INSTRUCTION 

a. Write answers in your own words as far as possible and refrain from copying from the text 

b. Answers of Ist Set (Part-A), IInd Set (Part-B), IIIrd Set (Part – C) and Set-IV (Case Study) must be sent 

c. Mail the answer sheets alongwith the copy of assignments for evaluation & return. 

d. Only hand written assignments shall be accepted. 

A. First Set of Assignments: 5 Questions, each question carries 1 marks. 

B. Second Set of Assignments: 5 Questions, each question carries 1 marks. 

C. Third Set of Assignments: 5 Questions, each question carries 1 marks. Confine your answers 

D. Forth Set of Assignments: Two Case Studies : 5 Marks. Each case study carries 2.5 marks. 

to 150 to 200 Words. 

FIRST SET OF ASSIGNMENTS Assignment-I = 5 Marks 

ASSIGNMENTS 

PART– A 

1. Management accounting is an extension of financial accounting. Explain.  

2. “All controllable costs are direct costs. Not all direct costs are controllable.” Explain with the 

3. LIFO is acceptable, because it makes use of historical cost; replacement cost is not acceptable 

because  it  adjusts  cost  figures  to  a  value  that  is  not  related  to  the  amount  paid  for 

them.”Explain this point of  view for dealing with the problem of  changes  in the purchasing 

power of money. How would match the cost of non‐current assets with current revenue? 

4. A  company  has  three  production  departments  and  two  service  departments.  Distribute 

summary of overheads is as follows: 

Production departments:  Rs.  

A  25000 

B  20800 

C  25400 

Service departments:   

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X  12400 

Y  4500 

The expenses of service departments are charged on  a percentage basis, which is as follows; 

Department  A  B  C  C  Y 

X  30  30  30  ‐  10 

Y  25  30  25  20   

Apportion the cost of service departments by using the repeated distribution method. 

5.  What is meant by under/over absorption of factory overheads? How will you account for them 

in cost accounts? Does it bear any impact while submitting quotations? 

SECOND SET OF ASSIGNMENTS Assignment-II = 5 Marks 

PART– B 

1. How does ABC differ from activity‐based management? 

2. The following details are available in respect of a small tool manufacturing firm; 

  Annual estimated demand per year (Unit)    1,600 

  Cost of production per unit        Rs. 5  

  Carrying costs per unit for one year      Re.1 

  Setting up cost per batch         Rs. 50  

3. What is meant by ‘equivalent units’? Discuss its importance in valuing work in progress.  

4. Distinguish  between  marginal  costing  and  absorption  costing.  Also,  examine  their  relative 

5. Discuss the importance of the following in relation to break‐even analysis. 

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THIRD SET OF ASSIGNMENTS Assignment-II = 5 Marks 

PART– C 

1. What do you understand by terms budget and budgetary control? What are the advantages in 

2. Explain why a decision centre should be treated as a profit centre rather than as a cost centre. 

3. What is the significance of term “variance” relating to standard costing? What types of variances 

4. What  is  an  opportunity  cost? When  do  opportunity  costs  affect short run  decisions? What 

accounting problems do opportunity costs involve? 

5. The “volume‐cost‐profit relationships provide management with a simplified framework for 

organizing its thinking on a number of problems.” Discuss. 

FOURTH SET OF ASSIGNMENTS Assignment-IV = 2.5 Each Case Study 

    Year   1     Year 2 

Sales   Rs. 2,00,000    Decrease in sales price and  decrease in fixed costs  

CASE STUDY - I 

are the only changes.  

M/S Ratio  25%       40% 

P/V Ratio  33‐1/3%     30% 

a.  Decreased sales amount in 2nd year. 

b.  Decreased fixed cost in 2nd year . 

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CASE STUDY-II 

A Ltd.  Makes a product which passes through two processes before it is completed and transferred to 

finished stock.  The following data related to the month of December.  

Direct Materials   15,000 15,750 0

Factory overheads   10,500 4,500 0

Particulars   Process‐1(Rs. ) Process‐2(Rs.) Process‐3(Rs.)

Opening stock   7,500 9,000 22,500

Direct wages   11,200 11,250 0

Closing stock   3,700 4,500 11,250

Out of the process I is transferred to process II at 25% profit on the transfer price. Output of process II is 

transferred to finished stock at 20% profit on the transfer price. Stocks in process are valued at prime 

cost. Finished stock is valued at the price at which it is received from process II. Sales during the period 

Prepare process cost account and finished goods showing the profit element at each stage.  

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