NOBEL COLLEGE
(Pokhara University Affiliate)
Sinamangal, Kathmandu
Final assessment 2
Level: Bachelor Semester – Sring Year : 2005
Programme: BCIS Full Marks : 100
Course: Management Accountancy Time : 3hrs.
Candidates are required to give their answer in their own words as far as practicable
The figures in the margin indicate full marks.
Attempt all the questions
1. a) What do you mean by mixed cost? Explain with suitable examples. [8]
b) Break – even analysis is the specific way of presenting and studying the inter relationship between cost-volume and profit. Discuss. [7]
2. Birat match factory has provided the following data relating to operation for the year ending 2003. [15]
Installed capacity (in boxes) 100,000
Normal capacity 75,000
Production during the year 80,000
Sales in boxes 75,000
Ending inventory 6,000
Selling price per unit Rs. 10
Variable manufacturing cost per unit Rs.7
Fixed factory overhead for the period Rs. 75,000
Marketing and administrative expenses:
Variable per box of sales Rs. 0.5
Fixed marketing expenses for the period Rs.37,000
Required:
i. Income statement under variable costing
ii. Income statement under absorption costing
iii. Reconciliation statement so as to explain the cause of the difference between absorption & variable costing.
3. a) A firm has fixed costs of Rs. 10,000. The variable costs in manufacturing each unit of product are direct materials Rs. 4, direct labour Rs. 6.5 & variable overheads Rs. 2.5. The current selling price is Rs. 20 per unit. [3+2+3 =8]
Required:
i. The break-even point in units & value
ii. The break- even point if material cost increase by Rs. 1
iii. What would be the operating income if 2,000 units were sold?
b) Explain the causes why the net profit ascertained under absorption costing will not agree with that under marginal costing? (7)
4. The cost for 10,000 units of product is given below:
Direct material........................................................................................................................ Rs.40,000
Direct wages............................................................................................................................ Rs.60,000
Direct expenses...................................................................................................................... Rs.20,000
Repairs and maintenance.................................................................................................... Rs.12,000
Insurance................................................................................................................................ Rs.15,000
Additional information:
i. The difference in cost for repair and maintenance is Rs.0.05 per unit between 10,000 and 9,000units.
ii. Insurance cost at 9,000units volume amounted to Rs.14,000
Required: Flexible Budget for 12,000units. (15)
5. A limited company prepares business budget to exercise control over operation. The sales & purchase figures for
recent month and expected for next month are as follow
recent month and expected for next month are as follow
Sales for (Rs.) | Purchase for (Rs.) | ||
Baishakh | 200,000 | Jestha | 175,000 |
Jestha | 300,000 | Ashadh | 300,000 |
Ashadh | 350,000 |
Credit sales are 30% of total sales, 50% sales are collected in the following month & balance 50% in the next following month of sales. All purchases are credit purchases, payable in the following month of purchases. Bank loan due for Ashadh is Rs.60,000 and interest due Rs.6,000. Depreciation for Ashadh Rs.10,000, wages due for Ashadh but payable next month Rs.50,000 & other expenses due payable in Ashadh Rs.60,000 cash balance on 31st Jestha Rs.50,000.
Required:
Cash budget showing cash receipt & cash disbursement for the month of Ashadh. (15)
6. Following information are extracted from the financial statement of Progressive Ltd.
Progressive Ltd.
Balance sheet as on March 31st
20X1 20X2
Fixed Assets (net off Depreciation)................................ 400,000...................... 450,000
Inventory............................................................................ 125,000...................... 150,000
Accounts receivable.......................................................... 65,000........................ 50,000
Cash .................................................................................... 40,000........................ 50,000
Total Assets......................................................................... 630,000...................... 700,000
Equity share capital ........................................................ 100,000...................... 100,000
Debentures......................................................................... 200,000...................... 200,000
Retained profit.................................................................. 150,000...................... 200,000
Sundry creditors................................................................ 90,000...................... 100,000
Bills payable...................................................................... 40,000........................ 50,000
Outstanding wages............................................................. 20,000........................ 30,000
Accrued taxes..................................................................... 30,000........................ 20,000
Total liabilities and owners equity............................... 630,000...................... 700,000
Income statement for 20X2
Details Amounts
Sales ..................................................................................................... ................... 10,00,000
Cost of goods sold:............................................................ 500,000....................................
Administrative and selling expenses....................... 150,000....................................
Depreciation........................................................................ 30,000....................................
Interest......................................................................... 20,000...................... 700,000
Net income before taxes............................................................ ...................... 300,000
Income tax expenses................................................................. ...................... 150,000
Net income after taxes..................................................................... ...................... 150,000
Required:
Prepare cash flow statement (using direct method for operating activities section) (15)
7. a) The standard material and standard cost per kg of material required for the production of 500 units of product X are
as follows:
as follows:
3,000kgs of material, standard price per kg Rs.5. The actual production and related material data are as follows:
§ Actual production 500kgs of product X
§ Material used 3,200kgs
§ Actual price of material Rs.4.50 per kg.
Required: Calculate: (10)
a) Material cost variance
b) Material price variance
Material usage variance (using tabulation approach)
Or
b) Write short notes on: (5x2=10)
i) Component of Master Budget
II) Semi Varriable cost and it’s segregation
II) Semi Varriable cost and it’s segregation
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