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

(e) Company policies regarding the authorization of transactions. (1mark)
(e) Company policies regarding the authorization of transactions. (1mark)

32.Which of the subsequent statements is false with respect to target costing?
(a) Target costing is a customer oriented technique
(b) Target costing requires market research to determine the customer’s perceived value of
the product based on its functions and attributes
(c) The maximum advantage of adopting target costing is when it is deployed at the product’s
selling stage
(d) A major feature of target costing is that a team approach is adopted to achieve the target cost
(e) Target costs are conceptually various from standard costs. (1 mark)

33.Sumit Ltd., has furnished the subsequent info relating to different costs at a capacity level of 6,300
units:
The budgeted production cost per unit, at the level of 7,500 units, is
Particulars Rs.
Prime cost 79,380 (100% variable)
Power 20,685 (85% variable)
Administration overheads 16,800 (25% variable)
Depreciation 21,000 (100% fixed)
(a) Rs.18.55
(b) Rs.19.07
(c) Rs.20.95
(d) Rs.21.40
(e) Rs.22.85. (2marks)

34.Which of the subsequent is not the reason of Material Price Variance?
(a) Failure to take advantage of cash discount
(b) Buying substitute materials at various prices
(c) Excessive shrinkage or loss in transit
(d) Purchasing non-standard lots and the consequent reduction in volume discount
(e) Rigid inspection resulting in more rejections requiring additional materials for rectification. (1 mark)

35.Rohit Ltd., has furnished the subsequent info relating to its production department for a period:
The overhead cost variance is
true overhead costs Rs.37,400
Standard hours for true work 13,200 hours
true hours during the period 13,500 hours
Standard overhead rate Rs.2.75 per hour
(a) Rs.1,100 (Adverse)
(b) Rs.1,100 (Favorable)
(c) Rs. 825 (Adverse)
(d) Rs. 275 (Adverse)
(e) Rs. 275 (Favorable). (2marks)

36.Which of the subsequent info is needed by the Corporate Management?
(a) Capacity utilization
(b) Rejections and complaints
(c) Sales quantity and price realization

Earning:   Approval pending.