Subject Code: IMT-58

Subject Name : Management

Accounting
INSTRUCTION

a. b. c. d. A. B.

Write answers in your own words as far as possible and refrain from copying from the text books/handouts. Answers of Ist Set (Part-A), IInd Set (Part-B), IIIrd Set (Part C) and Set-IV (Case Study) must be sent together. Mail the answer sheets alongwith the copy of assignments for evaluation & return. Only hand written assignments shall be accepted. First Set of Assignments: Second Set of Assignments: 5 Questions, each question carries 1 marks. 5 Questions, each question carries 1 marks. 5 Questions, each question carries 1 marks. Confine your answers to 150 to 200 Words. Two Case Studies : 5 Marks. Each case study carries 2.5 marks.

C. Third Set of Assignments: D. Forth Set of Assignments:

ASSIGNMENTS
FIRST SET OF ASSIGNMENTS Assignment-I = 5 Marks

PART A
1. 2. 3. Managementaccountingisanextensionoffinancialaccounting.Explain. All controllable costs are direct costs. Not all direct costs are controllable. Explain with the helpofsuitableexamples. LIFO is acceptable, because it makes use of historical cost; replacement cost is not acceptable because it adjusts cost figures to a value that is not related to the amount paid for them.Explain this point of view for dealing with the problem of changes in the purchasing powerofmoney.Howwouldmatchthecostofnoncurrentassetswithcurrentrevenue? A company has three production departments and two service departments. Distribute summaryofoverheadsisasfollows: Productiondepartments: A B C Servicedepartments: ManagementAccounting Page1of4 Rs. 25000 20800 25400 IMT58

4.

X Y

12400 4500

Theexpensesofservicedepartmentsarechargedonapercentagebasis,whichisasfollows; Department A B C C Y X 30 30 30 10 Y 25 30 25 20 Apportionthecostofservicedepartmentsbyusingtherepeateddistributionmethod. 5. What is meant by under/over absorption of factory overheads? How will you account for them incostaccounts?Doesitbearanyimpactwhilesubmittingquotations?
Assignment-II = 5 Marks

SECOND SET OF ASSIGNMENTS

PART B
1. HowdoesABCdifferfromactivitybasedmanagement? 2. Thefollowingdetailsareavailableinrespectofasmalltoolmanufacturingfirm; Annualestimateddemandperyear(Unit) Costofproductionperunit 1,600 Rs.5 Re.1 Rs.50

Carryingcostsperunitforoneyear Settingupcostperbatch DetermineEOQ.

3. Whatismeantbyequivalentunits?Discussitsimportanceinvaluingworkinprogress. 4. Distinguish between marginal costing and absorption costing. Also, examine their relative appropriateness. 5. Discusstheimportanceofthefollowinginrelationtobreakevenanalysis. ManagementAccounting Page2of4 IMT58 a. Breakevenpoint b. MarginofSafety c. Contribution d. Profitvolumeratio

THIRD SET OF ASSIGNMENTS

Assignment-II = 5 Marks

PART C
1. 2. 3. What do you understand by terms budget and budgetary control? What are the advantages in yourownorganization? Explainwhyadecisioncentreshouldbetreatedasaprofitcentreratherthanasacostcentre. Whatisthesignificanceoftermvariancerelatingtostandardcosting?Whattypesofvariances arecomputedfor? a. Material b. Labour,and c. Factoryoverheads. What is an opportunity cost? When do opportunity costs affect short run decisions? What accountingproblemsdoopportunitycostsinvolve? Thevolumecostprofitrelationshipsprovidemanagementwithasimplifiedframeworkfor organizingitsthinkingonanumberofproblems.Discuss.
Assignment-IV = 2.5 Each Case Study

4. 5.

FOURTH SET OF ASSIGNMENTS

CASE STUDY - I
Sales M/SRatio P/VRatio Required: a. Decreasedsalesamountin2ndyear. b. Decreasedfixedcostin2ndyear. c. NewProfitin2ndyear. d. NewBEPin2ndyear. 331/3% 30% 25% 40% Year 1 Year2 Decreaseinsalespriceanddecreaseinfixedcosts aretheonlychanges. Rs.2,00,000

ManagementAccounting

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CASE STUDY-II
A Ltd. Makes a product which passes through two processes before it is completed and transferred to finishedstock.ThefollowingdatarelatedtothemonthofDecember. Particulars Process1(Rs.) Process2(Rs.) Process3(Rs.) Openingstock 7,500 9,000 22,500 DirectMaterials 15,000 15,750 0 Directwages 11,200 11,250 0 Factoryoverheads 10,500 4,500 0 Closingstock 3,700 4,500 11,250 Interprocessprofit 1,500 8,250 includesinopeningstock OutoftheprocessIistransferredtoprocessIIat25%profitonthetransferprice.OutputofprocessIIis transferred to finished stock at 20% profit on the transfer price. Stocks in process are valued at prime cost. Finished stock is valued at the price at which it is received from process II. Sales during the period wereRs.1,40,000. Prepareprocesscostaccountandfinishedgoodsshowingtheprofitelementateachstage.

ManagementAccounting

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