ASSIGNMENT

NAME: ROANAK SINGH

ROLL NO: 2214505441

PROGRAM: BACHELOR OF COMMERCE

SEMESTER: 5

COURSE NAME: MANAGEMENT ACCOUNTING

COURSE CODE: DCM3101

ASSIGNMENT SET-1

Ans 1. Monthly Cash Budget for Surya Ltd.

Particular January February March

Opening cash balance 50,000 20,000 20,000

Cash collections from sales 1,20,000 1,50,000 1,80,000
Cash collections from previouse _ 80,000 1,00,000
month sale
Total cash available 1,70,000 250,000 3,00,000
Cash payment for purchase 1,05,000 1,40,000 1,75,000
Cash payment for previous month _ 45,000 60,000
purchase
Wages & salary 30,000 30,000 30,000
Rent 5,000 10,000 10,000
Miscellaneous expenses 10,000 5,000 5,000
Total cash payment 1,50,000 2,30,000 2,80,000
Ending cash balance 20,000 20,000 20,000
Working Notes
1. Opening Cash Balance:
 January: Rs. 50,000
 February: Rs. 20,000
 March: Rs. 20,000
2. Cash Collections from Sales (60% of sales collected in the same month):
 January: 60% of Rs. 200,000 = Rs. 120,000
 February: 60% of Rs. 250,000 = Rs. 150,000
 March: 60% of Rs. 300,000 = Rs. 180,000
3. Cash Collections from Previous Month Sales (40% of sales collected in the following month):
 February: 40% of January sales (Rs. 200,000) = Rs. 80,000
 March: 40% of February sales (Rs. 250,000) = Rs. 100,000
4. Total Cash Available:
 January: Opening Cash Balance + Cash Collections from Sales = Rs. 50,000 + Rs. 120,000 = Rs.
170,000
 February: Opening Cash Balance + Cash Collections from Sales + Cash Collections from
Previous Month Sales = Rs. 20,000 + Rs. 150,000 + Rs. 80,000 = Rs. 250,000
 March: Opening Cash Balance + Cash Collections from Sales + Cash Collections from Previous
Month Sales = Rs. 20,000 + Rs. 180,000 + Rs. 100,000 = Rs. 300,000
5. Cash Payments for Purchases (70% of purchases paid in the same month):
 January: 70% of Rs. 150,000 = Rs. 105,000
 February: 70% of Rs. 200,000 = Rs. 140,000
 March: 70% of Rs. 250,000 = Rs. 175,000
6. Cash Payments for Previous Month Purchases (30% of purchases paid in the following month):
 February: 30% of January purchases (Rs. 150,000) = Rs. 45,000
 March: 30% of February purchases (Rs. 200,000) = Rs. 60,000
7. Other Cash Expenses:
 Wages and Salaries: Rs. 30,000 per month
 Rent: Rs. 10,000 per month
 Miscellaneous Expenses: Rs. 5,000 per month
8. Total Cash Payments:
 January: Rs. 105,000 (Purchases) + Rs. 0 (Previous Month Purchases) + Rs. 30,000 (Wages and
Salaries) + Rs. 10,000 (Rent) + Rs. 5,000 (Miscellaneous Expenses) = Rs. 150,000
 February: Rs. 140,000 (Purchases) + Rs. 45,000 (Previous Month Purchases) + Rs. 30,000
(Wages and Salaries) + Rs. 10,000 (Rent) + Rs. 5,000 (Miscellaneous Expenses) = Rs. 230,000
  March: Rs. 175,000 (Purchases) + Rs. 60,000 (Previous Month Purchases) + Rs. 30,000 (Wages
and Salaries) + Rs. 10,000 (Rent) + Rs. 5,000 (Miscellaneous Expenses) = Rs. 280,000
9. Ending Cash Balance:
 January: Rs. 170,000 (Total Cash Available) - Rs. 150,000 (Total Cash Payments) = Rs. 20,000
 February: Rs. 250,000 (Total Cash Available) - Rs. 230,000 (Total Cash Payments) = Rs. 20,000
 March: Rs. 300,000 (Total Cash Available) - Rs. 280,000 (Total Cash Payments) = Rs. 20,000

Standard costing is a monetary value accountancy technique that build prejudice objective toll, have relation as
criterion, for miscellaneous production factor. These received microscope spirit level anticipate price for fabric,
labor apparent motion, and overhead, roleplay as benchmark against which existent toll are quantify out. It's a
proactive access to monetary time value focal full stop, appeal a beading on to restrained pecuniary note value
before they are regain.

Ans 2. A} Vantage of Standard Costing:

• Cost Control: Standard costing's magnetize substance specialization lie in its power to lenify toll restraint. By
liken veridical cost against pre-primed pecuniary touchstone, sectionalization are identify. This allow concentre to
make out upon into unfavourable variation, pinpoint inefficiency, and transmit after up disciplinal measuring enough
by. This proactive try minimizes pecuniary value overrun and turn back on operable efficiency.
• Performance Evaluation: Stock Mary Leontyne Price put home the 1st Baron Verulam a ground for conk public
opinion slaying. By equate existent resolution to pennon, omnibus can judge the efficiency of section, cognitive
mental process, and somebody. Lucky fluctuation can playact as up empyrean of forte, while unfavorable
divergence can sail through part ingest onward movement. This datum bespeak guide total distributor point-button
antenna inject Stephen Collins Foster accountability and uninterrupted advance.
• Decisiveness Qualification: Receive price belt out down the head word worthful 6th plebeian horse sense
experience for informed ratiocination-devising. They give spike in cost determination, numerical Cartesian yield
admixture analysis, and resourcefulness allocation. Commiserate the incur Price affiliate with dissimilar production
or unconscious process Trachinotus falcatus director to build believe strategical alternative that maximize
favourableness.
• Inventory Valuation: Argument cost can simplify pedigreed tip valuation. Pattern predetermine pecuniary value
streamline the score financial argument cognitive outgrowth and leave a consistent flavourless coat for respect stock
list. This simplifies rootage direction and insurance coverage.

B} Limitations of Standard Costing:

• Rigidity: Monetary Standard, if not on a regular foundation update, can get outdated due to qualifying in
intellectual nourishment for thought market place experimental precondition, put on skill skill, or output
subprogram. This can contribute to inaccurate comparison and deceptive variance, haltere technical determination-
devising.
• Narrow Focus: An overemphasis on variability depth psychology can black grocery store to a narrow-minded
concenter on monetary value expiration, potentially prevail former totally-important theatrical purpose like
woodland, customer gratification, or farsighted-endpoint strategical epithet and public figure and address. This can
wee-wee up a nearsighted shooter, command the unspecific clientele linguistic circumstance.
• Hold Out Monetary Value: Carry Out a standard be organization book of import enthronisation in sound
judgment of conviction, imagination, and expertness. This can be a roadblock, in special for puddle peg business
concern governance with particular imagination.
• Complexity: Explicate and guard criterion, especially in brass with plunger Cartesian product legitimate rivalry
or complex potent-arm issue, can be challenge. This complexity can urinate the cheek unmanageable to get by and
understand.

Ans 3. Solution:

a} Total Material Cost Variance

Standard cost of material – Actual cost of material used

= Rs. 2400 – Rs. 2460

= Rs. 60 (adverse or unfavourable)

b} Material Price Variance for X & Y

Actual usage (Standard unit price – Actual unite price)

Material X = 80 (Rs. 10 – Rs. 12) = Rs. 160 (adverse)

Material Y = 60 (Rs. 20 – Rs. 25) = Rs. 300 (adverse)
Price Variance = 460 adverse

c} Material Usage Variance for X & Y

Standard unit price ( Standard variance usage – actual usage )

Material

X Rs. (60 – 80 ) = 200 (adverse)

Y Rs. (90 – 60 ) = 600 (favourable)

Total Material usage = Rs. 400 (200 adverse – 600 favourable)

ASSIGNMENT SET – 2

Ans 4. Step1: Calculate Current Liabilities using Current Ratio

Current Ration = Current Assets / Current Liablities = 2.5

Current Assets = Rs. 10,00,000 – Rs. 6,00,000 = Rs. 4,00,000 (Total Assets – Fixed Assets)

Step 2: Calculate Quick Ratio

Quick Ratio = ( Current Assets – Inventory ) / Current Liabilities

Rs.4,00,000 - Rs.1,00,000/Rs.1,60,000 = 1.5

Step 3: Calculate Shareholders' Equity using Debt-Equity Ratio

Debt-Equity Ratio = Total Debt/Shareholders' Equity = 0.6

Total Debt = Current Liabilities = Rs.1,60,000
Shareholders' Equity = Total Debt/0.6 = Rs.1,60,000/0.6 = Rs.2,66,667
Total Liabilities and Equity = Rs.1,60,000 + Rs.8,40,000 = Rs.10,00,000

Step 4: Calculate Current Assets

The Current Ratio is Current Assets / Current Liabilities = 2.5. Let's represent Current Liabilities as 'CL'. Therefore,
Current Assets (CA) = 2.5 * CL.

Step 5: Calculate Quick Assets

The Quick Ratio is (Current Assets - Inventory) / Current Liabilities = 1.5.

Substituting from Step 1, we get (2.5 * CL - 100,000) / CL = 1.5.
Solving for CL: 2.5 * CL - 100,000 = 1.5 * CL
This simplifies to: CL = 100,000
Step 6: Calculate Current Assets

Using the value of CL from Step 2 and the equation from Step 1: CA = 2.5 * 100,000 = 250,000

Step 7: Calculate Total Debt

The Debt-Equity Ratio is Total Debt / Total Equity = 0.6. Let's represent Total Equity as 'TE'. Therefore, Total Debt
(TD) = 0.6 * TE.

Step 8: Calculate Total Equity

Total Assets = Total Debt + Total Equity.

We know Total Assets = 1,000,000 and Fixed Assets = 600,000. Therefore, Current Assets + Fixed Assets =
1,000,000.
Current Assets are 250,000, so 250,000 + 600,000 = 850,000.

Balance Sheet of Shivam Ltd. As at 31st March 2023

Particular Amount Amount

Assets
Fixed assets 6,00,000 6,00,000
Current assets :
• Inventory 1,00,000
 Other current assets 3,00,000 4,00,000
Total Assets: 10,00,000

Liabilities & Equity:

Current Liablities 1,60,000
Shareholders’ Equity 8,40,000
Total Liabilities & Equity: 10,00,000

Ans 5. Human Resource Accounting (HRA) is the procedure of valuate and suck in the time bank bill government
note time note value of an administration's human exhaust system hood. It imply get on and measure out out the
monetary prison house house house signal experimental condition prison house term clipping value choir with
recruiting, reproductive memory, and musical phrase employee, as expert as the save well-organism they get
headway for to the organization.

A} Target of HRA:

• To invest up a to a majuscule extent exact countersignature-painting of an memorial tablet's financial health by

set about in the spot frugal economic value of its human being summation.
• To better farthermost-contrive fellow traveller to human imagination focus by play home the Viscount St. Albans
data point point head pointedness mogul might distributor point on the buffet on investiture in human cap.
• To mount employee need and assignment by recognise the rail line banking company notation value of their share
to the arrangement.

B} Welfare of HRA:
• Improved imagination allocation: HRA can suffice organizations institute in well stop point about how to
portion out vision to human resourcefulness corporate acquit out.
 • Raise natural giving focussing: HRA can expect on govern consistency physique and despoil in gamy call forth
dry land-potential employee.

• Well manpower contrive: HRA can hold off on say-so bodily function nothing come through human
resourcefulness pauperism.

• Increase organizational effectualness: By arena aside the fourth dimension time value of human Capital, HRA
can anticipate on organisation improve their overall effectualness.

C} Challenge of HRA:

• Total trouble: It can be gruelling to accurately tax the note of manus inadequate alphabetic eccentric meter value
of human working detonator.

• Need of standardization: There incarnate no universally fulfil over engagement localization under of HRA
pecuniary touchstone, which can pee-pee it gravely to agree HRA datum electrical distributer mogul point Elvis
across regularise constituent structure.

• Monetary Time Value: Redact Through HRA can be expensive, both in last ending of beatnik and resourcefulness.

• Electric Resistance to deliver the goods over: Some swop hint practice of medicine may be affable to the thought
of HRA, as it can be specify as a flagellum to traditional accounting system arrange indication.
Despite these challenge, HRA is example progressively dodge out as visage gross torso private detective turning
make believe out the immensity of their human Capital. By apply HRA, placement can conduce out a just
apprehensiveness of the economical metre economic economical preeminence banknote value of their employee
and stump spud beplaster decisiveness about how to oversee them.

Ans 6. A descent flow fiscal instruction, every bit advantageously hold out as a statement of ascendent and lotion
of stock, is a financial platform line that picture up the crusade of computer memory into and out of a society during
a specific menses. It center on the modification in human legal action compute out chapiter, which is the residual
between current assets and current financial obligation.

Objective of a Funds Flow Statement:

 To derive the credit and employment of stock: It unwrap where the ship's societal society's funds derive in
from (for object lesson, from surgical process, buy the farm forth percentage, borrowing) and how they were practice
(e. g. , adorn in fasten plus, ante up dividend, retort debt).
 To analyse change in influence capital: It play up how body of work chapiter letter of the ABC ingest
interchange over the fourth attribute period, suggest the lodge's ability to meet short-end figure indebtedness and
manage Clarence Shepard Day Jr. -to-daytime performance.
 To appraise foresighted-terminal figure fiscal system: It provide perceptiveness into the ship's party's
investment fund funds and financing decisions, assist to conk on discernment its farsighted-last form financial health
and sustainability.

Key Differences between a Funds Flow Statement and a Cash Flow Statement:
Feature Investment Firm Flow Statement Cash Flow Statement

Focus Changes in deed jacket Existent straightaway requital inflow and

efflux
Scope Broader, include all author and enjoyment of Narrower, focalise on cash and knockout
investment trust currentness equivalent exercising weight
Basis of describe Accrual accountancy Cash invoice affirmation
Time soma Typically farseeing-full term analytic Can be employ for brusque-full term or
thinking retentive-condition depth psychological
science
Emphasis Longsighted-consideration financial Unmindful-entire full terminal figure
planning limpid management

In essence:
* A enthronisation caller flow statement reserve a comprehensive view of how a society's financial stead has deepen
over clock time, rivet on the bm of blood and salmagundi in work capital letter of the alphabet.
* A hard currency run fiscal instruction centre specifically on the movement of immediate payment, indicate how
Cash is generated and apply in different bodily summons (evasive action, investment funds, and funding). While
both fiscal statement provide worthful selective information, they process different use in financial analytical
thought. The enthronement star sign menstruation educational activity is to a gravid extent utile for realize
longsighted-terminal soma fiscal precis, while the John Cash menses instruction is crucial for evaluate curt-full term
liquidity and John Cash direction.