Acharya Nagarjuna University (ANU) 2006 B.Com Part II - Commerce, III - ADVANCED MANAGEMENT ACCOUNTING - - Question Paper

part C - (3 X 20 = 60 marks)
ans any 3 of the subsequent ques..
All ques. carry equal marks.

13. Balance Sheet of A and B on first January 2005 and 31st December 2005 were as follows:

Balance Sheet

Liabilities 1.1.2005 31.12.2005 Assets 1.1.2005 31.12.2005
Rs. Rs. Rs. Rs.
Creditors 40,000 44,000 Cash 10,000 7,000
Mrs. A.s loan 25,000 -------- Debtors 30,000 50,000
Loans from bank 40,000 50,000 Stock 35,000 25,000
Capital 1,25,000 1,53,000 Machinery 80,000 55,000
Land 40,000 50,000
Buildings 35,000 60,000

2,30,000 2,47,000 2,30,000 2,47,000

During the year a machine costing Rs.10,000 (accumulated depreciation Rs.3,000) sold for Rs.5,000. The provision for depreciation against machinery as on 1.1.2005 was Rs.25,000 and on 31.12.2005 Rs.40,000. Net profit for the year 2005 amounted to Rs.45,000. You are needed to prepare cash flow statement.

14. XYZ Company manufactures a product ABC by mixing 3 raw materials. For every 100 kg of ABC, 125kg of raw materials are used. In April, 2005, there was an output of 5,600 kg of ABC. The standard and true particulars of April 2005 are as follows:
Standard Actual
Raw material Mix Price/kg Mix Price/kg
I 50 40 60 42
II 30 20 20 16
III 20 10 20 12

compute all variances.

15. The budgeted outcomes of A Co. Ltd. include.
Product Sales value P/V ratio
Rs.
A 50,000 50%
B 80,000 40%
O 1,20,000 30%

Fixed overheads for the (year) period Rs.1,00,000

The directors are worried about the outcomes of the Company. They have requested you to prepare a statement showing the amount of loss expected and recommend a change in the sales of every product or in total mix which will eliminate the expected loss.

16. The subsequent info relates to the productive activities of G Ltd. for 3 months ended 31.12.2005:
Rs.
Fixed expenses:
Management salaries 2,10,000
Rent and Taxes 1,40,000
Depreciation on machinery 1,75,000
Sundry office expenses 2,22,500

7,47,500

Semi-Variable expenses at 50% capacity:
Plant maintenance 62,500
Indirect labour 2,47,500
Sales men.s salaries 72,500
Sundry expenses 65,000

4,47,500

Variable expenses at 50% capacity:
Materials 6,00,000
Labour 6,40,000
Salesmen.s commission 95,000

13,35,000

It is further noted that semi-variable expenses remain constant ranging from 40% and 70% capacity, increase by 10% of the above figures ranging from 70% and 85% capacity and increase by 15% of the above figures ranging from 85% and 100% capacity. Fixed expenses remain constant whatever the level of activity may be. Sales at 60% capacity are Rs.25,50,000 ; at 80% capacity Rs.34,00,000 and at 100% capacity Rs.42,50,000. Assuming that all items produced are sold, prepare a flexible budget at 60% ; 80% and 100% production capacity.

17. The subsequent are the summarised Balance Sheets of M/s. Vivek Ltd. on 31.12.2004 and 31.12.2005:
Balance Sheet
31.12.2004 31.12.2005 31.12.2004 31.12.2005
Liabilities Rs. Rs. Assets Rs. Rs.

Share Capital 12,00,000 16,00,000 Plant and Machinery
Debentures 4,00,000 6,00,000 (at cost) 8,00,000 12,90,000
P & L a/c. 2,50,000 5,00,000 Land and Buildings
Creditors 2,30,000 1,80,000 (at cost) 6,00,000 8,00,000
Provision for: Stock 6,00,000 7,00,000
Bad and Doubtful Debts 12,000 6,000 Bank 40,000 80,000
Depreciation on Land Preliminary Expenses 14,000 12,000
and Buildings 40,000 48,000 Debtors 1,38,000 1,22,000
Depreciation on Plant
and Machinery 60,000 70,000

21,92,000 30,04,000 21,92,000 30,04,000

Additional information:

(a) During the year, a part of machinery, costing Rs.1,40,000 (accumulated depreciation there on Rs.4,000) was sold for Rs.12,000.

(b) Dividend for Rs.1,00,000 was paid during the year.

Ascertain:
(i) change in working capital for 2005.
(ii) funds flow statement for 2005.

18. The subsequent info is received from the books of Mehta & Co.:
Normal overhead rate Rs.3
true hours operated 20,000
Allowed hours for true production 21,000
Allowed overheads for budgeted hours Rs.70,000
true overheads Rs.72,000

Calculate:

(a) Overhead budget variance
(b) quantity variance
(c) Efficiency variance
(d) Capacity variance and
(e) Total overhead cost variance.

Earning:   Approval pending.