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IMT – 58: MANAGEMENT ACCOUNTING - MT2
PART – A
Q1. State three points of similarities between financial accounting and cost accounting.
Q2. Prepare a chart showing the different elements of cost.
Q3. What is cost centre and does it related to cost units.
Q4. What is the difference between allocation and apportionment of overheads?
Q5. Discuss the importance of machine hour rate as a basis for the absorption of factory overheads.
PART – B
Q1. Give four points essential of job costing.
Q2. Describe briefly the main features of process costing. Name the industries where process costing can be applied. Also compare process costing with job costing.
Q3. What is absorption costing? Give the main limitations of absorption costing.
Q4. Define cost-volume profit analysis and explain its main features.
Q5. From the following particulars, calculate all material variances.
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Standard
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Actual
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Qty. Kgs.
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Price
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Qty. Kgs.
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Price
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A
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10
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8
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10
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7
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B
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8
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6
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9
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7
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C
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4
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12
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5
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11
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PART – C
Q1. Distinguish between
a. Budgetary control and standard costing
b. Standard cost and standard costing
c. Standard costing and estimated costing
d. Basic standard and current standard
Q2. Compare and contrast differential cost analysis and marginal costing.
Q3. A product passes through three processes. During March, 2011, 1,000 finished units are produced with the following expenditure:
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Process A (Rs.)
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Process B (Rs.)
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Process C (Rs.)
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Direct Material
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1,500
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2,600
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2,600
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2,000
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Direct Labour
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5,000
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4,000
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4,000
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3,000
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Overhead expenses amounted in all to Rs. 6000. They are to be apportioned on the basis of direct wages. Main raw materials issued to Process A (besides above) were worth Rs. 6,000. Ignoring the question of stock prepare the Process Accounts concerned.
Q4. From the following particulars calculate (i) Contribution (ii) P/V Ratio (iii) Break even point in units and in rupees. (iv) What will be the selling price per unit if the break even point is brought down to 25, 000 units?
Fixed expenses Rs.2,50,000
Variable cost per unit Rs. 12
Selling price per unit Rs.18
Q5. Define the term ‘budget’ as used in cost accounting, and explain what is meant by ‘budgeting control’.
FOURTH SET OF ASSIGNMENTS Assignment-IV = 2.5 Each Case Study
CASE STUDY – I
Two manufacturing companies which have the following operating details decided to merge:
Company No. 1 Company No.2
Capacity utilization (%) 90 60
Sales (Rs. lakhs) 540 300
Variable costs (Rs. lakhs) 396 225
Fixed costs (Rs. Lakhs) 80 50
Assume that the proposal is implemented, calculate:
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Break even sales of the merged plant and the capacity at that stage.
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Profitability of the merged plant at 80% capacity utilization.
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Sales turnover of the merged plant to earn profit of Rs. 75 lakhs.
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When the merged plant is woking at a capacity t earn a profit of Rs. 75 lakhs what percentage increase in selling price is required to sustain an increase of 5% in fixed overheads.
CASE STUDY – II
The cost sheet of a product is given as follows:
Rs.
Direct Materials 10
Direct Wages 5
Factory overheads
Fixed 1
Variable 2
Administration expenses 1.5
Selling & Distribution Overheads
Fixed 0.5
Variable 1
__________
21
__________
The selling price per unit is Rs. 25. The above figures are for an output of 50,000 units whereas the capacity of the firm is 60,000 units. A foreign customer is desirous of buying 10,000 units at a price of Rs. 19 per unit. The extra cost of exporting the product is Re. 0.5 per unit. Advise the manufacturer as to whether the order should be accepted.
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