R5/NR

Code No: NR/R5-302/MBA

M.B.A. III-Semester Examinations, December-2006.
COST AND MANAGEMENT ACCOUNTING
Time: 3 hours Max. Marks: 60
Answer any FIVE questions
All questions carry equal marks
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1. What do you understand by ‘management accounting’? How is it
different from cost accounting and financial accounting?
Illustrate.

2. Write short notes on any three of the following: (a) Normal and
abnormal losses (b) Margin of safety and angle of incidence
(c) cost audit (d) Zero based budgeting (e) machine hour rate.

3. From the following particulars, prepare

(a) a cost sheet showing (i) the cost of materials consumed
(ii) prime cost (iii) production cost (iv) total cost and
(v) profit.
(b) calculate (i) percentage of production overheads to direct
wages (ii) percentage of general overheads to production cost
and (iii) percentage of profit on sales.
(c) tender given that Direct materials for a given job Rs.50,000
and Direct wages Rs.25,000
Rs.
Stock of raw materials 1.1.2004 30,850
Work in progress 60,850
Purchase of raw materials 1,43,250
Direct wages 1,78,500
Production overhead expenses 1,42,800
General Overhead expenses 1,12,700
Stock of raw materials 31.12.2004 37,700
Work in progress 67,750
Sales for the year 8,60,625

4. Given that
Production and sales: 8,000 units
Selling price per unit Rs.20
Variable cost per unit:
Direct materials Rs.5
Direct labour Rs.2.50
Variable overhead 100% of direct labour cost
Fixed cost Rs.40,000
Find out (a) P/V ratio (b) break even sales (c) margin of safety.
Contd…..2
Code No: NR/R5-302/MBA -2-

5. From the following particulars, compute (a) material cost variance

(b) material price variance and (c) material usage variance:
Quantity of materials purchased 3000 units
Value of materials purchased Rs.90,000
Standard quality of materials required per ton of 30 units
output
Standard rate of material Rs.25 per unit
Opening stock of materials Nil
Closing stock of materials 500 units
Output during the period 80 tons

6. Prepare flexible budget on the basis of the following information for

the year 2004-05:
Particulars Rs.
Direct materials 6,00,000
Direct labour 4,00,000
Direct expenses 2,00,000
Machine expenses 1,00,000
Motive power 1,00,000
Factory Overheads (80% fixed) 80,000
Office overheads (60% fixed) 1,20,000
Selling overheads (50% fixed) 40,000
Sales (selling price being Rs.2,000 per unit) 20,00,000
During the year, all the units produced were sold and the factory
was working at the capacity of 60 per cent. The flexible budget is
to be prepared with the following assumptions:
(a) that the capacity will be 75 percent and
(b) that the price of direct material will increase by 25 percent
and the wages will increase by 20 percent.

7. What do you understand by ‘Management audit’? How do you

conduct management audit? Explain.

8. How do you allocate and apportion overheads? Explain and

illustrate.

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