Alagappa University 2007 B.Com MANAGEMENT ACCOUNTING - Question Paper

DISTANCE EDUCATION
B.Com. DEGREE EXAMINATION, DECEMBER 2007.
MANAGEMENT ACCOUNTING
(Upto 2004)
Time : 3 hours Maximum : 100 marks
part A — (5 x eight = 40 marks)
ans any 5 ques..
1. Explain Accounting Ratio. elaborate the uses of Accounting Ratios?
2. What are the areas where marginal costing is useful in management decision making?
3. What are the advantages of Budgetary Control?
4. Ram companies supplies the subsequent informations
for 31.12.2004
Cash sales — Rs. 80,000
Credit sales — Rs. 2,00,000
Return inward — Rs. 10,000
Opening stock — Rs. 25,000
Closing stock — Rs. 30,000
Gross profit ratio — 25%.
Find out Inventory Turnover Ratio.
5. You are provided the subsequent Balance Sheet.
Balance Sheet
Liabilities Assets
1993 1994 1993 1994
B/P 7,000 4,500 Cash 3,000 4,700
Capital 20,000 25,000 B/R 12,000 11,500
Retained Land 5,000 6,600
earnings 1,000 2,300 Stock 8,000 9,000
28,000 31,800 28,000 31,800
Prepare a statement of modifications in Working Capital.
6. A company is expecting to have Rs. 25,000 cash in hand on 1.4.2004. Prepare a cash budget for April to June 2004.
Month Sales Purchases Wages Expenses
Rs. Rs. Rs. Rs.
February 70,000 40,000 8,000 6,000
March 80,000 50,000 8,000 7,000
April 92,000 52,000 9,000 7,000
May 1,00,000 60,000 10,000 8,000
June 1,20,000 55,000 12,000 9,000
Other info :
(a) Period of credit allowed by suppliers two months
(b) 25% of sales is for cash and credit period allowed to customers – one month
(c) Lag in payment of wages and expenses – one month
(d) Income tax Rs. 25,000 is to be paid in June 2004.
7. A Radio manufacturing company obtains that, it costs
Rs. 6.25 to produce a component. The identical is available in the market at Rs. 4.85. The breakdown of cost is :
Material — Rs. 2.75/unit
Labour — Rs. 1.75
Other variables — Re. 0.50.
Depreciation and other fixed cost — Rs. 1.25
Should you make or buy?
8. Cash inflows of a project and with outflows are provided beneath :
Year Cash inflow
(Rs.) Cash outflow
(Rs.) Pv factor at 10%
1 20,000 1,50,000 0.909
2 30,000 30,000 0.826
3 60,000 – 0.751
4 80,000 – 0.683
5 30,000 – 0.621
The scrap value at the end of fifth year is Rs. 40,000. compute net current value.
part B — (4 × 15 = 60 marks)
ans any 4 ques..
9. Explain pay back method of Capital Budgeting. Also define the merits and demerits.
10. Explain the steps involved in the preparation of cash flow statement.
11. Bring out the differences ranging from the cost accounting and management accounting.
12. The subsequent are the ratios extracted for the year ended 31st December, 1999.
Draw up the balance sheet.
Current liabilities — 1.0
Current assets — 2.5
Working capital — Rs. 3,00,000
Liquid ratio — 1.5
Stock turnover ratio — 6
Gross profit ratio — 20%
Debt collection period — 2 months
Share capital — Rs. 5,00,000
Reserves — Rs. 2,50,000
Fixed assets turnover — 2
13. The sales and profit figures of 2 years are provided beneath :
Year Sales Profit
2004 1,50,000 20,000
2005 1,70,000 45,000
You are needed to compute :
(a) Pv ratio
(b) Break even point
(c) Sales needed to earn a profit of Rs. 40,000
(d) Margin of safety at a profit of Rs. 50,000
(e) Profit when sales are 2,50,000.
14. Prepare a flexible budget for 50% and 70% capacity.
Particulars 60%
Fixed overhead :
Depreciation 16,500
Insurance 4,500
Salaries 15,000
Variable overheads :
Indirect materials 6,000
Indirect labour 18,000
Semi-variable overheads :
Electricity (40% fixed) 30,000
Maintenance (80% fixed) 3,000
Total 93,000
15. Prepare a cash flow statement of Kumar :
Particulars 1st Jan. 2005
Rs. 31st Dec. 2005
Rs.
Cash 5,000 4,000
Debtors 40,000 45,000
Stock 30,000 25,000
Land 30,000 40,000
Building 50,000 55,000
Machinery 70,000 80,000
Total 2,25,000
2,49,000


Current liabilities 35,000 40,000
Loan from Shankar — 25,000
Bank loan 40,000 30,000
Capital 1,50,000
1,54,000

Total 2,25,000 2,49,000
During the year Kumar brought an additional capital
of 10,000.
His drawings were 31,000. Provision for depreciation
on machinery, Opening balance — 30,000, Closing balance — 44,000. No depreciation for other assets.

Earning:   Approval pending.