Q. P.
Code: 39726
[Time: 2.30 Hours] [ Marks:75]
Please check whether you have got the right question paper.
N.B: 1. All questions are compulsory.
2. Each questions carries 15 marks.
3. Figures to the right indicate full marks.
4. Use simple calculator.
5. Working should form part of answer.
Q1 (A) Fill in the Blank (Any 8) Rewrite the sentence (8)
1. “__________________ Budget is a budget of income or expenditure appropriate to,
or the responsibility of, a particular function” (Master/Functional)
2. CIMA has defined a _______________ Factor as – “ the factor the extent of whose
influence must first be assessed in order to ensure that the functional budget are
reasonably capable of fulfilment”(key/variable)
3. ____________________ Cost is the amount by which total cost changes if the output
is changed by one unit.(Marginal/Standard)
4. An increase in the selling price per unit will ______________ P/V
Ratio.(increase/decrease)
5. Contribution is equal to profit plus ___________(Variable cost/Fixed cost)
6. Standard cost refers to ________(Pre- determined cost/sunk cost)
7. Labour rate variance is due to change in ____________(hours/rate)
8. The most profitable sales mix is one which gives maximum ___________________
(Contribution/Sales )
9. No past reference is considered while preparing __________(sales budget/zero base
budget)
10. Production Budget is expressed in _____________________.(quantity/amount &
quantity)
Q1 (B) State whether statements are True or False (Any 7) Re write the sentence (7)
1. Master Budget is a budget which is designed to remain unchanged irrespective of the level
of capacity.
2. Idle time variance is always favourable.
3. The basic difference between a fixed budget and a flexible budget is that a fixed budget is
a budget for a single level of activity, while a flexible budget consists of several budgets
based on different activity levels.
4. Sales budget provides the necessary input data for the Direct Labour Budget.
5. If a company increases fixed cost, then the breakeven point will be lower.
6. Cash budget includes estimated receipts and estimated payments.
7. In marginal costing the price can be fixed on the basis of only variable costs.
8. Standard Costing technique uses standards for cost and revenues for the purpose of control.
9. Margin of safety indicates profit.
10. A negative Sales variance is said to be favourable.
Q2(A). The turnover and profits during the two periods were as follows
Sales (Rs.) Profit (Rs.)
Period I 40 Lakhs 4 Lakhs
Period II 60 Lakhs 8 Lakhs
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Q. P. Code: 39726
Assuming that the cost structure and selling prices remain the same in the two periods,
calculate
1. Profit Volume Ratio
2. Break Even Point of sales
3. The sales required to earn profit of Rs. 10 Lakhs
4. Margin of Safety in Period II
5. Profit when sales are Rs. 50 Lakhs (15)
OR
Q2 (B). From the following particulars find the most profitable product mix and prepare a
statement of profitability of the product mix:
Product Product
A Product B C
Rs. Rs. Rs.
Units budgeted to be produced and sold 1800 3000 1200
Selling price per unit Rs. 60 55 50
Requirement per unit:
Direct Material 5 kg 3 kg 4kg
Direct Labour 4 hrs. 3 hrs. 2 hrs.
Variable Overhead 7 13 8
Fixed Overhead 10 10 10
Cost of Direct Material per kg Rs 4 4 4
Direct Labour per hour Rs 2 2 2
Maximum possible units of Sales 4000 5000 1500
All the three products are produced from the same direct material using the same type of
machines and labour. Direct labour, which is the key factor, is limited to 18,800 hours.
(15)
Q3(A) Shangrilla Foods Products Limited has prepared the following sales Budget for the
first five months of 2018.
Sales Budget (in Units)
January 10,800
February 15,600
March 12,200
April 10,400
May 9,800
The inventory of finished products at the end of every month is to be equal to 25% of
the sales estimate for the next month. On 1st January 2018, there were 2,700 units of
product on hand. There is no work-in-process at the end of any month.
Every unit of product requires two types of materials in the following quantities:
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Q. P. Code: 39726
Material A : 4 Kg. Material B : 5 Kg.
Material equal to one-half of the next month’s production are to be in hand at the end
of every month. This requirement was met on 1st January 2018.
Budgeted prices for the purchase of materials are
Material A : Rs.3 per kg., Material B : Rs.2 per Kg.
Prepare Purchase budget for first quarter of 2018 January to March
(Quantity and Value) (15)
OR
Q3(B) Excellent Manufacturers can produce 4000 units of a certain product at 100% capacity.
The following information is obtained from the books of account:
August-18 September 2018
Units Produced 2800 3600
Rs. Rs.
Repairs and Maintenance 500 560
Power 1800 2000
Shop Labour 700 900
Consumable Stores 1400 1800
Salaries 1000 1000
Depreciation 1400 1400
Production per hour is 10 units. Direct material cost per unit is Rs. 1 and Direct wages per
hour Rs. 4. You are required to:
Compute the cost of production at 100%, 80% and 60% capacity showing the variable, fixed
and semi-variable cost (15)
Q4 (A).The details are available from the records of Binny Ltd. Engaged in manufacturing article
‘S’ for the month of April, 2018. The standard data and actual data are as follows:
Standard Actual
(100 units) (1000 units)
Material Quantity Rate per kg Quantity Rate per kg
120 kg Rs. 10 1250 Rs. 9.5
Labour Hours Rate per Hour Hours Rate per hour
90 Rs. 15 875 Rs. 100
Calculate Material and Labour Variance. (15)
OR
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Q. P. Code: 39726
Q4 (B) In department ‘A’ of a plant the following data are submitted for the week ended 31st
March, 2018
Standard Output for 40 hours per week 1400 units
Budgeted Fixed Overheads Rs. 1400
Actual output 1200 units
Actual Hours worked 32 hours
Actual fixed Overheads Rs. 1500
You are required to prepare a statement of variances (15)
Q5. (A) State the steps in budgetary control system? (8)
(B) What are the benefits of Standard Costing? (7)
OR
Q5.Write short notes (Any 3) (15)
(a) Sales Variance
(b) Break even chart
(c) Absorption Costing Vs. Marginal Costing
(d) Limiting Factor
(e) Decision making in marginal costing
___________________________________
Page 4 of 4
Solution for TYB.Com ( Accounting & Finance ) Semester VI October 2018 QP Code 39726
Q.1A) Fill in the Blank : 1 Master 2. Key 3. Marginal 4. Increase 5.Fixed Cost 6. Pre determined
cost 7. Rate 8. Contribution 9. Zero base budget 10. Quantity
B) True 3,6, 7 ,8,9,10 False 1, 2 ,4, 5
Q.2 A) P/v Ratio 20% , BEP Rs 20 Lacs , Sales required to earn the profit of Rs 10 lacs is Rs 70 Lacs ,
MOS for second period Rs 40 Lacs , Profit when sales are Rs 50 Lacs is Rs 6 lacs ( 03 marks each )
Q.2 B )
Particulars Product A Product B Product C Marks
Ranking III II I One marks each
Optimum product Mix 200 5000 1500 Three Marks each
Contribution 5,000 1,20,000 33,000 One marks each
Q.3A)
Particulars January February March Marks
Production 12,000 14,750 11,750 01 each
Purchase Qty A 53,500 53,000 44,000 01 each
Purchase Qty B 66,875 66,250 55,000 01 each
Purchase Value A 1,60,500 1,59,000 1,32,000 01 each
Purchase Value B 1,33,750 1,32,500 1,10,000 01 each
Q.3 B)
Particulars 60% 80% 100% Marks
Total Variable 5,160 6,880 8,600 02marks each
Total Fixed Cost 2,400 2,400 2,400 01 marks each
Total Semi Variable Cost 2,170 2,430 2,690 02marks each
Q.4 A) MCV 12,000-11875= 125(F ) MPV = (10-9.5)X 1250 = 625(F) MUV = (1,200-1,250) X 10 = 500(A)
LCV = 13,500-8,750= 4,750(F) LRV = (15-10)X 875= 4,375 (F) LEV =( 900-875) X 15 = 375 (F )
(Marks 2.5 each )
Alternate solution where labour rate is taken as Rs 100 per hour
LCV = 13,500-87,500= 74,000( A) LRV = (15-100)X 875=74,375 (A) LEV =( 900-875) X 15 = 375(F)
Q.4 B) 1. Fixed overheads cost Variance = 1200-1500 = 300A 03 marks
2. Fixed overheads Expd Variance = 1400-1500 = 100A 03 Marks
3. Fixed overheads Volume variance = 1200-1400 = 200A 03 Marks
4.Fixed overheads capacity variance = (40-32) X 35 = 280A 03 marks
5.Fixed overheads efficiency variance = (1120-1200) X1 = 80 F 03 marks
CA Gurunathan Pillai 9869125803
CA Dr. Bharat Patel 9969730280
Dr. Audrin Colaco 9221715321
