Question papers with solutions QP.
1
Code No.: 723AG
R15
Jawaharlal Nehru Technological University Hyderabad
MBA III-Semester Examinations
August - 2017
Strategic management accounting
Time: 3 Hours Max. Marks: 75
Note : This question paper contains two Parts A and B.
Part A is compulsory which carries 25 marks. Answer all questions in Part A.
Part B consists of 5 Units. Answer any one full question from each unit.
Each question carries 10 marks and may have a, b, c as sub questions.
PART-A (5 × 5 = 25 Marks)
1. Write brief note on each of the following: NotE: to gEt ComPlEtE SolutIoNS of thIS QP.
(a) Activity based costing [5] BuY SIA'S MBA (JNTU-HYD) III-SEM oNlINE @
(b) Inter process profits [5] www.universalbooks.com
(c) Limiting factor and its managerial use. [5]
(d) Managerial uses of break even theory. [5]
(e) Overhead variances. [5]
Part-B (5 × 10 = 50 Marks)
2. (a) Discuss the role of accounting information in planning and control.
(b) What do you understand by ‘Activity based costing’? [5+5]
OR
3. The following annual charges are incurred in respect of a machine in a shop where manual labour is almost Nil and
where work is done by means of fine machines of exactly similar type of specification
(Amount in `)
Rent and Rates (Proportional to floor space occupied) for the shop 48,000
Depreciation on each machine 6,000
Repairs and maintenance of 5 machines 12,000
Power consumed (@ ` 0.50 per unit) for shop 30,000
Electric Charges for light in the shop 5,100
Wages paid to Two Persons attending 5 machines @ ` 600 person per 14,400
month
Salary paid to supervisor for overseeing 5 machines @ ` 2,500 per 30,000
month
Sundry supplies such as Lubricants Jute Cotton waste etc for the shop 4,500
If each machine consumes 10 units of power per hour, calculate the machine hour rate per machine for the year. [10]
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QP.2 strategic management accounting
4. The information given below has been taken from the cost records of a factory, in respect of Job No 786.
01 Direct Material ` 4010
02 Wage Details
Department A 60 Hours @ ` 3 per Hour
Department B 40 Hours @ ` 2 per Hour
Department C 20 Hours @ ` 5 per Hour
03 Variable over heads
Department A ` 5,000 for 5,000 Hours
Department B ` 3,000 for 1,500 Hours
Department C ` 2,000 for 500 Hours
04 Fixed expenses estimated for ` 20,000
10,000 Hours
05 Expected Profit 25% on the selling price
Calculate the Cost and Price of the Job. [10]
OR
5. The product passes through three processes. The output of each process is treated as the raw material of the next
process to which it is transferred. The output of the third process is transferred to finished goods.
(Amount in `)
1 Process
st
2 Process
nd
3rd Process
Materials used 40,000 20,000 10,000
Labour 6,000 4,000 1,000
Manufacturing Overheads 10,000 10,000 15,000
10,000 units have been issued to the 1st process, and after processing, the output of each process is as under.
Process Output (In Units) Normal loss (%)
1st Process 9,750 2
2 Process
nd
9,400 5
3 Process
rd
8,000 10
No stock of materials or of work in progress was left at the end. Calculate the cost of the finished goods. [10]
6. A company makes and sells single product, and has budgeted the following figures for one year period
Sales (Units 1,60,000) ` 64,00,000
Fixed Production costs ` 8,00,000
Variable Production Costs ` 25,60,000
Fixed Selling, Distribution and Administration costs ` 12,00,000
Variable Selling, Distribution and Administration costs ` 12,80,000
Net Profit ` 5,60,000
Fixed costs are assumed to be incurred evenly throughout the year. At the beginning of the year there were no
stocks of finished goods. In the first quarter of the year 55,000 units are produced and 40,000 units are sold.
Prepare the profit statement for the first quarter end using the Marginal Costing method. [10]
OR
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Question papers with solutions QP.3
7. Discuss the utility of marginal costing in cost control and profit planning, with suitable examples. [10]
8. Little Angel’s Toys Factory has a plant capacity to provide 19,800 hours of machine use. The plant can produce
Alpha type toys or Beta type toys or a mixture of both of them.
The following is the other relevant information
Particulars Alpha Type Toys Beta Type Toys
Selling Price (`) 50 75
Variable Cost (`) 40 60
Hours required to produce 3 4
The market condition are such that not more than 4,000 units of Alpha type tools and 3,000 units of Beta type
tools can be sold in a year. Annual fixed costs are ` 50,000.
You are required to compute:
(a) The product mix that will maximize the net income to the company
(b) The maximum net income. [10]
OR
9. A firm manufactures a product, whose selling price is ` 10 per unit. The firm has a capacity to produce 10,000 units.
The variable costs are ` 2.50 per unit. The Fixed costs for various capacity utilization levels are as follows.
Capacity Utilization level Fixed Costs (In `)
Up to 50% ` 30,000
Above 50%, but less than 80% ` 36,000
80% and above ` 42,000
You are required to Calculate:
(a) The break even sales
(b) Operating profits of the firm at capacity utilization levels of 70% and 90%
(c) The level of activity at which the firm can make an operating profit of ` 18,000. [10]
10. What are the objectives of preparing a budget? Discuss how manufacturing organizations formulate different budgets.
[10]
OR
11. The standard material required to manufacture one unit of product X is 10 kgs. The standard price per Kg of material
is ` 25. The cost accounts records, however reveal that 11,500 Kgs of materials costing ` 2,76,000 were used for
manufacturing 1,000 units of product X. Calculate material variances. [10]
NotE: to gEt ComPlEtE SolutIoNS of thIS QP.
BuY SIA'S MBA (JNTU-HYD) III-SEM oNlINE @
www.universalbooks.com
SIA PUBLISHERS and DISTRIBUTORS PVT. LTD.
