Central College of Business Management

Mid Term Examination: February 2020

Program: BBA Semester : III
Batch : 2017 Full Marks: 60
Subject: Basics of Managerial Accounting Pass Marks: 27
Time : 2 hours
Candidates are required to give their answers in their own words as far
as practicable.
Section – A
Very Short Answer Questions
Attempt all the questions. (2×5 =10)
1. What do you meant by fixed cost?
2. Explain the features of variable cost.
3. Define the term flexible budget.
4. What do you understand by break- even point? Explain.
5. A company provides the following information:
Production units 1,000units 1,500units
Maintenance cost Rs 30,000 Rs 27,500
Required: Segregate the cost using high-low method.

Section – B
Descriptive Answer Questions
Answer any three questions. (10×3=30)
6. Define management accounting. Describe the role of management
accounting.
7. Patan Mission Hospitals measure their volume in terms of patient
days, which are defined as the number of patients multiplied by the
number of days that the patients are hospitalized. Suppose a mission
hospital has fixed costs of Rs.4,800,000 per year and variable costs
of Rs.6,00 per patient days. Daily revenues vary among classes of
patients. For simplicity, assume that there are two classes:[1] self-
pay patients, who pay an average of Rs 1,000 per day and [2] non-
self pay patients, who are the responsibility of insurance company
and government agencies and who pay an average of Rs 8,00 per
day. 20% of the patients are self-pay.
Required:
a) Compute the break-even point in patient- days.
b) Suppose that 20,000 patient-days were achieved. Compute the net Group - C
income. Comprehensive Question
c) If 25% of the patient-days were self-pay instead of 20%. Compute the Answer the following question. (20 x 1 = 20)
Breakeven point. 10. XYZ Manufacturing Company has following information related to
a product:
8. Cost at two different levels are as follows: Year Production Sales Sales Price Per Unit
Output in units 3,000 5,000 2008 1,70,000 units 1,40,000 units Rs.25
Direct material (Rs) 15,000 25,000 2009 1,40,000 units 1,60,000 units Rs25
Direct labour 30,000 50,000 Normal production 1,50,000 units
Manufacturing overhead 16,000 20,000 Fixed production cost Rs. 7,50,000
Office overhead 8,000 10,000 Variable cost per unit:
Selling overhead 3,500 4,500 Direct materials Rs. 5
Selling price 25 25 Direct labour Rs. 6
Required: Variable production cost Rs. 4
Flexible Budget for 4,000 units and 6000 units by showing profit. Selling and administrative cost:
Variable 5% of sales
9.a) The following data of a company for a year are given below: Fixed Rs. 3,25,000
Fixed cost Rs 2,00,000 Required:
Net profit Rs40,000 (a) Income statement under variable costing for 2008 and 2009.
Profit volume Ratio 60% (b) Income statement under absorption costing for 2008 and 2009.
Variable cost Rs 4
(c) Reconciliation statement.
Required:
(i) Amount of sales made during the year
(ii) Selling price per unit *ALL THE BEST*
(iii)Required sales for earning Rs 5,200 Net profit
b) Write gross income shown by absorption was Rs. 10,000 for the first
year .In the same year, variable costing shows less Rs. 20,000 than
absorption costing .But in the second year, the variable costing
shows more profit of Rs. 20,000 than absorption costing. The fixed
manufacturing cost per unit is Rs.4 each and variable Rs.6 each. The
closing stock for first years was 5000 units and it was nil in the
second year. The sales units for the first and second year were 5,000
units and 15,000units respectively.
Required:
Reconciliation table to explain the difference in net income
reporting.