Symbiosis International Education Centre 2008 M.B.A Business Administration Management accounting - Question Paper

Indirect materials are generally included in factory overhead budget. Statements (a), (c), (d)
and (e) are true, while (b) is false, hence the accurate ans is (b).
22. C The variable cost per unit = Rs.12,375 ÷ 750 units = Rs.16.50.
The least price, (e) Rs.11 and (d) Rs.13.50 are beneath variable cost (Rs.16.50), so it is not
acceptable. The other costs exceed variable cost per unit, but Rs.17 per unit is the least
acceptable price in the provided options, it is acceptable. Therefore, the ans is (c).
23. D McGregor’s Theory X is based on the conception that ‘The avg. human being has an
inherent dislike of work and will avoid it if he can’. Because of this human characteristic of
dislike for work most people must be coerced, controlled and directed towards the
achievement of goal. choice (b) is incorrect as this theory is based on the principles that the
avg. human being does not inherently dislike work. choice (c) is incorrect as it is set
forth hierarchy of human needs. choice (a) and (e) are not related to the ques. asked.
Therefore, (d) is accurate.
24. B If the company purchases from the market, the avoidable unit cost = (Direct material +
Direct wages + Variable manufacturing overheads + Variable selling overheads to the extent
reduced) ÷ 3,250 = (Rs.26,650 + Rs.17,550 + Rs.16,575 + 30% of Rs.19,500) ÷ 3,250
= Rs.60,775 + Rs.5,850 = Rs.66,625 ÷ 3,250 =Rs.20.50.
25. E
Particulars Amount in Rs. Or
% on Sales
(Rs.)
Sales 6,00,000
Selling Costs :
Salaries seven % of sales 42,000
Traveling expenses three % of sales 18,000
Sales Office two % of sales 12,000
General expenses one % of sales 6,000
Distribution costs :
Wages 21,000 21,000
Rent two % of sales 12,000
Other expenses three % of sales 18,000
Total of Selling and distribution expenses 1,29,000
26. C
Total cost of 3,600 units = Rs.260.40 × 3,600 units + Rs.1,12,170 + Rs.17,125
= Rs.9,37,440 + Rs.1,29,295 = Rs.10,66,735
Cost per unit = Rs.296.32
Particulars Rs.
Direct materials 3,80,000
Direct labor 3,10,000
Manufacturing overheads 74,780
Selling and administrative overheads 68,500
Total variable cost 8,33,280
Per unit variable cost 260.40
27. A
needed production of finished
goods
37,500 units
Raw material per unit × three kg

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