Financial Management - II

CSIMHAlEven12nd SemIMHA-206/2014
2014
Financial Management - II
TimeAlloted : 3 Hours Full Marks: 70
The figure in the margin indicate full marks.

Candidates are required to give their answers in their
own words as far as practicable
GROUP-A
1. Answer any ten questions :- 10x1=10

i) The budget which considers estimates at different levels of
activities is:
a) Cash budget b) Master budget
c) Flexible budget d) Fixed budget
ii) Contribution per unit is Rs. 100. Fixed cost is Rs. 6,00,000.
Production and sales are 8000 units. Total contribution is:
a) Rs. 6,00,000
b) Rs. 4,00,000
c) Rs. 8,00,000
d) Can not be determined with given data
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CS/MHAlEven/2nd Sem/MHA-206/2014
iii) Marginal costing considers

a) Contribution = variable cost + Fixed cost
b) Fixed cost = Contribution + Profit
c) Profit = Contribution - Fixed cost
d) None of the above
iv) Activity based costing

a) Is more precise in allocating overheads than
conventional costing
b) Is more complex in comparison to conventional
costing
c) Both of the above
v) Prime cost does not include

a) Direct material & Direct labour
b) Indirect expenses
c) Direct material only
d) Direct labour only
vi) Depreciation on plant & machinery is considered as a part of

a) Administrative overhead
b) Works overhead
c) Selling & distribution overhead
vii) Each of the following would affect the break-even point

except a change in the
a) Number of units sold b) Variable cost per unit
c) Sales price per unit d) Total fixed cost
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viii) The net claim of Equity Shareholders to the company is

known as
a) Internal Equity b) External Equity
c) Both a) and b) d) None of these
ix) The technique of Budgeting where no reference has been

found for Formulation of Budget is known as
a) Master Budget b) Zero-based Budgeting
c) Production Budget d) None of these
x) Th difference betweenplanned cost and actual cost is termed as

a) Standard Costing b) Variance
c) Both a) and b) d) None ofthese
xi) The no profit no loss point in Cost-Volume-Profit Analysis is

termed as
a) Break--even Point b) CVP point
c) Margin of Safety d) none of these
xii) The formula of Margin of Safety is:-

a) Sales-Contribution
b) Actual sales - Sales at Break--even Point
c) Profit/Contribution
d) Both b) and c)
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CS/MHAIEven/2nd Sern/MHA-206/2014
GROUP-B
Answer any three questions :- 5x3=15
2. Classify the following costs as direct or indirect costs: (5)

a) Wood in making furniture
b) Depreciation of hospital equipments
c) The floor manager's salary in a hospital
d) Glue used in book binding shop
e) Medicines used for treatment of a patient in hospital
3. Write short notes on Zero based budgeting.
4. Briefly compare the differences between mergers and

amalgamations.
5. What is CVP analysis?
6. Discuss briefly how budgets can be used as planning and controlling

tool.
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CS/MHA/Even/2nd Sem/MHA-206/2014
GROUP-C
Answer any three questions ;-
15x3=45
7. a) The selling price of a tour package is Rs. 20,000. The variable

cotss are Rs. 8,000 per costomer, The total fixed costs are Rs. 50,000.
Calculate the following ;
i) The number of packages to be sold to break - even
ii) Volume of sales required to break - even
Sales required at a desired profit of Rs. 1,00,000
iii) Profit when sales is Rs. 10,00,000
iv) Margin of safety at the above level of sales.
b) What is Variance Analysis? What are its objectives?
(10+5)
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8. A company has an investment opportunity costing Rs.40000 with the

following expected net cash flow (after tax but before depreciation)
Year Net Cash Flow
1 7000
2 7000
3 7000
4 7000
5 7000
6 8000
7 1‫סס‬00
8 15000
9 1‫סס‬00
10 4000
Using 10% as the cost of capital determine the following
i) Pay-Back Period
ii) NPV at 10% discounting factor
iii) Profitability Index at 10% DISCOUNTING FACTOR
iv) IRR with the help of 10% discounting factor and 15%
discounting factor
Present value factors table
v- i 2 3 4 5 6 7 8 9 10
10% 0.909 0.826 0.751 0.683 0.621 Q.564 0513 0A67 0.424 0.386
1!1'/o 0.897 0.756 0.658 0.572 0.497 0A32 D.376 0.327 0.284 0247
9. a) What is Service costing? Give examples of two industries, other

than hospital industry, which use service costing and briefly discuss
the units for charging customers in these industries? (5)
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b) Briefly discuss the various cost elements that goes into
consideration while costing the service cost in a corporate hospital,
indicating the nature of such costs (directlindirect). (10)
10. a) Define Break - even point, Contribution, and Profit-volume ratio.

(5)
b) The following information pertains to the budget of Quantity
Products Ltd. for the next year: (10)
Sales : Rs. 500,00,000
Variable Expenses : Rs.45O,00,000
Fixed Cost : Rs.3O,00,000
Calculate the expected net profit for each of the following
independent cases:
i) 10 percent increase in sales volume
ii) 10 percent increase in fixed cost
iii) 10 percent increase in variable expenses
iv) 10 percent decrease in sales volume
v) 15 percent increase in fixed cost and 10 percent decrease in
variable expenses
11. Write short notes on any three: (15)

a) Cost Control.
b) Activity based costing

c) Marginal costing vs. Absorption costing
d) Different elements of cost
e) Stores Ledgers.
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CSIMHAlEven12nd SemIMHA-206/2014

TimeAlloted : 3 Hours Full Marks: 70

The figure in the margin indicate full marks.

1. Answer any ten questions :- 10x1=10

9197 1 [Turn over]

iii) Marginal costing considers

iv) Activity based costing

v) Prime cost does not include

vi) Depreciation on plant & machinery is considered as a part of

vii) Each of the following would affect the break-even point

viii) The net claim of Equity Shareholders to the company is

ix) The technique of Budgeting where no reference has been

x) Th difference betweenplanned cost and actual cost is termed as

xi) The no profit no loss point in Cost-Volume-Profit Analysis is

xii) The formula of Margin of Safety is:-

9197 3 [Turn over]

2. Classify the following costs as direct or indirect costs: (5)

3. Write short notes on Zero based budgeting.

4. Briefly compare the differences between mergers and

5. What is CVP analysis?

6. Discuss briefly how budgets can be used as planning and controlling

7. a) The selling price of a tour package is Rs. 20,000. The variable

9197 5 [Turn over]

8. A company has an investment opportunity costing Rs.40000 with the

9. a) What is Service costing? Give examples of two industries, other

10. a) Define Break - even point, Contribution, and Profit-volume ratio.

11. Write short notes on any three: (15)

b) Activity based costing

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