Question Bank

Management Accounting (BBA 207) Theory & Numerical Unit (1,2,3,4)

1What are standard cost?how material variance and labour variance help in decision making with
example?

2Explain responsibility accounting and zero based budgeting .

3 What is the difference between income statements of marginal costing and absorption costing with
imaginary figures?

4 Define Management Accounting .discuss its objective,scope and limitation.

5 ‘’Cost Accounting is a system of foresight like pre-natal care ,but Financial Accounting is just a post-
mortem examination’’ critically examine this statement.

6 Briefly explain DU-Pont Analysis with the help of DU-Pont chart.

7 ‘’Accounting ratios are mere guides and complete reliance on them in decision making is suicidal’’
Elucidate

8 How are ratios classified? Elaborate any four with example.

9 ‘’The term financial Accounting and Management Accounting are not precise descriptions of the
activities they comprise. Despite their close interrelationship, there are some fundamental
differences’’ Discuss.

10 What is dividend payout ratio and operating ratio.

11 Briefly explain Master Budget ,Fixed Budget, Flexible Budget.

12What do you understand the term ‘Budget’ and ‘Budgetary Control’ ? What are the advantage of
Budgetary Control’.

13How different types of budget help firm in decision making ?

14Write a short note on Sales Variance and how it differ from cost variance.

15Write short note on Disposal of Variance.

16Profit -Volume Analysis is a technique of analysing the costs and profits at various levels of
Volume. Explain how such analysis help management.

17 What is Break Even Analysis?(graphically and mathematically )

18 ‘’Cost Volume Profit ‘’ relationship provide the management with a simplified framework for an
organization which is thinking on number of its problems. Discuss.

19 Explain the meaning of ‘Relevant Costs’. What are the characteristics of such costs?

20 Explain or Define

a)Differential Costs b) Make or Buy c) shutdown and continue d) Exploring New Markets
20 Trend Analysis is tool to understand business performance .Explain

21 rite short note on common size and comparative analysis.

22how ERP (Enterprise Resource Planning) support in decision making?

22"Cost control is the ultimate goal of any busines". Comment and cost control ratio
.

Q . Standard Material cost for manufacturing 1,000 units of output is 400 kg of material at Rs. 2.50
per kg. When 2,000 units are produced it is found that actual cost is 825 per kg of material at Rs.
2.70 per kg.

From the following information calculate (i) Material Cost Variance (ii) Material Price Variance

(iii) Material Usage Variance. (iv) verification

Q .Prepare a Cash Budget for the months of June ,July, August , 2020 on the basis of the following
information:

Income and Expenditure Forecasts :

Months Sales Purchases Wages Overhead Administration Overhead Distribution

(Rs.) (Rs.)
(Rs.) (Rs.) (Rs.)
April 50,000 40,000 10,000 2,000 1,200
May 54,000 14,000 12,000 2,200 1,400,
June 60,000 52,000 14,000 2,200 1,600
July 68,000 50,000 16,000 2,400 1,400
Augest 72,000 64,000 18,000 2,600 1,200
Septmber 76,000 68,000 20,000 2,600 1,400

Additional Information:

1. Cash Balance on Ist June, 2020 was Rs. 1,32,600.

2. Advance Tax of Rs. 6,000 each is payable in April and June.
3. 50% of sales are on credit basis which are realised in the subsequent month.
4. Suppliers are paid in the month following the month of supply.
5. Dely in payment of wages and overhead is 30 days.
6. Company plan to purchase a machine for Rs. 90,000 for which it has to pay the consideration
in three equal instalments in the months of April,June and August.

Q.

Find
Capital, Liabilities, Net Profit, Gross Profit, Opening Stock, Sales, Current Assets

Q
Q. Find

a) P/V ratio

(b) Break-even sales with the help of P/V ratio.

(c) Sales required to earn a profit of Rs. 4,50,000

Fixed Expenses = Rs. 90,000

Variable Cost per unit:

Direct Material = Rs. 5

Direct Labour = Rs. 2

Direct Overheads = 100% of Direct Labour

Selling Price per unit = Rs. 12.

Q
From the following data, you are required to calculate break-even point and
net sales value at this point:

If sales are 10% and 25% above the break even volume, determine the net profits.

Q
 Calculate:

(i) The amount of fixed expenses.

(ii) The number of units to break-even.

(iii) The number of units to earn a profit of Rs. 40,000.

The selling price per unit can be assumed at Rs. 100.

The company sold in two successive periods 7,000 units and 9,000 units and has incurred a loss
of Rs. 10,000 and earned Rs. 10,000 as profit respectively

A company is making a loss of Rs. 40,000 and relevant information is as follows:

Sales Rs. 1,20,000; Variable Costs Rs. 60,000; Fixed costs Rs. 1,00,000.

Loss can be made good either by increasing the sales price or by increasing sales volume. What
are Break even sales if

(a) Present sales level is maintained and the selling price is increased.

(b) If present selling price is maintained and the sales volume is increased. What would be sales
if a profit of Rs. 1,00,000 is required ?

Q Shine Ltd. represent following Balance Sheet on 31st December. (15)

Liabilities 2020 2021 Assets 2020 2021

(Rs.) (Rs.) (Rs.) (Rs.)
Share Capital 70000 74000 Bank Balance 9000 7800
Bonds 12000 6000 Receivable 14900 17700
Accounts payable 10360 11840 Inventories 49200 42700
Provision for Land 20000 30000
Doubtful debts 700 800 Goodwill 10000 5000
Reserve & surplus 10040 10560

1,03,100 1,03,200 1,03,100 1,03,200

Following additional information has also been supplied to you:

i Dividend amounting to Rs. 3,500 were paid during the year 2020.

ii Land was purchased for Rs. 10,000.

iii Rs. 5,000 were written off on Goodwill during the year.

iv Bonds of Rs. 6,000 were paid during the course of the year.

you are required to prepare a Cash Flow Statement as per AS 3

Q
Q

Q The sales turnover and profit during two periods were follows:

period I Sales Rs. 40 Lakhs Profit Rs. 4 Lakhs

Period II Sales Rs. 60 Lakhs Profit Rs. 8 Lakhs

Calculate :

(i) P/V Ratio

(ii) Sales required to earn a profit of Rs. 6 Lakhs

(iii) Profit when sales are Rs. 16 Lakhs

Q
Q