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3-Accounting For Managerial Control-CR

The document discusses accounting for managerial control and includes sections on very short answer questions, short answer questions, and long answer questions. It covers topics like budgeting, variance analysis, responsibility accounting, and cash flow statements. Students are asked to prepare summaries, analyze financial statements, and calculate variances as part of an exam.

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TAI LONG
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102 views4 pages

3-Accounting For Managerial Control-CR

The document discusses accounting for managerial control and includes sections on very short answer questions, short answer questions, and long answer questions. It covers topics like budgeting, variance analysis, responsibility accounting, and cash flow statements. Students are asked to prepare summaries, analyze financial statements, and calculate variances as part of an exam.

Uploaded by

TAI LONG
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Accounting for Managerial Control

Course Code: COM18202CR Max. Marks- 80

M.Com: 2st Semester Min. Marks-

Time allowed: 3 hours

Section A and Section B are Compulsory and attempt only two questions from
section C

Section “A”

Very Short Answer type questions (8 x 2 = 16)

Q 1. (i) Examine the impact of the fallowing transactions on the flow of funds:

a. Redemption of Pref.shares at a premium.

b. Cash Collected from debtors

c. Redemption of debentures Worth Rs.2, 00,000.

d. Raw material Purchased Rs. 60,000 from ZBC.Co.

(ii) What do you mean by Cash flow from operating activities?

(iii) Distinguish between budget and forecast.

(iv) Write a note on performance budgeting.

(v) What do you understand by divisional performance? Explain in brief.

(vi) What is ROI? What are the problems involved in ROI analysis?

(vii) What are the basic principles which are common to both standard costing and
budgetary control?

(viii) Define and explain briefly the fallowing terms.

(a) Material price variance

(b) Material usage variance

(c) Material Mix variance

Section “B”

Short Answer Type questions (8 x 4 = 32)

Q2. From the following details available prepare a summarised Balance sheet of ABC ltd.
as at 31st December 2019.
Fixed Asset to Net worth .75:1

Current Ratio 5:2

Acid test ratio 3:2

Reserve included in Proprietor’s Fund 1:4

Current liabilities Rs 2,00,000

Cash and Bank Balances Rs.10,000

Fixed assets Rs.6,00,000

Q3. What is Zero-base budgeting? State how is zero based budget superior to traditional
budgeting?

Q4. What do you understand by transfer pricing. List the transfer pricing guidelines.

Q5. Enumerate the causes of material and labour cost variances.

Section “C”

Long answer Type questions (16 x2 = 32)

Q6. The Summarised Balance Sheet of XYZ, Ltd. as at 31-12-2018 and 2019 are given
below.

liabilities 2018 2019 Assets 2018 2019

Share capital 4,50,000 4,50,000 Fixed assets 4,00,000 3,20,000

General reserve 3,00,000 3,10,000 Investment 50,000 60,000

Profit and Loss A/c 56,000 68,000 Stock 2,40,000 2,10,000

Creditors 1,68,000 1,34,000 Debtors 2,10,000 4,55,000

Provision for 75,000 10,000 bank 1,49,000 1,97,000


taxation

Mortgage loan
- 2,70,000

10,49,000 12,42,000 10,49,000 12,42,000

Additional Information:

1. Investment Costing Rs 8,000 were sold during the year 2019 for Rs.8, 500.

2. Provision for tax made during the year was Rs. 9,000.

3. During the year part of the fixed assets costing Rs. 10,000 was sold for Rs.12,000
and the profit was included in the profit and loss account ; and
4. \Dividend paid during the year amounted to Rs.40,000

You are required to prepare a statement of Sources and application of funds.

Q7. A Company has prepared the fallowing schedule of sales, purchases and payments
of wages and overheads as shown in Table given below.

Particulars May June July August September

Sales 45,000 50,000 55,000 60,000 65,000

Purchases of 26,000 30,000 32,000 35,000 38,000


material.

12,000 12,000 12,200 12,500 13,000


Wages

6000 7,000 8,000 8,500 9,000


Overheads

Sales: - 20% of sales made each month are on cash basis and the balance on credit
basis. Of the credit sales, 40% are collected in the same month, 40% in the next month
and the balance 20 % in the third month.

Purchases: - material suppliers allow a credit period of 2 months. Hence, payment for
purchases made in January is required to be made in March.

Wages: - 75% of wages are payable in the same month and the balance in the next
month.

Overheads: - of the overheads, a sum of Rs. 1000 represents depreciation. Out of the
balance, 50% is payable in the same month and the balance in the next month.

Cash and bank: the opening balance as on 1 July 2011 is expected to be Rs.8, 000.

Other items.

1. The Company has to pay a sum of Rs. 3,000 towards insurance charges in July
2011.
2. Dividends from investments of Rs. 12,000 will be received in August 2011.
3. A new machine will be erected in August 2011. An advance of Rs. 10,000 is to be
paid in July 2011. The First half – yearly instalment of Rs. 25,000 is due for
payment in August 2011.
4. The sale of Old machinery will fetch Rs. 20,000 in July 2011.

Prepare the cash budget for July, August, and September 20111.

Q8. Identify the types of responsibility Centres used in responsibility accounting and
Discuss how the performance of each responsibility centre type might be measured.
Q9. A gang of workers normally consisted of 30 men, 15 women and 10 boys. They are
paid at standard rates as under.

Man = Rs 0.80, woman = Rs 0.60 and boy = Rs 0.40

In a normal working week of 40 hours, the gang is expected to produce 2,000 units of
output. During the week ended 31st December, the gang consisted of 40 men, 10 woman
and 5 boys. The actual wages paid were at Rs. 0.70; Rs 0.65; and Rs 30 respectively. 4
hours were lost due to abnormal idle time and 1,600 units were produced.

Calculate labour Variances.

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