LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.B.A. DEGREE EXAMINATION – BUSINESS ADMINISTRATION
SUPPLEMENTARY EXAMINATION – JUNE 2009
BU 6603 - MANAGEMENT ACCOUNTING
Date & Time: 25/06/2009 / 10:00 - 1:00 Dept. No.
Max. : 100 Marks
PART A
Answer ALL questions:
Marks:10x2=20
Explain the following:
1. Break Even Point
2. Current Ratio
3. Fund From Operations
4. Zero Based Budget
5. Labour Mix Variance
6. Debt Equity Ratio
7. From the following date calculate Labour Rate and Efficience Variance.
Standard Labour cost per unit 10 hours at Rs. 0.50 per hour. During a week 500 units were produced,
6500 hours were worked and Rs.2400 wages were paid.
8. From the following data calculate PV ratio and Profit:
Sales Rs.20,000; Fixed expenses Rs.4,000; Break even sales Rs.10,000
9. Ascertain change in Working Capital from the following:
Increase in current assets
Rs.12,000
Decrease in current assets Rs.9,000
Increase in current liability Rs.10,000
Decrease in current liability Rs.12,000
10. From the following calculate current Assets and Current Liabilities:
Current ratio 3.5
Liquid ratio 2.5
Working capital Rs.1,00,000
PART B
Answer ANY FIVE questions
Marks: 5x8=40
11. “Marginal costing is a valuable aid in decision making”. Explain.
12. What is Variance Analysis? Explain the various Labour Variances.
13. A Ltd plans to sell 50,000 units of product M in the next year. Two kinds of raw materials A and B are
required to manufacture the product. Each unit of M requires 2 units of A and 3 units of B. The
estimated opening and closing balances of the next year are as follows:
Opening balance
Closing Balance
M
8,000 units
6,000 units
A
12,000 units
13,000 units
B
15,000 units
16,000 units
Prepare a Purchase Budget for the next year.
14. From the following data, calculate GP ratio, Operating Profit Ratio, Operating Ratio, Interest Coverage
Ratio:
Sales Rs.20,00,000
Cost of Goods sold Rs.12,00,000
Office Expenses Rs.60,000
Selling Expenses Rs.40,000
Interest Received Rs.5,000
Loss on sale of Assets Rs.4,000
Interest on debentures Rs.70,100
15. From the following data, calculate Overhead Variances:
Budgeted Fixed Overheads Rs.1,00,000
Budgeted Production 50,000 units
Actual Production 54,000 units
Actual Fixed Overheads Rs.1,20,000
16. From the following information prepare a Balance Sheet:
a) Current ratio
2.5
b) Liquidity ratio
1.5
c) Fixed assets to proprietor’s fund 0.75
d) Working capital
Rs.60,000
e) Reserves and surplus
Rs.40,000
f) Bank overdraft
Rs.10,000
g) There is no long-term loan or fictitious asset.
17. From the following data compute Fund From Operations:
Gross profit Rs.2,15,000
Administration expenses Rs.25,000
Selling expenses Rs.16,000
Depreciation Rs.26,000
Loss on sales of asset Rs.6,000
Goodwill written off Rs.5,000
Discount on issue of Debentures Rs.2,000
Interest on investment Rs.5,000
Profit on sale of machine Rs.4,000
18. R. Ltd produces two products X and Y. Labour is in short supply. The following date relates to the year
2008:
X (Rs.)
Y(Rs.)
Material per unit
40
60
Labour at Rs.2 per hour
20
12
Variable overheads
10
6
Selling price
100
120
Assuming that the maximum labour hours available is 36,000 and a minimum of 900 units of each
product has to be produced, what is the most profitable production mix?
PART C
Answer any TWO questions
Marks:2x20-40
19.
The sales turnover and profit for 2 years are as follows:
Year
Sales(Rs)
Profit (Rs.)
2007
1,40,000
15,000
2008
1,60,000
20,000
Calculate
a) PV ratio
b) Fixed cost
c) Break even sales
d) Sales to earn a profit of Rs.40,000
e) Profit when sales are Rs.1,20,000.
20.
From the following information calculate Material variances:
Standard material cost for the job:
Material X
20 kgs at Rs.5 per kg
Material Y
16 kgs at Rs.4 per kg
Material Z
12 kgs at Rs.3 per kg
Actual material cost for the job:
X
24 kgs at Rs.4 per kg
Y
14 kgs at Rs.4.50 per kg
Z
10 kgs at Rs.3.25 per kg
21.
The Balance Sheet of AB Ltd. as on 31/12/2007 and 31/12/2008 are given below:
2007
(Rs.)
Equity capital 1,00,000
P/L a/c
30,000
General Reserve 30,000
12% Debentures 1,00,000
Creditors
60,000
Tax provision
60,000
---------3,80,000
a)
b)
c)
d)
e)
2008
(Rs.)
1,50,000
70,000
40,000
1,80,000
40,000
90,000
----------5,70,000
Fixed assets
Investments
Stock
Debtors
Bank
2007
(Rs.)
2008
(Rs.)
2,00,000
30,000
60,000
50,000
40,000
3,50,000
60,000
40,000
60,000
60,000
---------4,00,000
---------6,70,000
Depreciation provided on fixed assets during the year 2008 was Rs.60,000
Investments costing Rs.10,000 was sold during the year for Rs.15,000
Tax paid during the year Rs.75,000
Interim dividend paid during the year Rs.20,000
During the year Fixed Assets costing Rs.50,000 (Accumulated depreciation Rs.30,000 ) was sold for
Rs.20,000
Prepare statement showing sources and application of funds.
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