NMIMS (DEEMED UNIVERSITY)

DISTANCE LEARNING

NOVEMBER 2005 EXAMINATION

COST & MANAGEMENT ACCOUNTING

DFM/PGDFM

 

DATE : MARKS: 100

TIME:

3 HOURS

 

WRITE ANY FIVE QUESTIONS.

ALL QUESTIONS CARRY EQUAL MARKS

.

 

Q.1. Write short notes on any THREE.

 

1. Budgetary Control
2. Cost Control
3. Cost Audit
4. Economic Order Quantity

 

Q.2. Differentiate between Cost Accounting and Financial Accounting.

 

Q.3. Kumar Ltds summarized financials are as under:

 

 

	Rs.
Direct Materials	2,05,000
Direct Labour	75,000
Fixed overheads	60,000
Variable Overheads	1,00,000
Sales	5,00,000

 

 

 

Calculate:

1. the breakeven point and margin of safety
2. breakeven point if variable overheads decreases by 10%
3. breakeven point if fixed overheads decrease by 10%

 

 

 

 

 

 

 

Q.4. Sujatha Ltd., has been manufacturing jogging suits for athletes. Currently, its output is around 13300 units per annum. The companys normal production is 20000 units per annum. A particular exporter has approved the sample and has offered to buy 5000 units at a special price of Rs.150 per suit. The suits sell at Rs.210 per piece in the domestic markets. The per unit cost structure is as under:

 

 

	Rs.
Cloth	82
Labour	25
Fixed overhead per unit	42
Admin. Overhead (variable)	11
	160

 

Should the company accept the offer?

 

Q.5. Rahul and Sujatha have a unit each, for manufacturing cricket bats. Details are as under:

 

	Rahul	Sujatha
	Rs. Lakhs	Rs. Lakhs
Sales	300	120
Variable costs	220	90
Fixed overhead	40	20

 

Rahuls unit runs at 100% capacity and Sujathas at 60% capacity. They decide to merge the two units to form Kumar Brothers.

 

1. Calculate for the individual pre-merger status (a) P/V ratio (b) BEP.
2. Calculate the post-merger (a) P/V ratio (b) BEP.
3. Find the profit of the merged firm at 75% capacity.

 

Q.6. Rahul Ltd., makes a single product which sells for Rs.40 each and has a variable cost per unit as follows:

 

	Rs.
Direct materials cost	8
Direct wages (2 hours)	12
Variable overhead	4
	24

 

 

There is heavy demand for the product. The labour force is currently working at full capacity and no overtime work is possible.

 

A customer is willing to pay Rs.11,000 for a special order which will require Rs.4,000 for direct materials and 500 hours of direct labour.

 

Advise the Rahul Ltd., as to whether the special order should be accepted.

 

Q.7. Explain the following terms any Three:

 

1. Activity Based Costing
2. The Balanced Scorecard
3. Target Costing
4. Standard Costing
5. Marginal Costing

 

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