NEW DELHI INSTITUTE OF MANAGEMENT

MID SEMESTER EXAMINATION

OCTOBER, 2020

BBA: 3rd SEM

Paper Code: 207 Subject: Management Accounting
Time: 3 Hours Maximum Marks: 30

Link for submitting Answer sheet:

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Note- Question No.1 is compulsory. Attempt any ‘two’ from rest of the questions.

Q1. Write Short note on any 2 (10)

1. Ratio Analysis ,its advantages & limitations.

2. Difference between Management Accounting & Finanacial Accounting.
3. Profit Volume Ratio & Break Even Point
4. Liquidity Ratio
5. Turnover Ratio

Q2. (10)

Q3. MN Ltd. gives you the following information related for the year ending 31st March
2019

Current Ratio 2.5:1

Debt Equity Ratio 1:15
Return to Total Assets 15%
Total Assets Total Ratio 2
Gross Profit Ratio 20%
Stock Turnover Ratio 7
Current Market Price per Equity Share Rs.16
Net Working Capital Rs.4,50,000
60,000 Equity Shares of Rs.10 each
Fixed Assets Rs.10,00,000
20,000 ,9% Preference Share of Rs.10 each
Opening Stock Rs.3,80,000
You are required to calculate :

1) Quick Ratio

2) Fixed Asset Turnover Ratio

3) Proprietary Ratio

4) Earning per share (10)

Q4. A company supplies the following information:

Capital & liabilities Amount(Rs.) Assets Amount(Rs.)

Share Capital 2,00,000 Goodwill 1,20,000
Reserves & 58,000 Plant and 1,50,000
surpluses 1,00,000 machinery 80,000
Debentures 40,000 Stock 45,000
Creditors 20,000 Debtors 17,000
Bills Payable 2,000 Cash 8,000
Current Liabilties _________________ Miss current assests ______________________
4,20,000 4,20,000

Sales (credit) for the year =Rs 4,00,000

Gross profit =Rs 1,60,000

Calculate:

1) Current ratio

2) Quick or liquid ratio

3) Inventory turnover

4) Average collection period,

5) Proprietors funds to liablities (10)

Q5.) Given are the following data:

Year Sales Profit
2018 Rs.1,20,000 Rs.8,000
2019 Rs.1,40,000 Rs.13,000
Find out--

a) P/V ratio

b)Break Even Point

c) Profit when sales are Rs.1,80,000

d)Sales required to earn a profit of Rs.12,000

e) Margin of Safety in year 2019

(10)

Q6. The expense budgeted for production of 10,000 units in a factory are furnished below

Particular Rs. per unit

Materials 70
Labour 25
Variable Overheads 20
Fixed Overheads(Rs.1,00,000) 10
Variable Expenses(direct) 5
Selling Expenses(10% fixed) 13
Administrative expenses(Rs.50,000) 5
Distribution expenses(20% fixed) 7
Total Rs.155
Prepare a Budget for the production of (a) 8,000 units, and (b) 6,000 units.

Assue that administrative expenses are rigid for all levels of production (10)

Q7. A,B & C are three siilar plants under the sae management who want them to be merged for
better operation.The details are as under:

Plant A B C
Capacity operated 100% 70% 50%
Rs.(lakhs) Rs.(lakhs) Rs.(lakhs)
Turnover 300 280 150
Variable cost 200 210 75
Fixed Cost 70 50 62
Find Out:
a) The Capacity of merged plant for Break even.

b)The profit at 75% capacity of the merged plant.

c) The turnover from the merged plant to give a profit of Rs.28 Lakhs. (10)