Adikavi Nannaya University (ANU) 2007 B.B.M Management - Question Paper

Management
March 2007
Time: three Hours
Marks: 100
NB:

1. ques. No. one is compulsory and carries 20 marks.
2. Attempt any 5 questions, every carrying 16 marks from remaining ques..
3. Working notes should form part of your ans.
4. Proper presentation and neatness is essential.

* Q.1 Amruta Enterprises (having Installed capacity of 2, 00,000 units p.a.) produced 1,00,000 units in the financial year2006-2007. The cost - structure in 2006 - 2007 was as under: 20
*
(a) Raw Materials 40%
(b) Wages 15%
(c) Factory Overheads 10%
(d) Administrative and Selling Overheads 15%
Total cost

80%
20%
(e) Profit 100


The selling price, which was Rs. 500 per unit in 2006-2007, is estimated to be fixed as at Rs. 600 per unit forthe year 2007-2008; and production and sale expected to increase by 40,000 units. It is, further, anticipated that raw materials cost per unit would increase by 10% due to price rise, whereas wage rate per unit would reduce by 20% due to automation, 56% of all the overheads are fixed and balance are variable.
* As a Management Accountant you are needed to prepare:-
* (a) Cost statement for the year 2007-2008 and
* (b) Statement showing estimated working capital needed for the year 2007-2008 after considering the subsequent additional information:
* (a) Raw materials stock equivalent to 2 and half month’s consumption would be stored.
* (b) Production time is 1 month. Raw materials are introduced at the beginning of the process, whereas wages and factory overheads accrue evenly during the production period.
* (c) 2 months stock of finished goods (valued at factory cost) would be carried in stock.
* (d) 20% of raw materials would be imported from China and advance payment of 2 months would be made there against. 15% of indigenous raw materials requirement would be procured locally against immediate cash payment. Suppliers of balance of indigenous raw materials, allow a credit of 1 month.
* (e) 50% of customers would enjoy a credit of 1 month, whereas balance 50% of customers would accept a bill of exchange payable after 3 months. These bills of exchange are immediately hypothecated with the bank against which overdraft facility would be available equal to 70% of amount of bills of exchange.
* (f) Time - lag in payment of wages would be 1 month and for all overheads, it would be half month.
* (g) The company would carry cash balance of Rs. 40,000 in its currency chest. Debtors are to be estimated at selling price.
* (h) The activities are spread evenly throughout the year. Degree of completion of work-in-progress is 50%.

Earning:   Approval pending.