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Program BBA Year: H Sem:`s`t:`':;```+rS ``,i.::1:,`=`=j;:+us

Subject: Management Accounting Batch: 2020-2023

Date : 23 April 2022 Time:12.30 pin -2.30 pin (2 hrs)

Marks: 50 No. of pages: 05-

FINAL EXAMINATION
1. All questions are compulsory
2. All types ofcalculators are allowed
3. Figurestothe right indicate full marks

Q.1 (a) Expenses for the production of 5000 units at 50 % capacity in Neha Chemicals Ltd., Mumbai
are given as below: .

Particulars Unit Cost (Rs.)

Materials
502015

wages
Variable Overheads
Fixed Overheads (Rs. 50,000) 10

Administrative Expenses (95 % Fixed) 10

Selling Expenses (20 % Fixed)

6

Distribution Expenses (90 % Variable)

5

Total cost of sales 116

You are asked to Prepare a budget for 70 % and 90 % production capacity, assuming that at 90 % capacity, cost
of material will increase by 10 % whereas labour cost will decrease by 5 9/o. (10 marks)

Q.1(b)MonologCompanyattainssaleofRs,8,00,000at80%ofitsnormalcapacityanditsexpensesaregiven
below:

Particulars

Administration costs:
80,000
Office salaries
2 % of Sales
General expenses
17,500
Depreciation

Distribution costs:

Rent

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Preparefiexjbleadministration&distributioncostspudget,operatingat90%andl00%ofno,r.mrl_
 ¢

Q 2) Jain Components Linited produces an auto component by blending two metals Iron and Copper. It
operates standard costing system and the following standards have been set for producing the components.

Standard price per

Material Standard Mix kg.
Iron 40% Rs. 4.00
Copper 60% RI. 3.00

The standard loss in processing is 15% of total input.

During January 2022, the company produced 3 ,400 components of finished output. The.position of
stocks and purchase of raw material is as under-

Stock on 1.1.2022 Stock on 31.1.2022 Purchased during January 2022

Material
K2S. Kgs. Kgs. RI.
Iron 70 10 1600 6,800
Copper 80 100 2400 6,000

You are required to calculate. Material variances (10 marks)

Q 3) (a) Precise Vision Ltd manufactures two types of spare parts "Alpha" and "Bravo" for
CIAT Cars. The production capacity of the company can accommodate the production of any
one spare part for a particular period of time. The following are the cost and other information
for the production of the two different spare parts Alpha and Bravo:
Per Uult Alph`a Bravo
Raw Material consuniption 2kgs 2.5 kgs
Direct Wages €20 €10
Machine Time : Machine X 3 0 minutes 45 minutes
Machine Y 36 minutes 30 minutes
Sale Price €160 €175
Total hours available: ................................ Machine X - 5,000 hours
Machine Y - 5,200 hours
Raw material available is 15,000 kgs. @ € 10 per kg.
Variable overheads per machine hours: ....... Machine X -€ 70
Machine Y - € 80
Required
(i) Identify the spare part which will optimize contribution at the offered price.
(ii) If CIAT Cars offers € 25 per hour of unutilized machine hours to Precise Vision provided
it reduces the sale price by 10% of the.spare part identified in (a) above, should the offer be
accepted? (10 marks)

a) Royal Exports Ltd sells its product at € 45 per unit. During the quarter ending 31 st March,
it produced and sold 24,000 units and suffered a loss of € 15 per unit. If the volume of sales is
raised to 60,000 units, it can Cam a profit of € 12 per unit. You are required to calculate:

(i) BEP in Rupees.

(ii) Profit if sales volume is 75,000 units.
(iii)Minimuni level of production where the Company need not to close the production if
unavoidable Fixed cost is € 4,00,000. (5 marks)

2L£
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Q4)VidyutLinritedcanproduce400000unitsofaproductat100%capacity.Thevariable
productioncostsareRs50perunitandtheVariablesellingexpensesareRsl5perunitsold.
TheBudgetedfixedproductionoverheadswereRs36,00,000p.a.andtheFixedselling
expenseswereRs12,00,000.Duringtheyearended31stMarch,2021thecompanyworkedat
90%ofitscapacity.Thefollowingdatafortheyearisavatable:

360000 units280000units
Units produced
Units sold at Rs 85 per unitOpeningstock
50000units dfi d ellin ex enses

Fixedproductionoverheadsare absorbedonthebasis ofcapacity an Ke s g parerecoveredasaperiodcost.Openingstockmaybevaluedatthecurentyear'srateonly.+

ActualFixedoverheadexpensesincuredfortheyearwasRs33,00,000.Calculatetheprofit
fortheyearended31StMarch,2021.

A) On the basis of Absorption costing

(10 marks)
a) On the basis of Marginal costing