INTERMEDIDecember
ATE EXAMI
2023
NATION P-I0(CMFM)
COST &
MANAGEMENT ACCOUNTING AND FINANCLAL M
TimeeAllowed: 3 Hours
MANAGEMENT
Syllabus 2016
Full Marks: 100
The figures in the
margin on the
Allworkings must right side indicate full marks.
Whenever necessary, candidatesformmaypart of the answer:
and clearly state them in make appropriate assumptions
the respective
This Paper has been divided Answer.
intotwo parts A &B, each carrying 50 Marks.
Further, each part has been divided into two
sections only.
Part-A
Cost &Management
Accounting
SECTION -I 50 Marks
Answer the following questions.
1, (a) Choose the answer from the given four alternatives. You may write only the
Roman Numeral and Alphabet chosen for your answer: lx6=6
(i) Which one of the following Accountings helps the organization in proper delegation
of authority for the attainment of the Vision and Mission of the business?
(A) Financial Accounting
s (B) COSt Accountingsle
(C) Management Accountingnoeieboo
(D) Green Accounting
(ii) The Profit / Volume Ratio of ROXY Lid. is 50%, while margin of Safety is 40%.
If sales volume of the Company is 50 Lakh, the Net Profit willbe
(A) R10 Lakh
(B) 12 Lakh
(C) ? 15 Lakh
(D) 20 Lakh
(ii) Ina factory of BAC Ltd. where standard costing is operated, the budgeted fixed
overhead per unit is 5. For the month of September 2023, the actual Fixed
Overhead incurred was 40000 for the production of 9000 units resulting in a fixed
overhead volume variance of ? 5000 (Adv.). The budgeted production will be
(A) 12000 units
(B) 10000 units
(C) 9000 units
(D) 8000 units
29249 Please Turn Over
P-10(CMFM) (2)
Syllabus 2016
(iv) An employee of RON Ltd., took 100 minutes to produce first unit of a
produc
The operation of the Company has an 90% learning curve. How much should t-
second unit time?
(A) 200minutes
(B) 100 minutes
(C) 8 minutes
D) 80 minutes
(v) Transfer Prices are normally set for
(A) Intermediate products
(B) Finished products
(C) Giffen products
(D) None of the above
(vi) ZBB is more suitably applicable to
(A) Manufacturing Activities
(B) Historical Cost Activities
(C) Service or Support Type Activities
(D) Discretionary Cost Area
(b) Match the Statement under Column Iwith the most appropriate statement und
Column II : (You may opt to write only the Roman numeral and the matched Alphab
instead of copying the contents into the answer books): 1x4=
Column I Column II
(i)Angle of Incidence (A) Arises due to change in the
proportion of the number
of skilled workers. 111
(ii) Performance Budget (B) Supply of raw material or
power which can affect
production.
(iii) Gang Variance (C) Indicator of profit earning
capacity of the firm over
breakeven sales.
(iv) Boston Consulting Group (D) Responsibility of Various
levels of Management is
predetermined in terms of
output.
(E) Experience curve
(F) Decision Making
(3) P-10(CMFM)
Syllabus 2016
Stote whether the following statements are True or False: (You may write only
statement into the
the Roman Numeral and whether True or False without copying the
lx4=4
answer books):
under absorption and
i) When there is not opening or closing stock the profit /loss
marginal costing willbe equal.
fluctuations are not taken into
i) Transfer pricing can always based on market price
account. T
Budget Manual is a document which only contain instruction regarding how
(i) A
budgeted expenditure.
bog actual expenditures willbe compared with
Contribution can be increased by either increasing the selling price per unit orby
(iv) T
decreasing the variable cost per unit or doing both.
12x3=36
SECTION - II
2, 3, 4, and 5.
Answer any three questions from question nos,
is described by the equation
2. (a) The Cost Volume Profit relationship of AVOM Ltd., Y is the Total Cost
Y=240000 + 0.6 x, in which x represents Sales revenue and
(FC + VC) at the Sales revenue / Volume represented by X.
Required :
(i) Identify the P/V Ratio
(ii) What Sales volume must be obtained to Break-even for the Company?
(iii) Analyze Sales volume to be required to produce an income of 100000
2+2+2=6
(b) FOVA Ltd., a manufacturing company sells 24,000 flower vases every year. The
detail of costfor year ended 31 st March 2022 is given below:
Selling price per flower vase 800
Variable Cost per flower vase = 7600
Fixed Cost : Staff salaries : 72400000
General Office Cost: 800000 bninpa
Advertising Cost : 800000
Required :
) Assess the Break-Even Point and margin of safety in no of units of sales.
() The company has gained reputation and in the year 2023 no advertising cost
will have to incurred if the company so decides. The selling price will remain
unaltered. The variable costs will have to increase by 10% to make the flower
vases more attractive. Considering the new BEP and the new margin of safety.
Justify it would be prudent to cut the advertising cost. 3+3=6
P-10(CMFM)
Syllabus 2016 (4)
3. (a)
ZNB Ltd., operates of standard costing throughout its division. The compan
produces an alloy byasystem
mixing and processingtwo materials Aand B.
For making 10 kgs. of Alloy, the
standard requirement are :
Material Quantity (KG) Rate per kg )
A 8 6
B 4 4
During the month of September 2023 1000 Kgs of Finished
i The actual Consumption of
Alloy were produced.
Materials is as under:
Material Quantity (KG) Rate per kg )
A 750 7
B 500 5
Required:
Analyze the following Material Variances :
(i) Material Cost Variance (MCV)
(ii) Material Price Variance (MPV)
(iüi) Material Usage Variance (MUV)
5
(b) TEXOLtd., a
manufacturing unit using the standard costing and budgetary Control
system has furnished the following information for the month of
November 2023.
Particulars Budget Actual
Output (Units) 30000 32500
Hours 30000
Fixed Overhead
33000
45000 750000
Working days 25 26
Required:
Analyze the following fixed Overhead Variances :
(i) Fixed Overhead Cost Variance
(ii) Fixed Overhead Expenditure Variance
(iii) Fixed Overhead Volume Variance
(iv) Fixed Overhead Efficiency Variance
(v) Fixed Overhead Capacity Variance
(vi) Fixed Overhead Calendar Variance
7
(5) P-10(CMFM)
Syllabus 2016
4. (a) BOB Ltd., an Electronics Company has just Completed the manufacture of 20 units of
a Fire Alarm Equipment. The manufacturing Costs are as follows :
40000
Direct Materials
Direct Labour 400 hours @ 30 per hour 12000
Variable overheads @Rs 15 per hour 6000
Special tools (Re-usable) 6000
12000
Fixed overhead apportioned
TOTAL 76000
company received another
The Company uses a mark up to 25% on Total Costs. Thecompany has been asked to
order for 60 units of Fire alarm equiments for which the
thought to be pertinent
quote a price for fulfillthis order. The 90% learning curve is
in this case.
Required :
alarm equipment.
(i) Identify the selling price per unit of First order for 20 units of Fire
order for 60 units of Fire
(i) Assess the minimum quoted price per unit of Second 6
alarm equipment.
requires three minor
(b) BOTON Ltd., is manufactures electronic switches. Each switch
budget for the
circuits that cost 2.00 each. The company has prepared a production follows :
electronic switches by quarters for Year 2 and the first quarter of Year 3, as
Years 2 Years 3
First Second Third Fourth First
Budgeted Productions 60000 90000 150000 100000 80000
The inventory of thecircuits at the end of a quarter must be equal to 20% of the following
quarter's produetion needs. There will be 36000 minor circuits on hand to start the first
quarter of year two.
Required :
Prepare direct materials budget for the minor circuits, for each quarter for years 2. 6
4x3=12
5. Writeshort notes on any three out of the following four questions :
(a) Enumerate the Significance of Management Accounting.
(b) Summarize the limitation of Inter- firm comparison.
(c) Append the objectives of Inter Company Transfer Pricing.
(d) Enumerate the main Concepts of Performance Budgeting.
P-10(CMFM)
Syllabus 2016
(6)
o ttou Part -B
Financial Management
SECTION - II 50 Mark
Answer the followingquestions.
four alternatives. (You may write on
O. (a) Choose the correct answer from the given lx6=
the Roman Numeral and Alphabet chosen for you answer) :
() Clientele effect associated with which of the following ?
(A) Gordon Model
(B) Residual Model
(C) Graham & Dodd Model
(D) Modigliani and Miller Model
(ii) The relationship between the seller of the goods and financial firm is best explainec
by which of the following ?
(A) Lease
(B) Factoring
(C) Forfeiting
dt
olloleD) Hire Purchase System
(iii) The current Assets of BOT Ltd. is 400000, while Quick Ratio is 1.80: 1. If the
current liabilities are 200000 what will be value be value of Stock ?
(A) 60000
(B) 50000 180 = s000Oo-5up
(e40000
2000 oo
(D) None of the above
96000O 4a0 000-S
(iv) BONI Ltd., has paid dividend of 3 per share of R 10 each last year and it is
expected to grow @ 10% next year. If the market price of share is 60 the Cost
of equity willbe
(A) 16.50 %
B) 15.50 %
(C) 12.50 %
(D) 12.00 %
(7)
P-10(CMFM)
Syllabus 2016
(v) The Present value of Total cash inflows of aProject for 5 years is 337050. If
?
the profitability Index is 1.05 what willbe the cost ofa project
(A) 353900
(B) 350000
(C) R321000
(D) 320000
comes under the following head
received from issue of shares
(vi) Cash
activities
(A) Cash flow from Operating
activities
(B) Cash flow from Investing
activities
(c Cash flow from Financial
(D) None of the above
Column Iwith the most appropriate statement under
(b) Match the Statement under Numeral and match alphabet instead of
to write only the
column II (You may Opt lx4=4
book) :
copying the contents into the answer
Column II
Column I
(i) Stock Splits (A) Market price of Securities
(ii) Sweat Equity Shares (B) Commercialize unproven technology
B(ii) Venture Capital (C) Intellectual property rights
Modigliani Miller Hypothesis (D) Regulate the price
of Shares)
(iv)
(E) Theory of Capital Structure iv)
(F) Optimal Cash Balance
False (Youmay write only the
(c) State whether the following statement are True or
statement into the
Roman Numeral and whether True or False without copying the
1x4=4
answer books):
position of the
() Liquidity Ratio of a 12company helps in determining the cash
company. T
returns from the
(i) Future expected profits from an investments are taken as
investment for capital budgeting. T
(iii) If the dividend per share remains constant and the market price of the share
declines, the Dividend Yield ratio will increase. T
(iv) Venture Capital is a form of equity financing for funding high risk and high reward
companies. T
P-10(CMFM) (8)
Syllabus 2016
SECTION - IV
and 10.
Answer any three questions from question numbers 7, 8,9
Each question carries 12 Marks.
1. (a) The following Financial Parameters are extracted from the records of VOTEX Ltd. fo
the year ended March 31, 2023
Working Capital 7300000
Fixed Assets to Net worth 0.75
Other Equity (Reserves &Surplus) F00000
Bank overdraft 60000
Trade Payables ?
Current Ratio 2.5
Quick Ratio 1.8
6 bas Required :
A) Assessthe amount of Trade payables.
(ii) Assess the value of Equity Share Capital.
(ii) The value of Fixed Assets would be how much?
iv) Analyze the value of Inventories of VOTEX Ltd. 2+2+1+1=6
(b) ADON Ltd. has furnished the following information for
Preparation of Cash Flow
Statement for the year ended March 31, 2023.
Net Profit In Lakhs)
orit 305
olnDividend (including interim dividend) paid
Provision for Income Tax 95
d 3o Incomne Tax paid during the year 75
Loss on sale of assets (net) 60
orll moBook value of assets sold
Depreciation charged to P&L Account 10
rda oZLoss on Sale of investments 250
Walue of investments sold 3
Tnterest paid during the year 306
tIncreasein working capital
(excluding cash and cash 145
equivalents) 505
(9) P-10(CMEM)
Syllabus 2016
( In Lakhs)
5Purchase of fixed assets s 18
NInvestment in joint venture 105
Opening cash and cash equivalents 12
Closing cash and cash equivalents 30
000 Required :
Analyze the Cash Flows from
(1) Operating Activities
(i) Investing Activities
(ii) Financial Activities as per AS-3 (Revised) 3+2+1=6
8. (a) A proforma cost sheet of BOSM Ltd., a manufacturing Company provide the following
particulars:
Particulars Amount per unit)
Raw materials cost 100.00
Direct labour cost 37.50
Buier Overheads cost 75.00
Total Cost 212.50
Profit 37.50
Selling price 250.00
Ahe Company keeps raw material in stock, on an average for one month; work-in
progress, on an average for one week; and finished goods in stock on an average for
two weeks.The credit allowed by suppliers is three weeks and company allows for six
weeks credit to its debtors. The lag in payment of wages is one week and lag in payment
of overhead expenses is two weeks.
The Company sells one-fifth of the output against cash and maintains cash-in-hand and
at bank put together at Rs. 37,500.
Required :
Prepare a statement showing estimate of working capital needs to finance an activity
level of 1,30,000 units of production. Assume that production is carried on evenly
nanthroughout the year, and wages and overheads accrue similarly. Work-in-progress
stock is 80% complete in all respects.
P-10(CMFM) (10)
Syllabus 2016
(b) The Balance Sheet of TUPN Ltd. as on March 31' 2023 is as follows :
Liabilities Amount ) Assets
Amount )
Equity Share Capital ( 10 each) 120000 NET Fixed Assets
300000
Other Equity 40000 Current Assets 100000
10% Long term Debt 160000
Current Liabilities 80000
400000 400000
The Company's total assets turnover ratio is 2. Its fixed operating costs are 200000
and the variable operating cost ratio 60 per cent. The Corporate Tax rate is 35 per cent.
Required:
() Analyze the Operating, Financial and Combined Leverages.
h (ii) Assess the likely level of EBIT, if EPS is 5. 6
9. (a) ENGON Ltd., is considering the purchase of a new computer system for its research
and development division, which would cost 35 lakh. The operation and maintenance
costs (excluding depredation) are expected to be 7 lakh per annum. It is estimated that
the useful life of the System would be 6 years, at the end of which the disposal value is
expected to be 1lakh.
The tangible benefits expected from the system in the form of reduction in design and
draftsmanship costs would be 12 lakh per annum. The disposal of used drawing and
drawing office equipment and furniture initially is anticipated to net 9 lakh.
As Capital expenditure in research and development, the proposal would attract a
100 per cent write-off for tax purposes. The gains arising from disposal of used assets
may be considered tax-free. The Corporate tax rate is 35%. The average cost of capital
of the company is 12 per cent. Ignore tax on Salvage value.
(Calculation should be made upto three decimal Points)
Given [PVIF (12%, 6 years) = 0.507 and PVIFA (12%, 6 years) = 4.111]
Required :
(i) Assess the Net Present Value (incremental) from the computer System.
(ii)) As a financial adviser, what would your recommendation to the Company in
respect of purchase of Computer System.
(11)
P-10(CMFM)
Syllabus 2016
Structure YAN Ltd., as on March 31'
of YAN
31' 2023 is as follows :
(b) The Capital in Crore)
15
each - fully paid up at par)
Equity Capital ( 10 100 each, fully paid up at par)
1
(
11% Preference Capital 20
Other Equity 10
100 each)
13.5 % Debentures (
12.50
15% Term Loans 58.50
3.60; the dividend per share is
shares per share is
dividend on equity is 40. Preference stock.
The expected 7%. The market price
per share
expected togrow at the rate of
selling at 75 per share. The income tax rate
currently
redeemable after ten years, is
for the company is 40%.
Required :
and Cost of Preference Capital.
(i) Identify the Cost of Equity Ltd. Using Book
Assess the Weighted Average Cost of Capital (WACC) of YAN 6
(i)
Value Proportions.
4x3=12
following Four questions :
10. Write short notes on any three out of the
a) Interpret the concept of Forfeiting.
6) Identify the consequences of inadequate working capital in an organization.
(c) Append the Significance of Capital Budgeting decision.
(d) Enumerate the assumptions of Baumol's Model.
