SRI BALAJI UNIVERSITY, PUNE

MBA – FIRST SEMESTER TERM END EXAMINATION

BATCH: 2020 – 2022
MANAGEMENT ACCOUNTING

Time: 3 Hrs
Date: 19th Jan. 21 Marks: 75
Instructions to the Students:
 Kindly answer all questions/case studies in the question paper.
 All Questions/case studies carry Equal Marks
 Format in which the Answer sheets is to be submitted is as follow:
A. Use MS word
B. Time New Roman, Font size 12
C. Kindly number each page
D. Please do not copy the questions.
 The cover page of the Answer sheets must be in the below format.

 Roll no-
 Name of institute-
 Batch-
 Specialization-
 Semester-
 Subject Name -
 Submitted by-
 Submitted on date-
 Total no of pages written-

 Students must remain online with their camera on and voice on unmute mode through out
the examination.

 The time mentioned above is for answering the questions only, an additional 30 min has
been allocated for submission of answer sheet in to the MS Teams App folder.

1. (a)

(i) Explain the important ratios in detail that would be used in each of the
following situations. (6 Marks)

1. A long term creditor interested in determining whether his claim is

adequately secured.

1
 2. A shareholder who is examining his portfolio and who is to decide
whether he should hold or sell his holding in the company.

3. A finance manager is interested to know effectiveness with which a

firm uses its available resources.

(ii) Sahil Bros. Kolhapur, Purchased a Machinery on 1st April 2018 for Rs
47,000 and spent Rs 3,000 for its installation. On 1st October 2018 additional
Machinery Costing Rs 5,000 was purchased. On 1st July 2019 the Machinery
purchased. On 1st October 2018 was sold for Rs 3,000 and on the same date new
Machinery was purchased for Rs 12,000.
They decided to provide to depreciation @ 10% p.a. under Straight Line Method
on 31st March every year. Prepare Machinery Account and Depreciation Account
for 3 years only. (4 Marks)

(b) From the following particulars you are required to prepare a statement showing
(i) The Cost of Materials Consumed, (ii) Prime Cost, (iii) Works Cost, (iv) Total Cost, (v)
The Percentage of Works Overheads to Productive Wages, and (f) The Percentage of
General Overheads to Works Cost: (15 Marks)

Particulars Rs.
Stock of finished goods on 1-1-2012 72,800
Stock of Finished Goods on 31-12-2012 78,000
Stock of Raw Materials on 1-1-2012 33,280
Stock of Raw materials on 31-12-2012 35,360
Purchases of Raw materials 7,59,200
Works Overhead Charges 1,29,220
Productive Wages 5,16,880
Office and General Expenses 70,161
Sales of Finished Goods 15,39,200

The company is about to send a tender for a large plant. The Costing Department estimated
that the materials required would cost Rs. 52,000 and the wages to workmen for making
the plant would cost Rs.31,200. The tender is to be made at a net profit of 20% on the
selling price. Show what the amount of tender would be if based on the above percentages.

2. (a) From the following Balance sheet of Mr. Zen, Prepare a cash flow statement as per
AS-3 for the year ended 31.3.2019 (15 Marks)

2
 Balance sheets of Mr. Zen

Liabilities As on 1.4.2018 Rs. As on 1.4.2019 Rs.

Zen’s Capital A/C 10,00,000 12,24,000

Trade Payables 3,20,000 3,52,000
Mrs. Zen’s loan 2,00,000 --
Loan from Bank 3,20,000 4,00,000

18,40,000 19,76,000

Assets As on 1.4.2018 Rs. As on 1.4.2019 Rs.

Land 6,00,000 8,80,000

Plant & Machinery 6,40,000 4,40,000
Inventories 2,80,000 2,00,000
Trade receivables 2,40,000 4,00,000
Cash 80,000 56,000

18,40,000 19,76,000

Additional Information:

A machine costing Rs. 80,000 (accumulated depreciation there on Rs. 24,000) was sold for
Rs. 40,000. The provision for depreciation on 1.4. 2018 was Rs. 2,00,000 and 31.3.2019
was Rs. 3,20,000. The net profit for the year ended on 31.3.2019 was Rs. 3,60,000.

(b) CT Ltd. provides you the following information: (10 Marks)

Production Capacity Cost & Sales Cost & Sales

(Rs. in Lakhs) (Rs.in Lakhs)
At 80% At 60%
Direct Material 2.00 1.50
Direct Labour 2.00 1.50
Direct Expenses 1.60 1.20
Production Overheads 4.00 3.85
Administrative Overheads 4.00 3.80
Selling & Distribution Overheads 4.00 3.75
Sales 20.00 15.00
Draw up a Flexible Budget showing profits at 90% capacity

3. (a) From the following particulars, find the most profitable Product – mix and prepare
a statement of profitability of that Product-mix. (10 Marks)

3
Particulars Product – A Product – B Products - C
Budgeted Production (units) 4,000 5,000 1,500
Selling Price/unit (Rs.) 60 55 50
Requirement/unit:
Direct Material (kg) 5 3 4
Direct Labour (Hours) 4 3 2
Variable Overhead (Rs.) 7 13 8
Fixed Overhead (Rs.) 5 10 15
Cost of Direct Material/kg (Rs.) 4 4 4
Direct Labour hour-rate (Rs.) 2 2 2

All the 3 Products are produced from the same Direct Material, using the same type of
Machines and Labour. Direct labour is the key-factor, which is limited to 18,600 Hours.

(b) (i) From the following information of Punjab Traders Ltd, prepare the
statement of proprietary fund of the company.

 Capital turnover ratio 2 times

 Fixed assets turnover ratio 3 times
 Gross profit ratio 25%
 Stock velocity 6 times
 Debt collection period 4 months
 Average payment period 2 months

There are no long term debts.

The Gross profit is Rs. 60,000, Reserves and surplus are Rs. 20,000. Closing stock
is Rs. 6,000 less than the opening stock and closing debtors are Rs. 10,000 higher
than the opening debtors. Make necessary assumptions that you think appropriate.
(10 Marks)
(ii) The following figures are related to LM limited for the year ending 31 st
March 2020
Sales – 24000 units @ Rs. 200 per unit (5 Marks)
Profit volume ratio 25% and Breakeven point 50% of Sales

Calculate:

(a) Fixed cost for the year

(b) Profit earned for the year
(c) Units to be sold to earn a target net profit of Rs.11,00,000 for a year
(d) Number of units to be sold to earn a net income of 25% on cost
(e) Selling price per unit if Breakeven Point is to be brought down by
4000 units.