# R5/NR

Code No: NR/R5-302/MBA
M.B.A. III-Semester Examinations, December-2006. COST AND MANAGEMENT ACCOUNTING Time: 3 hours Max. Marks: 60 Answer any FIVE questions All questions carry equal marks --1. What do you understand by ‘management accounting’? How is it different from cost accounting and financial accounting? Illustrate. 2. Write short notes on any three of the following: (a) Normal and abnormal losses (b) Margin of safety and angle of incidence (c) cost audit (d) Zero based budgeting (e) machine hour rate. From the following particulars, prepare (a) a cost sheet showing (i) the cost of materials consumed (ii) prime cost (iii) production cost (iv) total cost and (v) profit. (b) calculate (i) percentage of production overheads to direct wages (ii) percentage of general overheads to production cost and (iii) percentage of profit on sales. (c) tender given that Direct materials for a given job Rs.50,000 and Direct wages Rs.25,000 Rs. Stock of raw materials 1.1.2004 30,850 Work in progress 60,850 Purchase of raw materials 1,43,250 Direct wages 1,78,500 Production overhead expenses 1,42,800 General Overhead expenses 1,12,700 Stock of raw materials 31.12.2004 37,700 Work in progress 67,750 Sales for the year 8,60,625 Given that Production and sales: 8,000 units Selling price per unit Rs.20 Variable cost per unit: Direct materials Rs.5 Direct labour Rs.2.50 Variable overhead 100% of direct labour cost Fixed cost Rs.40,000 Find out (a) P/V ratio (b) break even sales (c) margin of safety. Contd…..2

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Code No: NR/R5-302/MBA 5.

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From the following particulars, compute (a) material cost variance (b) material price variance and (c) material usage variance: Quantity of materials purchased 3000 units Value of materials purchased Rs.90,000 Standard quality of materials required per ton of 30 units output Standard rate of material Rs.25 per unit Opening stock of materials Nil Closing stock of materials 500 units Output during the period 80 tons Prepare flexible budget on the basis of the following information for the year 2004-05: Particulars Rs. Direct materials 6,00,000 Direct labour 4,00,000 Direct expenses 2,00,000 Machine expenses 1,00,000 Motive power 1,00,000 Factory Overheads (80% fixed) 80,000 Office overheads (60% fixed) 1,20,000 Selling overheads (50% fixed) 40,000 Sales (selling price being Rs.2,000 per unit) 20,00,000 During the year, all the units produced were sold and the factory was working at the capacity of 60 per cent. The flexible budget is to be prepared with the following assumptions: (a) that the capacity will be 75 percent and (b) that the price of direct material will increase by 25 percent and the wages will increase by 20 percent. What do you understand by ‘Management audit’? conduct management audit? Explain. How do you allocate and apportion overheads? illustrate. --How do you Explain and

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