R5 302 Mba Cost And Management Accounting

R5 Code No: R5-302/MBA M.B.A. III-Semester Examinations, December-2007. COST AND MANAGEMENT ACCOUNTING Time: 3 hours

Max. Marks: 60 Answer any FIVE questions All questions carry equal marks ---

1.

What are the general principles which you as a cost controller should keep in mind while you set costing system?

2.

Explain the following: a) Cost of tools b) Cost of receiving and handling material c) Blanket rate d) Comprehensive machine hour rate.

3.

A work order passes through two distinct processes. The product of the first process less wastage and by-product, becomes the raw materials for the second process. All by-products are sold off direct from factory. The following information is obtained from the factory records :

Details Raw Materials Wages Factory overhead Wastages Sales of by-products

First Process 1,00 tonnes at Rs. 30 a tonne Rs. 25,00 80% of wages 10 tonnes 190 tonnes at cost plus 20%

Second Process __

Rs. 20,000 75% of wages 15 tonnes 85 tonnes at cost plus 25%

Give the Ledger accounts for the first and second processes, showing at each stage the cost of the product and the profit on the sale of the by-products. Contd….2

Code No: R5-302/MBA

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4.

A factory engaged in manufacturing plastic buckets is working at 40% capacity and produces 10,000 buckets per annum. The present cost break-up for one bucket is as under: Material Rs.10 Labour cost Rs.3 Overhead Rs.5 (60% fixed) The Selling Price is Rs.20 per bucket. If it is decided to work the factory at 50% capacity, the selling price falls by 3%. At 90% capacity, the selling price falls by 5% accompanied by a similar fall in the prices of material. You are required to calculated the profit at 50% and 90% capacities.

5.

What is contribution analysis ? Explain its significance in cost volume profit analysis.

6.

What is Zero Based Budgeting ? State the requirements for application of Zero Based Budgeting.

7.

In a manufacturing concern, the standard time fixed for a month is 8,000 hours. A standard wage rate of Rs.2.25 paise per hour has been fixed. During one month, 50 workers were employed and average working days in a month are 25. A worker works for 7 hours in a day. Total wage bill of the factory for the month amounts to Rs.21,875. There was a stoppage of work due to power failure (idle time) for 100 hours. Calculate various labour variances.

8.

Discuss the need and objectives of inter firm comparison. ---