MANAGEMENT ACCOUNTING II (MANAC II)

(Finance Area Core Course for BM Juniors - Jamshedpur Batch)

TERM II (ACADEMIC YEAR 2021-22)

TEST NUMBER I (An Open Book Examination)

Total Marks = 15, Duration = 50 Minutes

SUBMISSION TIME – 09.55 AM on 6th November 2021 (Latest)

The Instructions
In respect of this question paper, a separate answer booklet has been
provided (to be shared before 09.00 AM today) and you have to provide your
answers in the structured format as given in that answer booklet. No
additional sheets should be attached (along with the answer booklet) under
any circumstances whatsoever. In case any student sends any excel sheet or
other documents (as attachments) along with the answer booklet to Ms. Itika
Ganguly - that additional document would simply be “deleted” by Ms. Itika.
Please do not forget to write your full name, your roll number, your date of
birth & your year of birth in the spaces provided in that answer booklet (very
important). You are required to answer both questions. Students may
certainly use calculators, mobile phones, internet, e-mail, whatsapp etc while
writing this examination. In case the workings are not shown clearly in
respect of answers to both questions (as may be applicable), no mark would
be awarded in respect of these questions. While sending the answer sheets
(duly filled in) to Ms. Itika (as an e-mail attachment) latest by 09.55 AM
today there is absolutely no need to mark a copy (of that e-mail) to me.

E-Mail id of Ms Itika is itika@xlri.ac.in

Question No I (Maximum Marks = 05)
(You are required to provide your answer in the answer booklet in the structured format as given)

During the previous year, SCORING OPPORTUNITY LIMITED recorded sales of Rs

X and incurred a loss amounting to Rs Y. During the current year the said company
recorded sales of Rs 1.25 X and earned profit amounting to Rs Y. You are required to
compute the “Margin of Safety” of the company (in Rs) that pertains to the current year.

ADDITIONAL INFORMATION

While solving the above question please take X = Last digit of your roll number *
100000. For example – if your roll number is 94, X = 4 * 100000 = Rs 4.00 Lakhs.
However, in case the last digit of your roll number is either “0” or “1”, please take it as
10. Meaning – in case your roll number is 120 (say) or 71 (say), X = 10 * 100000 = Rs
10.00 Lakhs.

While solving the above question please take Y = Last digit of your date of birth * 2000.
For example – if your date of birth is 14th, Y = 4 * 2000 = Rs 8,000. However, in case the
last digit of your date of birth is either “0” or “1”, please take it as 10. Meaning – in case
your date of birth is 30th (say) or 21st (say), Y = 10 * 2000 = Rs 20,000.

Question No II (Maximum Marks = 5 + 3 + 2 = 10)

(You are required to provide your answers in the answer booklet in the structured format as given)

METHODICAL APPROACH LIMITED is a cent percent equity financed company

exempted from income taxes. On an average the said company earns ROI of 30% every
year. They compute ROI applying the formula “Profit before tax UPON Average
Investments” (expressed in percentage). “Average Investments” (as mentioned above) is
computed applying the formula ½ (Opening Investments + Closing Investments).

Present output details of a manufacturing department of the company is as under.

Average Output per week 1.00 Lakh units from 200 workers
Weekly sales of the above output Rs 12.50 Lakhs
Contribution generated per week Rs 5.00 Lakhs
Number of weeks (in an year) this department actually operates 50 weeks

Continued to the next page……………

The company management plans to introduce more mechanization into the department by
buying a small machine costing Rs X which will have a useful life of 3 years (with zero
salvage value). The effect of this investment would be to reduce the number of workers to
150 and increase the output per individual worker by 60%. In order to provide the
necessary incentive to achieve such increased output, the company management intends to
offer a 1% increase in the existing piece work rate of Rs Y per unit (that is currently being
paid to the workers) for every 10% increase in average individual output achieved (by the
workers). In case the company buys this new machine, the company would also reduce the
selling price per unit (of their product) by 4% (on an overall basis).

ADDITIONAL INFORMATION

While solving the above question please take X = Your year of birth * 150. For example
– if your year of birth is 1995, X = 1995 * 150 = Rs 299250.

While solving the above question please take Y = ½ (Last digit of your date of birth). For
example – if your date of birth is 14 th, Y = 4 / 2 = Rs 2.00. However, in case the last digit
of your date of birth is either “0” or “1”, please take it as 10. Meaning – in case your date
of birth is 30th (say) or 21st (say), Y = 10 / 2 = Rs 5.00.