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

52.The variance created to segregate the difference due to a new factor like a steep rise in price of
material, is known as
(a) Revision variance
(b) Uncontrollable variance
(c) Price variance
(d) Favorable variance
(e) Efficiency variance. (1 mark)

53.Consider the subsequent data pertaining to a company for the month of March 2008:
The capacity ratio of the company for the month was
Budgeted hours 318
true hours 297
Maximum possible hours in the budget period 345
Standard hours for true production 325
(a) 108.5%
(b) 102.5%
(c) 93.4%
(d) 91.4%
(e) 86.1%. (2marks)
(e) 86.1%. (2marks)

54.Yadav Ltd., manufactures product-N which requires 2 raw materials – A and B. It had produced 325
units in the month of March, 2008. The company has furnished the subsequent standard data per unit and
true cost and consumption in the month of March, 2008:
The total material usage variance was
Material
Standard per unit true
Qty (kg) Rate (Rs.) Qty (kg) Rate (Rs.)
A four 16.00 1,245 15.58
B three 30.00 1,020 29.65
(a) Rs.400 (Adverse)
(b) Rs.400 (Favorable)
(c) Rs.470 (Adverse)
(d) Rs.470 (Favorable)
(e) Rs.650 (Adverse). (2marks)

55.Which of the subsequent statements is false in relation to a budget?
(a) Direct labor budget represents direct labor requirements necessary to produce the kinds and
volumes of output planned in the production budget
(b) An inventory budget can be prepared to obtain out the values of direct materials and
finished inventory
(c) A fixed budget is a budget that is prepared for a range, i.e. for more than 1 level of
activity
(d) A direct materials budget shows the expected amount of direct materials needed to
produce the budgeted units of finished goods
(e) Direct budgeted labor costs consist of wages of employees who are engaged directly in
specific production output. (1 mark)

56.Consider the subsequent details pertaining to Govind Ltd., for the month of March 2008:
The return on investment for the month of March 2008 was 16%. In the month of April 2008, it is
expected that the selling price will increase by 3% and all costs will be decreased by 5%. The return on
investment for the month of April 2008 will be

Earning:   Approval pending.