system?

2. Explain the following:

a) Cost of tools
b) Cost of receiving and handling material
c) Blanket rate
d) Comprehensive machine hour rate.

3. A work order passes through two distinct processes. The product

of the first process less wastage and by-product, becomes the raw
materials for the second process. All by-products are sold off direct
from factory. The following information is obtained from the factory
records :

Details First Process Second Process

Raw Materials 1,00 tonnes at Rs. 30 a tonne __

Wages Rs. 25,00 Rs. 20,000

Factory overhead 80% of wages 75% of wages
Wastages 10 tonnes 15 tonnes
Sales of by-products 190 tonnes at cost plus 20% 85 tonnes at cost plus

Give the Ledger accounts for the first and second processes,
showing at each stage the cost of the product and the profit on the
sale of the by-products.

Code No: R5-302/MBA -2-

4. A factory engaged in manufacturing plastic buckets is working at

40% capacity and produces 10,000 buckets per annum.
The present cost break-up for one bucket is as under:
Material Rs.10
Labour cost Rs.3
Overhead Rs.5 (60% fixed)
The Selling Price is Rs.20 per bucket.
If it is decided to work the factory at 50% capacity, the selling price
falls by 3%. At 90% capacity, the selling price falls by 5%
accompanied by a similar fall in the prices of material.
You are required to calculated the profit at 50% and 90%

5. What is contribution analysis ? Explain its significance in cost volume profit


6. What is Zero Based Budgeting ? State the requirements for application of

Zero Based Budgeting.

7. In a manufacturing concern, the standard time fixed for a month is 8,000

hours. A standard wage rate of Rs.2.25 paise per hour has been fixed.
During one month, 50 workers were employed and average working days
in a month are 25. A worker works for 7 hours in a day. Total wage bill
of the factory for the month amounts to Rs.21,875. There was a
stoppage of work due to power failure (idle time) for 100 hours. Calculate
various labour variances.

8. Discuss the need and objectives of inter firm comparison.