Management Accounting

managment accounting Dr. T.K. Jain. AFTERSCHOOOL M: 9414430763 [email protected] www.afterschool.tk www.afterschoool.tk

You have received an order for 10 reams @ 1800 per reams. Ink and other material will cost you Rs. 5000. Other consumables are Rs. 3000. Your fixed costs are Rs. 500000. You are manufacturing Reams and many other products. Should you accept order? 

You are getting Rs. 18000. Your variable costs are Rs. 8000. You hare able to save Rs. 10000 and your contribution per unit is 1000 Rupees per ream = it is positive. Definitely you must accept the order. Leave calculation of fixed costs for the time being – as you are already running many factories. (answer). www.afterschoool.tk

You have a customer who demands 6 months credit. You have 20% margins. Your customer has assured that they will buy in future also and their purchase will increase @ 20% per annum. Bank will charge 16% interest on Cash Credit facility & 15% on bill discounting. What will you do? (there is no possibility of bad debt).  

Let us assume that you are selling goods costing Rs. 100 – at Rs. 120. Interest on Rs. 100 for 6 month is Rs. 8 and if you go for bill discounting, it will cost you Rs. 9. In any case you get benefit Rs.20 – Rs. 8 = Rs. 12 thus you must provide credit facility to customer. In the years to come sale will increase so you will get more beneifts in the years to come. www.afterschoool.tk

Annual sales rs. 24000, direct costs Rs. 4.6 overheads = 52800 selling commission = 15%. Targetted profit .102 per unit. What should be selling price?  Let us assume price to be X.  Total sales Rs. 24000X (qty* price per unit)  Total costs(Variable costs: 110400  Fixed cost = 52800  Selling expenses = 3600X  Profit = 24480 (1.02*24000)  Making an equation: (total sales = costs+profit)  24000X = 110400+3600X+52800+24480  20600X=187680  X =9.11 answer www.afterschoool.tk

You have to collect Rs. 100000 from your debtor after 6 month. You have to make settlement and get the money today. Bank’s interest rate is 12% p.a. How much money will take from your friend today in final settlement?  =94339

now  As it is the present worth of this amount  Calculation is : 100000/1.06

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Direct costs are Rs. 48. 10% output is defective and has to be sold at 10% off the normal price. Scrap realised you Rs. 9000. You have to earn 15% on sale price. What should be your normal price? (sale=1lakh units)  Your

cost is 48*100000=4800000 – 9000  =4791000. 10000 units are defective.  Total sale prize realised is:  90000X + 10000 (.9X) = 100/85 (4791000)  99000X = 5636470  X = 56.94 Rs. www.afterschoool.tk

You have to give quotation for next 5 years. Your material costs will increase 20% p.a., labour costs will increase 5% p.a. overheads will increase at inflation rate. Selling expenses will remain same. Present costs are : (per unit): Material 20, labour 40, Overhead 2000000, selling expenses 20% of price. Annual output = 30000 units (will increase @ 10% p.a.). Inflation 10% p.a. Profit=5%on cost  Present

cost: (1800000+2000000+.2*30000x)*1.5 =30000X  3800000*1.5 + .3*30000X = 30000X  21000X=3800000*1.5  X=271.42 answer. www.afterschoool.tk

Formulae of Barth Premium Plan?  Hourly

rate * Square root of (Std. Hours * actual hours).

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Flux method of labour turnover calculation? 

(No. of separations+ no. of replacements) / average no. of workers

100

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*

What is EOQ?  Economic

order quantity

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What is ordering cost?  Cost

incurred per order – including transportation, shipping, stationery and other expenses.

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Holding costs?  These

are the costs that are incurred in retaining inventory – including interest to be paid to bank for credit availed, spoilage, wastage of goods, obsolescence etc.

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At which point will you place order for purchase of goods?  Reorder

level .

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Mention 3 methods of incentive payments to workers? Bedaux Taylor Rowan Halsey Emerson, Diemer Group incentive plan, Baum incentive plan Accelerating premium system Barth Etc. www.afterschoool.tk

Mention 2 types of responsibility centres?  Cost

centre  Profit centre  Investment centre  Expense centre

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Mention 3 methods of depreciation calculation?  Straight

line  Written down value method  Unit per hour method  Production unit method  Sinking fund method  Revaluation method  Renewal method www.afterschoool.tk

Mention 3 types of errors in accounting?  Error

of commission  Error of omission  Error of principle  Compensating error  Error in balancing

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ABOUT AFTERSCHOOOL Afterschoool conducts three year integrated PGPSE (after class 12th along with IAS / CA / CS) and 18 month PGPSE (Post Graduate Programme in Social Entrepreneurship) along with preparation for CS / CFP / CFA /CMA / FRM. This course is also available online also. It also conducts workshops on social entrepreneurship in schools and colleges all over India – start social entrepreneurship club in your institution today with the help from afterschoool and help us in developing society. www.afterschoool.tk

Why such a programme? 

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To promote people to take up entrepreneurship and help develop the society To enable people to take up franchising and other such options to start a business / social development project To enable people to take up social development as their mission To enable people to promote spirituality and positive thinking in the world www.afterschoool.tk

Who are our supporters?  Afterschoolians,

our past beneficiaries, entrepreneurs and social entrepreneurs are supporting us.  You can also support us – not necessarily by money – but by being promotor of our concept and our ideas. www.afterschoool.tk

About AFTERSCHOOOL PGPSE – the best programme for developing great entrepreneurs       

Most flexible, adaptive but rigorous programme Available in distance learning mode Case study focused- latest cases Industry oriented practical curriculum Designed to make you entrepreneurs – not just an employee Option to take up part time job – so earn while you learn The only absolutely free course on internet www.afterschoool.tk

Workshops from AFTERSCHOOOL         

IIF, Delhi CIPS, Jaipur ICSI Hyderabad Branch Gyan Vihar, Jaipur Apex Institute of Management, Jaipur Aravali Institute of Management, Jodhpur Xavier Institute of Management, Bhubaneshwar Pacific Institute, Udaipur Engineering College, Hyderabad www.afterschoool.tk

Flexible Specialisations:          

Spiritualising business and society Rural development and transformation HRD and Education, Social Development NGO and voluntary work Investment analysis,microfinance and inclusion Retail sector, BPO, KPO Accounting & Information system (with CA / CS /CMA) Hospital management and Health care Hospitality sector and culture and heritage Other sectors of high growth, high technology and social relevance www.afterschoool.tk

Salient features:       

    

The only programme of its kind (in the whole world) No publicity and low profile course For those who want to achieve success in life – not just a degree Indepth knowledge and expertise Professional approac: World class approach Strong intellectual and business capabilities Flexible – you may stay for a month and continue the rest of the education by distance mode. / you may attend weekend classes Scholarships for those from poor economic background Latest and constantly changing curriculum – keeping pace with the time Placement for those who are interested Admissions open throughout the year Latest and most advanced technologies, books and study material www.afterschoool.tk

Components 

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Pedagogy curriculum and approach based on IIM Ahmedabad and ISB Hyderabad (the founder is alumnus from IIMA & ISB Hyderabad) Meditation, spiritualisation, and self development Essential softwares for business Business plan, Research projects Participation in conferences / seminars Workshops on leadership, team building etc. Written submissions of research projects/articles / papers Interview of entrepreneurs, writing biographies of entrepreneurs Editing of journals / newsletters Consultancy / research projects Assignments, communication skill workshops Participation in conferences and seminars Group discussions, mock interviews, self development diaryng Mind Power Training & writing workshop (by Dr. T.K.Jain)

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Pedagogy          

Case analysis, Articles from Harvard Business Review Quiz, seminars, workshops, games, Visits to entrepreneurs and industrial visits Presentations, Latest audio-visuals Group discussions and group projects Periodic self assessment Mentoring and counselling Study exchange programme (with institutions out of India) Rural development / Social welfare projects www.afterschoool.tk

Branches  AFTERSCHOOOL

will shortly open its branches in important cities in India including Delhi, Kota, Mumbai, Gurgaon and other important cities. Afterschooolians will be responsible for managing and developing these branches – and for promoting social entrepreneurs.

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Case Studies  We

want to write case studies on social entrepreneurs, first generation entrepreneurs, ethical entrepreneurs. Please help us in this process. Help us to be in touch with entrepreneurs, so that we may develop entrepreneurs.

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Basic values at afterschoool        

Share to learn more Interact to develop yourself Fear is your worst enemy Make mistakes to learn Study & discuss in a group Criticism is the healthy route to mutual support and help Ask fundamental questions : why, when, how & where? Embrace change – and compete with yourself only www.afterschoool.tk

www.afterschoool.tk social entrepreneurship for better society

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