R4U2/11N15

Reg. No

St. Joseph’s College of Arts & Science (Autonomous) St. Joseph’s College Road, Cuddalore – 607001

ACMCA402 – COST AND MANAGEMENT ACCOUNTING Time: 3 hrs

Max Marks: 75 SECTION- A (10x2=20) Answer ALL the questions

1. State the objectives of Cost accounting. 2. List out the elements of Cost. 3. What is Trend analysis? 4. Define Management accounting. 5. Write a note on capital employed. 6. What is capital gearing ratio? 7. Define Break Even Point. 8. What is P/V Ratio? 9. Give various methods of capital budgeting. 10. What do you meant by capital rationing? SECTION- B (5x5=25) Answer any FIVE questions 11. Prepare a cost sheet. Raw materials consumed

Rs. 91,000

Wages

Rs. 29,000

Direct expenses

Rs. 11,000

Factory overheads 80% of direct wages Office overheads 10% of works cost Selling and Distribution overheads at 10% on works cost and Sales Rs. 2,37,025 12. What are the techniques of Financial statement analysis? 13. Explain the various classifications of ratios. 1

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14. The following is the balance sheet of Bharath Ltd. for the year ending 31st December, 2013. Liabilities 9% Preference Share Capital Equity Share Capital 8% Debentures Bills Payable Sundry Creditors Bank Overdraft Outstanding Expenses

Rs. 5,00,000 10,00,000 2,00,000 60,000 70,000 30,000 5,000

Assets Land and Building Plant and Machinery Furniture and Fittings Bills Receivables Sundry Debtors Bank Balance Short-term Investments Prepaid Expenses Stock

Rs. 6,50,000 8,00,000 1,50,000 70,000 90,000 45,000 25,000 5,000 30,000 18,65,000

18,65,000

From the Balance sheet Calculate (i) Current Ratio and (ii) Acid Test Ratio. 15. For each of the following projects compute (i) Pay-Back-Period (ii) Post-Back Profitability and (iii) Post-Back Profitability Index: Initial outlay

Rs. 50,000

Annual cash Inflow (after tax but before depreciation)

Rs. 10,000

Estimated life

8 Years

16. From the following information calculate the P/V Ratio, Break-Even Point and Margin of Safety: Total Sales

Rs. 3,60,000

Selling Price per unit

Rs. 100

Variable Cost per unit

Rs. 50

Fixed Cost

Rs. 1,00,000

17. From the following information calculate the Net present value of project A. Project A Initial Investment

Rs. 20,000

Estimated Life

5 Years

Scrap Value

Rs. 1,000

The profits before depreciation and after taxes (cash flows) are as follows: Year Project A

I 5,000

II 10,000

III 10,000

2

IV 3,000

V 2,000

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SECTION - C (3x10=30) Answer any THREE questions 18. The accounts of radio manufacturing company disclosed the following information for the year ending 31st December, 2013: Materials used

Rs. 50,000

Productive wages

Rs. 40,000

Works overhead expenses

Rs. 8,000

Office overhead expenses

Rs. 4,900

Prepare the cost sheet for the year ending 31st December, 2013 and also calculate the price which the company should quote for the manufacture of a radio in 2014, requiring materials valued at Rs.250 and wages Rs. 150, so that the price may yield a profit of 20% on the cost. 19. What are the different tools and techniques of Management accounting? Explain. 20. From the following information make out the balance sheet with as details as possible: Stock Velocity

- 6

Capital turnover Ratio

- 2

Fixed Assets Turnover

- 4

Gross Profit Turnover Ration

- 20%

Debtor’s velocity

- 2 Months

Creditors Velocity

- 73 Days

The gross profit was Rs. 60,000, Reserves and Surplus amounts to Rs. 20,000. Closing stock was Rs. 5,000 in excess of opening stock. 21. An analysis of Zee Ltd., cost records gives the following information: Particulars

Variable Cost Fixed Cost (% of Sales) Rs. Rs. Direct Material 32.8 Direct Labour 28.4 Factory Overhead 12.6 1,89,000 Distribution Overhead 4.1 58,400 General Administration Overhead 1.1 66,700 Budgeted sales for the next year Rs. 18,50,000. You are required to determine: (i) Break-Even Sales value (ii) Profit at the budgeted sales volume and (iii) Profit if the actual sales (a) drop by 10% (b) increase by 5% from the sale. 3

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22. Determine the average rate of return from the following data of TWO machines X and Y.

Particulars

Machine X

Original Cost Additional Investment in Net Working Capital Estimated Life in Years Estimate Salvage Value Average Income Tax Rate Annual Estimated Income after depreciation and tax: I Year II Year III Year IV Year V Year Depreciation has been charged on straight line basis. ****************

4

Machine Y

Rs. 56,125 5,000 5 3,000 55%

Rs. 56,125 6,000 5 3,000 55%

3,375 5,375 7,375 9,375 11,375 36,875

11,375 9,375 7,375 5,375 3,375 36,875