DECEMBER 2010 EXAMINATION
FM11
FINANCIAL & MANAGEMENT ACCOUNTING
Content
Time: Three Hours Maximum Marks: 100
NOTE : The paper is divided into two sections: Section A and Section B. There are seven questions
in Section A. Students are required to attempt any four questions from Section A. Question No. 8
(Section B) is compulsory. Each question carries 20 Marks.
SECTION – A
1. Write a detailed note on the Objectives of Management Accounting. Also mention the advantages
and limitations of Management Accounting. (20)
2. What do you understand by Cash Flow Statement? How are the three financial statements (Balance
Sheet, Profit and Loss Account and Cash Flow Statement) related with each
other. (20)
3. Prepare common size statement analysis from the following table:
(20)
4. Jhunjhunwala Ltd. produces a machine part, for which the monthly demand is 4000 units. The
product requires a component X which is purchased at Rs. 20/-. For every finished product, one unit
of the component is required. The ordering cost isI Rs. 120/- per order and the holding cost is 10%
p.a.
You are required to calculate:
(i) Economic order quantity
(ii) The minimum lot size to be supplied is 4,000 units. What is the extra cost, the company has
to incur?
(iii) What is the minimum carrying cost which the company has to incur? (6+7+7)
FM11/December10/Page 1 of 2
5. Calculate the earnings of a worker under Halsey System and Rowan System. The relevant data
given are:
Time rate per hour = Re. 0.6
Time allowed = 8 hours
Particulars 2008 (Rs.) 2009 (Rs.)
Sales 40,000 48,000
Miscellaneous Income 400 320
Total 40,400 48,320
Material consumed 22,000 25,920
Wages 6,000 8,160
Factory expenses 4,000 4,320
Office expenses 1,800 2,000
Interest 2,000 2,400
Depreciation 2,800 3,000
Profit 1,800 2,520
Total 40,400 48,320
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Time taken = 6 hours
Time saved = 2 hours. (20)
6. (i) What are preconditions for installation on uniform costing system? (5)
(ii) What are objectives of uniform costing? (5)
(iii) Following data are given for a firm:
Fixed cost Rs 3,00,000
Variable cost per unit Rs 20
Selling price per unit Rs 30
Calculate
(a) PV Ratio
(b) Break point (value) using PV Ratio (5+5)
7. (i) What is traditional costing system? What are its limitations?
(ii) What is Activity Based Costing System? Differentiate it with activity-based management?
(10+10)
SECTION - B
8. CASE STUDY
Agrawal Industries Ltd has a standard variable manufacturing cost of Rs.8 per unit produced. Fixed
production costs are Rs.1,10,000 per month (for standard volume of 11,000 units per month) and
fixed selling and administrative expenses are Rs.70,000 per month. The firm begins January with
no inventories and had the following activity in January, February and March:
The selling price was Rs.30 per unit in each month.
You are required to prepare monthly income statements using both variable and absorption costing
methods. You are also required to account for the difference, if any, in the results reported under
the two methods.
(20)
**************
FM11/December10/Page 2 of 2
January February March
Production (units) 12,000 10,000 11,000
Sales (units) 10,000 11,000 11,000
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FM11
FINANCIAL & MANAGEMENT ACCOUNTING
Content
Time: Three Hours Maximum Marks: 100
NOTE : The paper is divided into two sections: Section A and Section B. There are seven questions
in Section A. Students are required to attempt any four questions from Section A. Question No. 8
(Section B) is compulsory. Each question carries 20 Marks.
SECTION – A
1. Write a detailed note on the Objectives of Management Accounting. Also mention the advantages
and limitations of Management Accounting. (20)
2. What do you understand by Cash Flow Statement? How are the three financial statements (Balance
Sheet, Profit and Loss Account and Cash Flow Statement) related with each
other. (20)
3. Prepare common size statement analysis from the following table:
(20)
4. Jhunjhunwala Ltd. produces a machine part, for which the monthly demand is 4000 units. The
product requires a component X which is purchased at Rs. 20/-. For every finished product, one unit
of the component is required. The ordering cost isI Rs. 120/- per order and the holding cost is 10%
p.a.
You are required to calculate:
(i) Economic order quantity
(ii) The minimum lot size to be supplied is 4,000 units. What is the extra cost, the company has
to incur?
(iii) What is the minimum carrying cost which the company has to incur? (6+7+7)
FM11/December10/Page 1 of 2
5. Calculate the earnings of a worker under Halsey System and Rowan System. The relevant data
given are:
Time rate per hour = Re. 0.6
Time allowed = 8 hours
Particulars 2008 (Rs.) 2009 (Rs.)
Sales 40,000 48,000
Miscellaneous Income 400 320
Total 40,400 48,320
Material consumed 22,000 25,920
Wages 6,000 8,160
Factory expenses 4,000 4,320
Office expenses 1,800 2,000
Interest 2,000 2,400
Depreciation 2,800 3,000
Profit 1,800 2,520
Total 40,400 48,320
Page 1 of 2 1
27-12-2012 file:///D:/Data%20Retrival%20-%20Abdul%20Jalil/Abdul%20Jalil%20-%20New/D%20...
Time taken = 6 hours
Time saved = 2 hours. (20)
6. (i) What are preconditions for installation on uniform costing system? (5)
(ii) What are objectives of uniform costing? (5)
(iii) Following data are given for a firm:
Fixed cost Rs 3,00,000
Variable cost per unit Rs 20
Selling price per unit Rs 30
Calculate
(a) PV Ratio
(b) Break point (value) using PV Ratio (5+5)
7. (i) What is traditional costing system? What are its limitations?
(ii) What is Activity Based Costing System? Differentiate it with activity-based management?
(10+10)
SECTION - B
8. CASE STUDY
Agrawal Industries Ltd has a standard variable manufacturing cost of Rs.8 per unit produced. Fixed
production costs are Rs.1,10,000 per month (for standard volume of 11,000 units per month) and
fixed selling and administrative expenses are Rs.70,000 per month. The firm begins January with
no inventories and had the following activity in January, February and March:
The selling price was Rs.30 per unit in each month.
You are required to prepare monthly income statements using both variable and absorption costing
methods. You are also required to account for the difference, if any, in the results reported under
the two methods.
(20)
**************
FM11/December10/Page 2 of 2
January February March
Production (units) 12,000 10,000 11,000
Sales (units) 10,000 11,000 11,000
Page 2 of 2 1
27-12-2012 file:///D:/Data%20Retrival%20-%20Abdul%20Jalil/Abdul%20Jalil%20-%20New/D%20...
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